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The market capitalization of stablecoins reached $19.86 billion, The latest development of several decentralized stablecoin protocols

Original link: https://bihu.com/article/1485006994

Original publish time: September 22, 2020

Original author: HaiBo Jiang, researcher of MYKEY Lab

We released MYKEY Crypto Stablecoin Report to share our interpretation of the development status of stablecoins and analysis of their development trends to help the participants in the crypto market stay updated on the development status of stablecoin. The MYKEY Crypto Stablecoin Report will be published every week, looking forward to maintaining communication with the industry and exploring the development prospects of stablecoin together.

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  • The market capitalization of major stablecoins has increased by $1.334 million to $19.86 billion.
  • Last week, 1 billion USDT migrated from Tron to Ethereum. Besides, Tether additionally issued 500 million USDT on Tron twice and 150 million USDT on Ethereum.
  • From September 13th to 20th, the supply of DAI rose from $475 million to $800 million, an increase of 71%.
  • Pickle developed the feature using Ethereum and stablecoin exchange pairs as LP Tokens to aggregate mining in Uniswap.
  • On September 20, the one-day transaction volume in Curve set a record of $519 million.
  • After the SWRV lower the inflation rate, the total lock-up volume in Swerve was less than $20 million.

1. Overview of Stablecoin Data

First, let’s review the changes in the basic information of the various stablecoins in the past week(September 12, 2020 ~ September 18, 2020, same below).

Market Circulation

Source: MYKEY, CoinMarketCap, Coin Metrics

At present, the market capitalization of major stablecoins has increased by $1.334 million to $19.86 billion.

Source: MYKEY, Coin Metrics

In the past week, the circulation of USDT has increased by 650 million. 1 billion USDT migrated from Tron to Ethereum. Besides, Tether additionally issued 500 million USDT on Tron twice and 150 million USDT on Ethereum. The circulation of USDC increased by 260 million, and the circulation of DAI increased by 230 million. The circulation of PAX, BUSD, TUSD, and GUSD increased by 23.59 million, 93.97 million, 77.86 million, and 1.35 million. The circulation of HUSD decreased by 1.39 million.

The Number of Holding Addresses

Source: MYKEY, DeBank

Last week, the number of main stablecoin holding addresses on Ethereum all increased by 104,702.

Source: MYKEY, DeBank

The number of holding addresses of USDT, USDC, TUSD, and DAI increased by 90,882, 7,319, 570, and 5,947. The number of holding addresses of PAX decreased by 16.

The Number of Active Addresses

Source: MYKEY, Coin Metrics

The number of active addresses of stablecoins last week decreased by an average of 2.43% compared to the previous week.

The Number of 24-hour Transactions on the Public Blockchains

Source: MYKEY, Coin Metrics

Compared with the previous week, the number of daily transactions of major stablecoins decreased by an average of 1.18%.

The Number of 24-hour Volume of Transactions on the Public Blockchains

Source: MYKEY, Coin Metrics

Source: MYKEY, Coin Metrics

The daily volume of transactions of major stablecoins last week decreased by an average of 0.71% from the previous week.

2. The latest development of the decentralized stablecoin protocol

The development of the blockchain industry is changing with each passing day, and so are the stablecoin projects. Last week, several decentralized stablecoin protocols have made great progress. This report will introduce these projects to you.

MakerDAO

MakerDAO is a representative of the decentralized autonomous blockchain project. The stablecoin DAI is the largest on-chain collateralized stablecoin. The governance token MKR can also well realize the unification of power, responsibility, and benefit. With the increase in Dapps on Ethereum, the supply of DAI appears to be insufficient. In the last three months, the supply of DAI has increased by 545%, it still can’t avoid the premium when DAI is in high demand. Last week, MakerDAO passed a series of important votes, which can solve the problem of DAI premium to a large extent.

  • The clearing lines of USDC-A and PAX-A have gone through two rounds of voting, from 110% and 120% to 101%.
  • The debt ceiling of USDC-A was raised from $100 million to $400 million after two votes.
  • Activate TUSD as collateral, the debt ceiling is 50 million, and the clearing line is 101%.
  • The global debt ceiling of DAI is raised to 1.2 billion.

After a series of expansionary votes, the supply of DAI rose to $800 million, a 70% increase from a week ago. The market capitalization of DAI also exceeds the market capitalization of its governance token MKR. The price of DAI will be closer to the centrally issued USDC, PAX, and TUSD. When DAI has a premium of more than 1%, arbitrageurs can borrow DAI near the clearing line and sell it on the secondary market and can ignore liquidating risks.

