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, based on on-chain analytics agency Nansen.
Of their latest report, the analysts said that whale wallets made up greater than 50% of complete stablecoin quantity in 2021, which the agency steered is as a result of Ethereum (ETH) community turning 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 yr, partly because 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 in phrases of on-chain quantity in 2021.
Moreover, Pax Dollar (USDP) was additionally highlighted by Nansen, with the agency noting that it grew 6-fold in 2021, making it one of the highest 5 stablecoins on the Ethereum community.
One other instance pointed to within the report was the TerraUSD (UST), which the authors referred to as “promising,” and mentioned had carried out “notably properly” in 2021, reaching a market capitalization of greater than USD 10bn by the top of final yr.
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 fast fee,” and with the native LUNA token being referred to as “one of the most promising coins” for 2022.
Market capitalization of TerraUSD (UST) over the previous yr:
The previous yr’s development of smaller stablecoins gaining market share at Tether’s expense seemingly implies that we may see an additional discount in Tether’s dominance within the years forward, the report additional mentioned.
It added that smaller blockchains aside 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 numerous stablecoins in 2021:
The rise of stablecoins on smaller blockchains pointed to by Nansen follows a yr the place the Ethereum community has been tormented by 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 particularly in search of out various blockchains like Solana (SOL), Fantom (FTM), Binance Sensible Chain, and others for decrease charges and quicker transactions.
Be taught extra:
– US Regulator Calls For Stablecoin Bank Regulation, Coordinated Regulatory Approach To Crypto
– Tether Freezes USD 160M-Heavy Addresses on Law Enforcement Request