Stablecoin “whale wallets” containing greater than USD 1m managed the lion’s share of stablecoin quantity in 2021, regardless of the once-dominant Tether (USDT) more and more being challenged by different stablecoins, in accordance with on-chain analytics agency Nansen.
Of their current report, the analysts said that whale wallets made up greater than 50% of whole stablecoin quantity in 2021, which the agency instructed is as a result of Ethereum (ETH) community changing into “a playground for whales,” seemingly because of excessive transaction charges driving smaller gamers away.
Additional, the report mentioned that the dominance that Tether has loved within the stablecoin market has been challenged by a number of smaller stablecoins over the previous 12 months, partly as a result of “elevated regulatory scrutiny” on the highest stablecoin.
Amongst these smaller stablecoins was USD Coin (USDC), which has “discovered its area of interest as the popular stablecoin in decentralized trades,” with the coin catching up with USDT by way of on-chain quantity in 2021.
Moreover, Pax Greenback (USDP) was additionally highlighted by Nansen, with the agency noting that it grew 6-fold in 2021, making it one of many high 5 stablecoins on the Ethereum community.
One other instance pointed to within the report was the TerraUSD (UST), which the authors known as “promising,” and mentioned had carried out “notably nicely” in 2021, reaching a market capitalization of greater than USD 10bn by the top of final 12 months.
UST is constructed on the Terra (LUNA) blockchain, a community that final month was described by Pantera Capital CEO & founder Dan Morehead as rising at “a really, very speedy charge,” and with the native LUNA token being known as “one of the vital promising cash” for 2022.
Market capitalization of TerraUSD (UST) over the previous 12 months:
The previous 12 months’s development of smaller stablecoins gaining market share at Tether’s expense seemingly signifies that we might see an additional discount in Tether’s dominance within the years forward, the report additional mentioned.
It added that smaller blockchains apart from Ethereum have benefitted from the discount in Tether’s dominance over the course of 2021, whereas additional predicting that multi-chain purposes “would be the norm in 2022.”
Development of varied stablecoins in 2021:
The rise of stablecoins on smaller blockchains pointed to by Nansen follows a 12 months the place the Ethereum community has been suffering from congestion and record-high transaction charges.
The excessive charges have made some decentralized finance (DeFi) associated actions on the community costly, with many more moderen customers specifically searching for out various blockchains like Solana (SOL), Fantom (FTM), Binance Sensible Chain, and others for decrease charges and sooner transactions.
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