Connect with us
Active Currencies 14794
Market Cap $2,467,692,571,200.00
Bitcoin Share 51.25%
24h Market Cap Change $-0.87

What USDC’s diminishing dominance on Ethereum means for the stablecoin 

2min Read

Share this article

According to a new Messari report, USDC was observed to be losing traction in the stablecoin market. BUSD on the other hand, was witnessing some growth. With new coins entering the stablecoin market and the ever-growing competition, it may become difficult for USDC to maintain its standing in the market.

Looking deeper into the stablecoin well

One indicator of things not going USDC’s way would be its dominance on Ethereum [ETH]. USDC’s dominance on the ETH network fell 5% since July. Meanwhile, BUSD’s dominance over the same network increased by the same 5% in the same time frame.

The USDC dominance, in early July 2022, had peaked and captured 44% of the Ethereum network. However, it slipped down to 39% at the time of press according to Messari. However, despite losing out on its dominance on the Ethereum network, the stablecoin managed to perform relatively well on Layer2 chains.

As can be seen from the image below, USDC grew significantly on L2 rollups, such as Arbitrum and Optimism. USDC’s dominance on the OP network stood at 58%, while on Arbitrum stood at almost 75%. 

Even though there was high dominance of USDC observed on both of these protocols, one of the reasons for the growth in the protocol could be attributed to the fact that simply fewer stablecoins were used on these L2s.

Source: Messari

Taking a look at USDC’s network growth on multiple networks could also give us an insight into the stablecoin’s future. As can be seen from the image below, the network growth on all three networks (Blue: Ethereum, Green: Optimism and Red: Polygon) declined over the past month.

This indicated that the amount of new addresses that transferred a USDC  for the first time declined. This implied that new addresses were losing interest in the stablecoin.

However, over the past few days, there was an uptick in USDC’s network growth on the Polygon network— a good sign for USDC.

Source: Santiment

USDC’s still on a roll

Despite USDC’s fluctuating dominance, it was observed that it still maintained lead in terms of transfer volume. As can be seen from the image below, USDC accounted for 54.5% of the stablecoin transfer volume at press time.

Source: Dune Analytics

At the time of writing USDC also stood second in terms of market capitalization at $45 billion. Its volume also registered a growth of 10.39% in the last 24 hours.

 Even though BUSD showed some improvements, the stablecoin’s market cap was at 21 billion and still had a long way to go to catch up with USDT and USDC.

Share

Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
Read the best crypto stories of the day in less than 5 minutes
Subscribe to get it daily in your inbox.
Please check the format of your first name and/or email address.

Thank you for subscribing to Unhashed.