USDC has grown much faster than Tether (USDT) in 2021 and it is emerging as the dominant stablecoin on Ethereum thanks to its popularity in DeFi according to Messari.

Research by the analytics firm revealed that the demand for USD Coin has grown so much that it has consumed a large chunk of Tether’s market share this year.

Researcher Ryan Watkins predicted that in the coming weeks, this could result in Tether' share of the stablecoin supply on Ethereum falling below 50%.

He added that over half of the total USDC supply now sits in smart contracts, which is equivalent to around $12.5 billion. Citing data from CoinMetrics, Messari estimates that more than 40% of the stablecoin supply on Ethereum is USDC.

Watkins stated that the Circle stablecoin has now become the preferred dollar-pegged asset staked in smart contracts in DeFi protocols.

“Although this percentage is not as high as DAI, USDC leads by a wide margin in dollar terms and has become the preferred stablecoin in DeFi for now.”

The USDC supply has surged by more than 1,820% since the beginning of 2021 when there was just 1.3 billion circulating. Currently, the supply of the stablecoin is at a record 25 billion according to Circle.

According to the Tether transparency report, there are 62.7 billion USDT in circulation, an increase of around 200% since the beginning of the year. Of that total, 30.9 billion is currently on the Ethereum network, a figure that has been falling with regularity this year as high network fees have hampered transactions.

The researcher reported that DeFi lending protocols MakerDAO, Compound, and Aave are the largest consumers of USDC, holding around 23% of the total supply.

He added that the trend is likely to continue with the pending launch of Compound Treasury, a new product offering 4% interest on USDC to institutions, and initiatives centered on Circle’s DeFi API, a new platform to ease DeFi operations for businesses.

Earlier this week, U.S. crypto exchange Coinbase also announced that it would pay 4% interest on USDC holdings adding further momentum to the stablecoin. 


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Recommended content


Recommended Content

Editors’ Picks

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.

More Altcoin News
Shanghai court confirms legal recognition of crypto ownership

Shanghai court confirms legal recognition of crypto ownership

A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.

More Cryptocurrencies News
BTC hits an all-time high above $97,850, inches away from the $100K mark

BTC hits an all-time high above $97,850, inches away from the $100K mark

Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.

More Bitcoin News
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.

More Shiba Inu News
Bitcoin: New high of $100K or correction to $78K?

Bitcoin: New high of $100K or correction to $78K?

Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP