Messari believes USDC will become the dominant stablecoin on Ethereum while the Tether supplies on Ethereum are dwindling down as we can see more in our latest USDC news.
The Research shows that Messari believes USDC will grow as that the demand for USDC grew so much that it has consumed a huge chunk of the Tether market cap this year. Researcher Ryan Watkins predicted that in the upcomign weeks, we can see Tether’s share of the stablecoin supply on Ethereum drop below 50%. He added that over half of the total USDC supply sits in smart contracts which is equivalent to $12.5 billion and cited data from Messari, CoinMetrics which is more than 40% of the stablecoin supply on Ethereum is USDC.
Watkins stated that the Circle stablecoin became the preferred dollar-pegged coin staked in smart contracts and Defi protocols:
“Although this percentage is not as high as DAI, USDC leads by a wide margin in dollar terms and has become the preferred stablecoin in DeFi for now.”
The USDC supply surged by more than 1820% since the start of 20-21 when there was 1.3 billion circulating and now the supply of the stablecoin is at a record 25 billion as per Circle. According to the Tether transparency report, there are 62.7 billion USDT in circulation with an increase of 200% since the start of the year. 30.9 billion is now on the Ethereum network which is a figure that dropped with regulatory as the high network fees hampered the transactions. The researcher reported that Defi protocol MakerDao and Aave are the biggest consumers of USDC that hold about 23% of their total supply.
In coming weeks it is very likely USDT’s share of the stablecoin supply on Ethereum will fall below 50% for the first time.
USDC is quickly emerging as the dominant stablecoin on Ethereum in large part due to its growing role in DeFi.
— Ryan Watkins (@RyanWatkins_) June 29, 2021
He added that the trend is going to continue with the pending launch of Compound Treasury which is a new product offering 4% interest on USDC to the institutions and initiatives centered on the Circle Defi API which is a new platform to ease DEFI operations for businesses. Coinbase on the other hand announced that it will pay 4% interest on USDC holdings and will add even more momentum to the stablecoin.
USDC is the stablecoin native to four blockchains and could soon be on eight to 10 more networks as per the recent reports. This will be the broadest expansion of the $25 billion stablecoin to date and will surpass the eight blockchains that support Tether’s USDT as the market leader with a $63 billion market cap.
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