ChainCatcher reported that according to The Block, PayPal's stablecoin PYUSD has been losing market share since it reached a high of more than $1 billion in market value at the end of August (the fourth largest stablecoin at the time). The token currently has a market value of $618 million, down 40% in the past month and a half. The Solana-based PYUSD market value is currently about $267 million, down from a high of more than $600 million in August. At the same time, more than $350 million of PYUSD tokens are circulating on Ethereum.

The stablecoin’s growth has been fueled in large part by PayPal’s partnership with Solana lending market Kamino Finance, which has agreed to pay PYUSD holders a hefty yield subsidized by the payments giant. Yields on PYUSD deposits on lending protocol Kamino have fallen from around 17% to below 7% in recent weeks. Double-digit annualized rewards offered to PYUSD holders by Solana-based protocols Drift and Marginfi have also taken a hit. However, the trend could be reversing. On Tuesday, Kamino added PYUSD to its “Altcoin Markets,” enabling users to borrow against their positions in meme coins like WIF, POPCAT, and BONK. The arrangement will pay depositors a total of $10,000 in additional PYUSD rewards each week. By comparison, PYUSD lenders on Ethereum-based decentralized exchange Aave currently earn yields of around 4.3%.

Over a similar six-week period, the market capitalizations of the two largest stablecoins, USDT and USDC, have remained largely stable. Since August 31, Tether’s stablecoin market capitalization has increased by $1 billion, while Circle’s token market capitalization has increased by $2 billion and then decreased by $2 billion.