Stablecoins on Ethereum had a cumulative transfer volume greater than its native ETH in 2019. This point indicates larger trends at play that could change the broader crypto landscape.The Advent of Stable Money in Crypto
Data from Messari Research suggests ETH’s trailing 12 month transfer volume fell from approximately $430 billion to $150 billion over the course of 2019.
At the same time, stablecoins also followed ETH’s downtrend until July 2019, when these assets began picking up steam.1/ Stablecoin transfer value has now flipped ETH on Ethereum 👀 pic.twitter.com/wwlNF2ObOV — Ryan Watkins (@RyanWatkins_) January 29, 2020
Tether (USDT), in particular, saw significant traction as the project migrated tokens from Omni to Ethereum. But this wasn’t the sole reason for USDT’s volume spike.
On a daily basis, USDT enjoys volume that dwarfs its market cap in comparison. As per CoinGecko data, USDT has a market cap of $4.28 billion and a 24-hour volume of $55.97 billion.
This massive volume comes from Tether’s moat as the stablecoin of choice for investors and traders looking for an easy cash hedge without leaving the cryptocurrency ecosystem.
However, USDT wasn’t the only stablecoin that gained ground in 2019. Joel John, an analyst at Outlier Ventures, investigated the state of stablecoins in early December 2019. In a blog post, he highlighted how DAI has gone from strength-to-strength, finally finding product-market fit alongside the rise of DeFi.Source: Decentralised.co
While USDC and DAI are fighting for dominance as the stablecoin of choice for DeFi’s yield hunters, DAI has been mostly winning this battle due to its permissionless nature.
It remains to be seen if the top DeFi protocols like Compound plan to create USDT money markets, but the possibility cannot be ruled out as more tokens migrate to Ethereum’s ERC-20 standard.DeFi Value Creation Linked to Stablecoin Growth
On Jan. 30, 2...