The Block 2020 Stablecoin Report: The supply exceeds $54 billion, and the total transaction volume exceeds PayPal

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Chain News ChainNews (ID: chainnewscom)

Chain News ChainNews (ID: chainnewscom)

• , by Larry Cermak, Research Director at The Block, translated by Lu Jiangfei, published with permission.

• The stablecoin market has seen incredible growth over the past year, with a current supply of over $54 billion and an average monthly on-chain transaction volume of $380 billion. Recently, The Block released a 130-page report on the stablecoin market. The key points of the report are now extracted as follows:

• Since January 2020, several stablecoin business metrics have seen huge growth, such as:

• Stablecoin supply grew from $5.9 billion to $54.2 billion;

• Average monthly transaction volume increased from $235 billion to $384 billion;

The number of stablecoin holding addresses greater than $100 increased from 284,000 to 1.85 million;

• The number of daily active addresses increased from 53,000 to 307,000;

• The average daily transaction volume increased from 98,000 to 594,000.

• However, although various indicators have increased a lot, there is not enough product support. In fact, the main reasons for the surge in the stablecoin market last year are as follows:

• Miners use Bitcoin to pay back Tether debt;

• The surge in popularity of Tether collateralized derivatives;

The DeFi and yield farming boom;

In the spot market, Bitcoin lost its lead as a "base currency";

Institutional demand for Bitcoin increases.

In 2020, the volume of stablecoin transactions reached 110 million, with a total transaction value of more than $1 trillion. By comparison, PayPal had 154 billion transactions last year, with a total transaction value of about $936 billion. From this we can clearly see the difference, in terms of average transaction value, PayPal is about $60 per transaction, while stablecoins are over $9,000.

On the one hand, stablecoin transaction fees are indeed slightly higher; on the other hand, there are not many other use cases for stablecoins (mainly transactions), so the transaction volume of most stablecoins is higher than $100. About 40% of all stablecoin transactions are between $100-$1000.

At this stage, the cryptocurrency exchange Binance has the largest number of stablecoins. According to data at the end of January, the total amount of stablecoins held by Binance is close to 10 billion US dollars. In addition, a large number of stablecoins are also locked in DeFi protocols, such as Curve, Aave, and Uniswap.

About 40% of the stablecoin supply comes from exchanges, 11% from DeFi protocols, and the rest from wallets, OTC platforms, trading firms, etc.

The graph below shows the geographical distribution of the two most popular stablecoins, USDT and USDC. Among them, USDT is the most used in Asia, while USDC is the most used in the United States. This is mainly because many Asian exchanges chose the USDT stablecoin early .

The vast majority of stablecoins are anchored to legal tender and use legal tender as collateral, accounting for 96%. The main reason for choosing to link with fiat currency is that this method is the most scalable and the implementation process is very simple.

• As of the end of January, 70% of the stablecoin supply was on the Ethereum blockchain, 27% on the Tron blockchain, and another 3% on OMNI.

• There is a staggering statistic that 99% of the stablecoin supply is currently pegged to the U.S. dollar. There are two main reasons for this: one is because traders still prefer the U.S. dollar, and the other is that it is more difficult to redeem non-U.S. dollar stablecoins , and the interest rate is relatively low.

• Tether is currently the most "market dominant" stablecoin, let's take a look at the relevant data:

• Tether accounts for 69% of the stablecoin supply;

• Tether accounted for 63% of stablecoin transactions;

Tether accounts for 88% of stablecoin daily active addresses;LinkTether accounts for 89% of the average daily trading volume of stablecoins.