Encrypted Stablecoin Report: Nearly 13 additional issuances of USDT came from Tron, driving the increase in the use of the Tron network
Author: MYKEY researcher Jiang Haibo
To help crypto market participants keep updated on the development status of stablecoins, we launched the MYKEY Stablecoin Report to share our interpretation of the development status of stablecoins and analysis of their development trends. Looking forward to maintaining exchanges with peers and jointly exploring the development prospects of stablecoins.
quick preview Author: MYKEY researcher Jiang Haibo To help crypto market participants keep updated on the development status of stablecoins, we launched the MYKEY Stablecoin Report to share our interpretation of the development status of stablecoins and analysis of their development trends. Looking forward to maintaining exchanges with peers and jointly exploring the development prospects of stablecoins. quick preview Last week, Tether continued to issue an additional 200 million USDT on the Tron network. The market capitalization of USDC increased by $94.93 million. In the past two years, there have been only two additional issuances of USDT on Omni, totaling $550 million. We first review the changes in the basic information of each stablecoin in the past week (June 12, 2020 to June 18, 2020, the same below). market liquidity Source: MYKEY, Coinmetrics Source: MYKEY, Coinmetrics Source: MYKEY, Coinmetrics Over the past week, the stablecoin market capitalization has increased by approximately $264 million. Among them, Tether issued 2 additional issues on the Tron network, totaling about 200 million USDT; the circulation of USDC increased by about 94.93 million US dollars, and the market value reached 829 million US dollars; the circulation of PAX and TUSD increased by 810,000 and 10,000 US dollars respectively; The circulation of BUSD, HUSD, DAI, and GUSD decreased by 16.41 million, 1.11 million, 14.46 million, and 70,000 USD respectively. The growth of the stable currency market value mainly comes from USDT and USDC, and the growth of USDT comes from Trc20 USDT. According to our observations, since May 8 this year, all 13 additional USDT issuances have occurred on the Tron network, with a total of USD 1.48 billion additional issuances. Number of currency holding addresses Source: MYKEY, DeBank Source: MYKEY, DeBank Source: MYKEY, DeBank The decline in the number of currency-holding addresses came from USDT, which decreased by 140,078; the number of currency-holding addresses in PAX, USDC, DAI, and TUSD increased by 5,083, 4,359, 1,659, and 493, respectively. Active addresses Source: MYKEY, Coinmetrics As the number of stablecoin active addresses hit a record on June 7, the overall number of stablecoin active addresses fell back by about 14% last week. Number of transactions on the chain in 24 hours Source: MYKEY, Coinmetrics image description 24-hour on-chain transaction volume Source: MYKEY, Coinmetrics Source: MYKEY, Coinmetrics image description Last week, the daily transaction volume of major stablecoins maintained the recent transaction level, and the proportion of daily transaction volume of each stablecoin did not show a trend change. secondary title In the 2nd Stablecoin Report, we saw a large amount of USDT issued in the Tron network. Now, there is evidence that this is intensifying. Over the past month or so, all additional issuance of USDT has been in the Tron network. In this report, we hope to review and summarize the development of USDT on various public chains, analyze the reasons behind it, and better judge the future development trend. Although USDT has been controversial because of insufficient collateral behind it, it still cannot change investors' demand for USDT. On the Compound platform, USDT’s lending rate is as high as 17.31%, while ZRX, which has the second highest lending rate, is 2.82%, and USDC, which is also a stablecoin with the third highest lending rate, is only 2.66%. First, make a summary of Tether's assets and liabilities, to initially observe all the tokens issued by Tether and the reserves behind them. Tether not only issues USDT anchored to the US dollar, but also EURT, CNHT, and XAUT anchored to the euro, renminbi, and gold. According to the data released by Tether, Tether's liabilities include USD 9.631 billion in USDT, EUR 40 million in EURT, CNHT in RMB 23.53 million, and XAUT in 50,000 ounces of gold. Based on the current gold price of $1,743/oz, the market value of XAUT exceeds that of EURT and CNHT, and is second only to USDT. The assets behind USDT are US$9.778 billion, which is US$147 million higher than liabilities; the assets behind EURT, CNHT and XAUT are basically equal to liabilities, and Tether claims that all issued tokens have 100% margins behind them. image description Source: MYKEY, Tether At present, the market value of stablecoins is about 11.5 billion US dollars, of which USDT has a market value of nearly 10 billion US dollars, accounting for 86.2%. USDT is in circulation on Omni, Eth, Tron, EOS, Liquid, and Algorand, and the corresponding market values are 1.197 billion, 5.668 billion, 2.743 billion, 5.251 million, 16.56 million, and 1 million US dollars. Next, review the development of USDT on various public chains. Originated from Omni Tether was established in 2014. At the beginning, the issuance and trading of USDT used the Omni protocol. Omni (formerly known as Mastercoin) is a digital currency and communication protocol based on the Bitcoin blockchain. It was officially launched on July 31, 2013, and it also has its own token OMNI. In February 2014, OMNI was the seventh largest cryptocurrency in the world. Currently, Coinmarketcap shows that the market value of OMNI is only 1.07 million US dollars, ranking 945th. The Omni protocol is implemented by tracking the lock script starting with OP_RETURN in the Bitcoin network transaction. The transfer of tokens such as USDT is actually paid for by Bitcoin. However, for the convenience of users, exchanges generally charge users directly USDT, and then converted into Bitcoin to pay the miners. Therefore, the transfer of Omni USDT has no substantive connection with the OMNI token itself. The last additional issuance of USDT on Omni occurred on