On-chain data shows that PayPal’s stablecoin PYUSD has lost nearly 30% of its market value in the past 30 days, falling from more than $1 billion to $712 million on September 25.
The main reason for the decline in market capitalization is the significant reduction in the market capitalization on Solana. On August 26, the market capitalization on Solana accounted for approximately 65% of the total market capitalization.
As of September 25, PYUSD circulating or locked in the Solana ecosystem has dropped from $662 million to $364 million. In contrast, its market capitalization on Ethereum has remained stable at $340 million during this period.
However, according to Artemis data, PYUSD’s average daily transfer volume over the past 30 days was relatively high. The stablecoin’s average daily transfer volume was $242.2 million, only $11.6 million lower than the average daily transfer volume between July 28 and August 25.
While market capitalization fluctuations in stablecoins are not uncommon, PYUSD’s negative market capitalization deviation came at a time when the entire stablecoin market grew by nearly 1.6%, or $3 billion.
The decline may be due to the fact that DeFi yields have fallen by nearly 50% during this period.
As of September 24, the yield for providing PYUSD as collateral on Kamino has fallen by nearly 50% to 7.6%, compared to 14% at the end of August.
As a result, the total amount of stablecoins locked in the protocol fell from $430 million to $296 million, a 30% drop.
Despite the decline in PYUSD’s market cap, it remains the third-largest stablecoin in the Solana ecosystem, behind TetherUSD (USDT) with $728 million and USDCoin (USDC) with $2.6 billion.
It is worth noting that the reduction in incentives may be related to PayPal’s closure of a series of partnerships related to PYUSD. According to Fortune magazine on August 22, PayPal partnered with Anchorage Digital to provide stablecoin rewards.
Therefore, PayPal may allocate rewards to different areas, expecting to gain benefits in various fields related to Crypto assets.
In addition, according to Bloomberg, PayPal announced on September 25 that it will allow corporate accounts located in the United States to buy, sell and hold Crypto assets.
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