Stablecoins on #Ethereum (ETH) have experienced a 34% decrease in value since 2022, whereas stablecoins on the Tron network (TRX) have been on a steep rise, with a growth of 57.7%.

Sharp Decline in Stablecoins on Ethereum

The latest report from Sixdegree Lab reveals that the supply of stablecoins on the Ethereum network continues to decrease. From its peak of $100 billion, it has fallen to $66 billion, representing a 34% decline. This trend indicates diminishing interest in stablecoins on the Ethereum platform.

 Steady Growth of Stablecoins on Tron

On the contrary, the supply of stablecoins on the #Tron network is following a steeper trajectory, increasing from $31 billion in 2022 to $48.9 billion. This remarkable growth of 57.7% aligns with the overall cryptocurrency market trend.

 Overall Stablecoin Value Remains Unchanged

Despite recent periods of rising cryptocurrency prices, the overall value of stablecoins has not significantly changed. Currently, the total market value of stablecoins stands at $129.5 billion, reflecting a 31% decrease compared to its peak value of $188 billion.

Largest Market Shares Among Stablecoins

Tether (USDT) commands the largest market share among stablecoins at 56.3%, followed by USD Coin (USDC) at 30.5%, and DAI at 5.07%. These three stablecoins together hold values of $40.03 billion, $21.7 billion, and $3.6 billion, respectively.

 Distribution of Stablecoin Holders

Approximately 50% of stablecoins are held by externally owned accounts (EOA), while centralized exchanges (CEX) account for roughly 30%. In contrast, decentralized finance (DeFi) protocols hold only about 5.5% of stablecoins, a significant decrease from their peak of around 25% in January 2022.

 The decline in the supply of stablecoins within DeFi protocols on Ethereum can be attributed to the rise of Ethereum Layer2 solutions. These Layer2 solutions have provided a more favorable environment for the development of DeFi and innovative protocols.

 Stablecoin Holders on Ethereum

The majority of stablecoin holders on Ethereum (94.2%) hold stablecoins worth less than $1,000, contributing to only 9.28% of the total stablecoin holdings. In contrast, addresses with more than 100,000 stablecoins make up only 0.562% of all addresses but account for a significant 87.6% of the total stablecoin holdings.

Interestingly, approximately 60% of stablecoins held by these top addresses remain inactive. These addresses are either considered reserve addresses, with a spending-to-revenue ratio below 0.2, or inactive addresses that have not engaged in any stablecoin transactions in the last 180 days.

 Stablecoins Still Play a Vital Role

Back in November 2022, there was a positive change in the supply of the four largest stablecoins (USDT, USDC, Binance USD, and Dai), marking the first such occurrence since the collapse of Terra in mid-May 2022.

Stablecoins have become a crucial element for financing cryptocurrency purchases since 2020. The increase in their supply is seen as potential buying pressure or a reserve of funds that investors can use to buy cryptocurrencies or as margin in derivatives trading. Stablecoins continue to be key to daily operations in the cryptocurrency industry, acting as a bridge between traditional finance and the world of cryptocurrencies.

 Stablecoins have become the backbone of the cryptocurrency market," said William Quigley, one of the co-founders of Tether. "Stablecoins are a fundamental component of practically all DeFi applications. Without stablecoins, trading volume and liquidity in the crypto market would likely decrease by 75%."

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