April 14, 2019, and the circulation of USD T on Omni has been decreasing since then; the previous additional issuance of USDT on Omni was on June 25, 2018. In the past two years, USDT has been issued twice on Omni, with a total of 550 million US dollars. Source: MYKEY, Coinmetrics The situation on Ethereum is exactly the opposite of Omni. Before April 8, 2019, USDT was issued 4 times on Ethereum, with a circulation of about 60 million US dollars. Subsequently, intensive additional issuance on Ethereum began. image description On October 29, 2019, the circulation of ERC20 USDT surpassed Omni USDT for the first time, with the circulation of 1.78 billion and 2.02 billion U.S. dollars respectively. We call this the first public chain transfer of USDT, which is the pursuit of USDT's practicality. Currently, the circulation of USDT on Omni, Eth, and Tron is 1.34 billion, 5.74 billion, and 2.88 billion U.S. dollars, respectively. Recreating Greatness in the Tron Network Free transfers are probably the biggest advantage of TRC20 USDT. Like the congestion in geographical location, when the Ethereum network fee is getting higher and higher, some functions of USDT are transferred to other public chains, while Tether chooses Tron. On the basis of Ethereum, Tron further reduces the degree of decentralization, improves scalability, and provides low-cost USDT transfer services. The most noteworthy thing is that the recent USDT issuance all happened on Tron. image description Source: MYKEY, Tether EOS itself is not niche, with many fans and users, but the barrier to use is too high, and the degree of decentralization has also been questioned. In the EOS network, there are four resources involved: RAM, CPU, NET, and storage. The consumption of these resources began to trouble some users when they registered. In addition, the EOS version of USDT needs to enter MEMO (remarks) when transferring funds, which is very inconvenient to operate. Therefore, although there are more users and transactions on EOS, the circulation of USDT on EOS is only 5.25 million US dollars. In March of this year, Tether issued 1 million USDT on the Algorand blockchain. Currently, the circulation of USDT on Algorand is still only 1 million US dollars, which has not increased in the past 3 months. Algorand can better solve the balance between "decentralization", "scalability", and "security". The USDT issued on it can be regarded as a test for the next generation of public chains, but the current users of Algorand And the transaction volume on the chain is not large, and the demand for USDT is not much. secondary title 3. Taking history as a mirror to gain insight into future trends Can the additional issuance of USDT bring value enhancement to the public chain? The additional issuance of USDT will increase the value carried by the public chain, and more people may use the public chain, transactions on the chain will become more frequent, and DApp users on the chain may increase. In theory, this situation should increase the value of the public chain and lead to a certain increase in the price of native tokens. Analogous to DeFi projects, the price of governance tokens has risen sharply with the rise of mortgage assets. Since April 2019, a large number of USDT has been issued on Ethereum, and in October it exceeded the circulation on Omni. During this period, Ethereum performed like other altcoins, and ETH/BTC showed a clear downward trend (but the decline of ETH/BTC was smaller than that of TRX/BTC). Now, only TRC20 USDT is issuing additional tokens, which has been going on for more than a month. Similarly, TRX/BTC has not seen a significant rise, and TRX/ETH is almost at an all-time low. Therefore, in practice, the additional issuance of USDT does not necessarily increase the price of native tokens on the public chain. image description Source: MYKEY, Coinmarketcap Can USDT in the Tron network surpass Ethereum? According to the current trend, the USDT in the Tron network may exceed that of Ethereum. We observed that when USDT began to be issued in large quantities in the Ethereum network, its circulation growth on Omni stagnated and continued to decline, and eventually the circulation of USDT in the Ethereum network surpassed Omni. Likewise, USDT on the Tron network is now massively increasing, while USDT on the Ethereum network has not increased in over a month. Combined with historical experience, if this situation is regarded as a change in the trend of additional issuance, the USDT in the Tron network may exceed that of Ethereum. From the beginning of May to the present, the number of USDT daily transactions on the Tron network has increased by about 124%, the daily number of USDT transactions on the Ethereum network has increased by 34%, while the number of USDT transactions on the Bitcoin network has remained basically unchanged. This is different from what we observed in our second report. As USDT continues to increase in the Tron network, the number of USDT daily on-chain transactions in the Tron network has shown a significant increase. The additional issuance of TRC20 USDT can indeed drive the use of the Tron network. During the same period, the number of daily transactions on the entire Ethereum network rose by 5.6%, while the number of daily transactions on the Tron network rose by 15.5%. Source: MYKEY, Coinmetrics This issue of the MYKEY stablecoin report has shared so much, please pay attention to the follow-up reports. In the follow-up reports, we will provide you with more interpretations of the development status of stablecoins and analysis of their development trends, so as to help you continuously update your understanding of the development of stablecoins.1. Overview of Stablecoin Data
Source: MYKEY, Coinmetrics
Liquid is a Bitcoin sidechain designed by Blockstream to meet large and private transactions. During the transaction, the Liquid network will hide the transaction amount and account balance. The circulation of Liquid USDT is 16.56 million US dollars, of which 15 million was transferred from Ethereum to Liquid by Tether through a cross-chain swap transaction on January 7, 2020. Since Liquid USDT is aimed at large customers such as exchanges and OTC, the number of transactions is not large.
