The Ethereum blockchain is the most used because of the stablecoins
Over the past month, the Bitcoin price (BTC) has been trading in a narrow range and the volume of trade has been relatively flat. Meanwhile, several tokens on the Ethereum network have been topping the price lists, especially the Decentralized Finance (DeFi) tokens.
New data from Messari shows that Ethereum has just overtaken Crypto Trader as the network that settles the highest value per day. This means that the dollar value of Ether’s (ETH) transactions and its tokens is now higher than Bitcoin’s.
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While the DeFi sector has gained in popularity, stable currency transactions have been responsible for most of this volume, having settled over USD 508 billion in transactions over the course of 2020. This figure is almost double the $253 billion settled in 2019.
Tether (USDT) is the largest stable currency responsible for the volume and, according to Messari, could possibly surpass Bitcoin as the most traded cryptomone currency in the market.
Stable currencies continue to grow exponentially
Bitcoin offers coins that work through protocols like Counterparty and Omni, but these assets pale in comparison to the smart contract capabilities of the Ethereum network, which continues to show through the new possibilities of DeFi. Along with lower rates and faster transaction times, the Ethereum has become the chain of choice for stable centralized and decentralized currencies alike.
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While the USDT was first issued in the Bitcoin block chain, only 13.2% of its supply currently resides in BTC, while the Ethereum blockchain holds 59.8% of the USDT supply. As most of the USDT balance is held at Ethereum, the USDT is also the largest gas spender in the network, according to data from ETH’s gas station.
Led by the USDT, the collective capitalization of the stable currency market grew from USD 2.4 billion to around USD 8 billion in the first quarter alone. Another USD 3.8 billion was added in the second quarter, bringing the current figure to over USD 12 billion, with approximately USD 9.18 billion belonging to Tether. Tether has also surpassed Ripple (XRP) as the third largest crypt currency.
DeFi is driving demand for stable currencies
While interexchange settlement is the most popular use for stable currencies, DeFi has also been a considerable force in the increased activity observed in the Ethereum network. Because of their link to fiduciary currencies, stable currencies are quite popular among DeFi lending protocols that have been gaining ground throughout 2020.
The platforms have seen notable increases in the amount of funds secured and in the second quarter the figure rose to over USD 2 billion. Compound alone reached a major milestone with over USD 1 billion of assets borrowed in total.