This also brings centralization risk to DAI. Previously, because DAI was the only large-scale decentralized stablecoin issued on Ethereum, the application of DAI on the blockchain was generally better than centralized stablecoins. After that, the boundary between centralization and decentralization may become blurred.

Pickle

When the demand for a certain stablecoin increases, a premium of more than 3% may appear in the short term. This situation has become frequent in recent yield farming, and users need to switch between different stablecoins. When the popularity of mining passes, the premium will disappear, and users may suffer a 3% principal loss in a short period. As the profitability of yield farming decreases, this loss will be unacceptable for many people.

Pickle Finance wants to use incentives to allow stablecoins such as DAI and sUSD to return to their anchored value ($1). In the beginning, PICKLE tokens will be distributed to the pledgers of Uniswap LP Tokens of ETH and DAI, USDC, USDT, and sUSD. The LP corresponding to the stablecoin with the lower price will be rewarded with more PICKLE tokens, which will encourage liquidity providers to sell stablecoins with higher prices and buy stablecoins with lower prices.

The Pickle Swap feature will help users complete the conversion of LP Tokens with one click, including the conversion between platforms (now only supports the conversion from SushiSwap to Uniswap) and the conversion of LP Tokens between different stablecoins and ETH in the platform.

pJar is the valut in Pickle. Users can pledge Uniswap LP Tokens. pJar will help users automatically mine and sell UNI to exchange for more underlying assets. pJar realizes the aggregate mining using Ethereum and stablecoin as LP Tokens on Uniswap. After users pledge Uniswap LP Tokens in pJar, they will get pToken, such as staking UNIV2 DAI/ETH LP will get pUNIDAI. Over time, 1 pUNIDAI will correspond to more UNIV2 DAI/ETH LP. Staking pUNIDAI will also receive additional PICKLE rewards.

Although Pickle Finance may not be able to achieve the goal of returning stablecoins to anchored value, this direction is worth the effort. Because of the token incentives of Uniswap, more and more stablecoins and ETH exchange pairs will be used for mining in Uniswap, and pJar aggregate mining will be more useful.

Curve

Curve was originally a stablecoin exchange protocol. With the development of cross-chain assets, there are now many Bitcoin anchor tokens on the platform. When trading in Curve, the platform only charges a 0.04% commission. In August, after the release of Curve’s platform token CRV, the funds in Curve rose from less than $300 million to more than $1 billion. Currently, Curve has a total of $1.6 billion in assets. On September 20, the one-day transaction volume in Curve set a record of $519 million.

The price of CRV has dropped from $30 at the initial issuance to $1.4 now, and the annualized rate of return in the y pool has also dropped to 14.39%, but there are still more than $600 million stablecoins in the y pool. The decrease in mining yield did not reduce the amount of funds and transactions in Curve. It can be seen that the token incentives of Curve are effective. After the revenue declines, users have not lost a lot.

Swerve

Two weeks ago, Swerve forked from Curve. Its governance token SWRV has no team reservations and no pre-mining. Swerve has also optimized the gas fee in use. Because of the high incentives at the early stage, the total lock-up volume in Swerve reached up to $900 million. However, the economic model of Swerve has a fatal problem. It allocates 9 million SWRV in the first two weeks and 9 million SWRV in the following year. At the end of last week, SWRV completed its first token-issued cut, and now the total lock-up volume in Swerve is less than $20 million. A decrease in the lock-up volume will increase transaction slippage, which will affect the experience of Swerve.

Tips

To better communicate with industry insiders, we decided to add two sections for questions of readers and opinions of guests. If readers have questions about stablecoins, please contact us. We will pick meaningful questions to answer in the next issue. At the same time, welcome guests from the industry to share your views on stablecoins. Contact information: jianghb@mykey.org.

This is what we’re sharing in this MYKEY Crypto Stablecoin Report, welcome to stay tuned for follow-up crypto stablecoin reports. We will provide more interpretations of the development status of stablecoins and analysis of their development trends to help you stay updated on the development status of stablecoin in the follow-up report.

PS: MYKEY Lab has the final right to interpret the content of the article, please indicate the source for the quotation. Welcome to follow our official account — MYKEY Lab: MYKEY Smart Wallet.

Past review

Crypto Stablecoin Report 14: The increase of Ethereum Gas Fee makes the transfers of stablecoin transactions on the blockchain

Crypto Stablecoin Report 15: The market capitalization of stablecoins increased to $15.961 billion, On-chain usage of stablecoins

Crypto Stablecoin Report 16: The connection between stablecoins and real assets

Crypto Stablecoin Report 17: The market capitalization of stablecoins increased to $17.544 billion, Decentralized payment protocol Celo

The market capitalization of stablecoins increased to $18.53 billion, The rise of CBDC

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