$10.5 billion? Interpretation of Q2 Stablecoin Market Data in One Article
Editor's Note: This article comes fromCrypto Valley Live (ID: cryptovalley)Editor's Note: This article comes from
Crypto Valley Live (ID: cryptovalley)
Crypto Valley Live (ID: cryptovalley)
, Author: Joel John, translation: Ling Jie, reproduced by Odaily with authorization.
While writing this article, I have the following considerations"decentralized"1. You will often see me provide two separate charts for Tether and other coins. This is because Tether is in a league of its own, and using a logarithmic graph may not fairly account for the leading contenders in the non-Tether group. When making charts, except for market capitalization, all data comes from on-chain activities on Ethereum. Since the ecosystems of Omni, Tron, and Algorand are still in their infancy, I will not consider them for now, with the intention of delving into them at a later point in time.
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There is a certain relationship. (I will write an article about the current status of MakerDAO in the future, so that everyone can learn more about this project). The rest are tokens issued from the bank’s reserves. It is my hope that reading this article will give you a better understanding of how big the market is today and the need to consider non-bank alternatives to structure this space.
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As of this writing, the supply of Tether in the market has grown from 4 billion at the beginning of the year to more than 9.2 billion at present. The change in supply comes from the $1.6 billion issued at the beginning of the year and the $1.4 billion issued in May. USDC followed suit in March and April ($138 million and $148 million), but supply declined in May. Once Tether is excluded, a power law distribution comes into play, and the likes of USDC, Paxos, and BUSD start to split the market share evenly. This is good for the market as customers have more choices. However, most of these represent dollar amounts deposited in banks and are directly at the FSB's disposal from April 2020 onwards. This is part of the reason why collateralized and algorithmic stablecoins will become quite important in the future.
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Monthly transaction volume soared from 2.65 million to 6.8 million
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Average daily on-chain transaction volume has doubled
The amount of on-chain transfers of stablecoins in January was 26 billion yuan. In May, the figure was $49 billion. Most of the growth came from USDT again. In other words - Tether's on-chain transfers have roughly doubled, while its closest peer (USDC) has only seen a 50% gain over the past 6 months. Strong contenders like DAI, which has fallen since the oracle launch in March, are slowly recovering. Currently, Tether dominates.
Retail activity likely to drive numbers up
One of the ways to benchmark stablecoins is by looking at the average transaction size per network. To do this, I add the total number of transfers on-chain and divide by the number of transactions. We can clearly see that although the transaction volume has doubled, the transaction frequency has also gradually increased. This means that the average deal size will decrease over time. In the case of Tether, this means that the average transaction size has dropped from $24,000 to $11,000. USDC also saw a similar decline, which made me realize that this trend is not specific to USDT. Higher retail transaction frequency is the main reason for this trend.
It is meaningless to only consider the average size of transactions without considering the change in the number of active accounts. To get a measure, we measured the number of active receivers on each chain within a day. In terms of scale, this number peaked on June 7, with 211,000 users across major stablecoin projects. On March 13, the number was around 89,000. If you look at the weekly data, every week after the epidemic, the number of active recipients of stablecoins hit a record high. As of this writing, it's approaching 700,000. Measure how much interest there has been in deals since the lockdown was lifted.
DAI emerges as a leading contender
The next question is whether the growth of stablecoins today is concentrated on Tether. The role of the power law here is quite intriguing. On the one hand, Tether is the clear overlord, with over 70% of both transaction value and transaction volume. However, DAI exhibits more transactions than some centralized exchanges and is a leading contender in terms of transaction volume. This could be due to its use in DeFi, a stablecoin for over-the-counter trading, which has a much higher supply (market cap) and average transaction size. However, since users who use DAI usually use it for leveraged trading or DeFi protocols, the frequency of its transactions is higher. In other words, as a token, DAI probably has a lot more daily usage than other exchanges.
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Retail users are increasing
One way to gauge the nature of stablecoin users is to look at the volume of funds transacted across the network. We can understand what drives value growth in terms of volume and number of transactions. My assumption here is that due to the nature of Ethereum's fee model, there is no reason for an individual to consistently make hundreds of low-value transactions. Therefore, the higher the number of low-value transactions, the more retail users make those transactions. The largest subcategory here is deals between $100 and $1,000 in size. Recently, more than 750,000 such transactions have occurred in one transaction channel l. And the transaction amount is between 10 yuan and 100 yuan, there are about 450,000 transactions.
Ethereum Whales Dominate
While institutions trading on a large scale have not accelerated as much as retail investors have entered the market, they have not abated either. In fact, for those deals between $100,000 and $1 million, May set a new monthly high with more than 71,000 transactions. While these charts don’t lead me to think “institutions are pouring in,” it does provide some evidence that stablecoins are being used as currency exchange systems by those with the ability to move weight.
If you look at the total on-chain transaction volume contributed by various exchanges, their impact on transaction volume is better shown. Transactions over $1 million in size contributed about $21 billion in on-chain transfer volume. In May, that figure was $18 billion. For a transaction size of less than 1,000 yuan, the transaction volume on the chain is only 1 billion. It appears that whales are dominating the on-chain value transfer."first level title"Exchanges Still Driving Stablecoin Adoption
