Encrypted Stablecoin Report: The market value of stablecoins reached 11.692 billion US dollars, and USDC was issued an additional 124 million
Editor's Note: This article comes fromEditor's Note: This article comes fromTo 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.
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
quick preview
The circulation of the stablecoin market reached 11.692 billion U.S. dollars. Last week, the issuance of USDT was suspended.
USDC's circulating supply increased by $124 million to $953 million.
Algorand has reached a cooperation with Circle to issue USDC on Algorand.
Both BUSD and HUSD are issued in cooperation with Paxos, and BUSD, HUSD, and PAX are interchangeable.
Among the major stablecoins, HUSD holds the most concentrated currency, and the largest address holds 89.9% of the currency. This address is owned by Huobi.
secondary title
1. Overview of Stablecoin Data
image description
market liquidity
Source: MYKEY, Coinmetrics
image description
Source: MYKEY, Coinmetrics
image description
Number of currency holding addresses
Source: MYKEY, DeBank
image description
Source: MYKEY, DeBank
image description
Active addresses
Source: MYKEY, Coinmetrics
image description
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
Last week, the average daily transaction volume of major stablecoins increased, mainly due to the high on-chain transaction volume of ERC20-USDT and TRC20-USDT on June 22.
secondary title
The circulation of the US dollar stable currency market is close to 11.7 billion US dollars, and the market value of USDT ranks third among cryptocurrencies. Since July 2018, the trading volume of the BTC/USDT trading pair has accounted for more than half of the trading volume of BTC. According to data from Coinmarketcap, the daily trading volume of USDT has far exceeded that of Bitcoin. In addition to USDT, the main stablecoins include USDC, PAX, BUSD, HUSD, TUSD, GUSD, and DAI. Faced with a wide variety of stablecoin projects, investors will inevitably have some questions: Are these projects safe? Is it compliant? Are there sufficient reserves? In this issue of the MYKEY Stablecoin Report, we will analyze in detail the market size, compliance, asset transparency, token distribution, and market performance of these stablecoins, and make comparisons on these dimensions.
Source: CryptoCompare
1. Market size
1. Market size
Source: MYKEY, Coinmetrics
Source: MYKEY, Coinmetrics
2. Compliance
2. Compliance
As the scale of stablecoins increases, the regulatory pressure on stablecoins will increase. Among the mainstream stablecoins, USDT has the worst compliance. Other off-chain collateralized stablecoins meet different levels of compliance conditions, while the on-chain collateralized stablecoin DAI is difficult to be regulated.
USDT: iFinex, the parent company of Tether, is also the parent company of the exchange Bitfinex. USDT is not a compliance project, and has made some concessions to regulation in recent years. For example, in the United States, services are only provided to eligible contract participants (Eligible Contract Participants), and North Korea, Iran, Pakistan and other countries are prohibited from using the Tether platform.
USDC: USDC is a stable currency developed by Center Consortium, an enterprise jointly invested and operated by Coinbase and Circle. The source code of USDC is open source, and it has been licensed as a money transfer institution in the United States and as an electronic money institution in Europe, complying with the supervision of the "Money Transmission Act" in the United States. USDC is issued using the CENTER open source framework and membership system. Using this framework, financial institutions can become issuers of USDC and other stable coins (EURC, JPYC, GBPC). Issuers should meet technical, operational, regulatory, and compliance requirements , Audit requirements.
Pax: Paxos itself is a New York State chartered trust company regulated by the New York Department of Financial Services (NYDFS). It is subject to the highest degree of supervision to ensure that customer assets are protected to the highest degree and meet NYDFS requirements for capital reserves, compliance, anti-money laundering, etc. special requirements. PAX is one of the most compliant stablecoin projects. Similarly, there are exchanges behind Paxos, which established the itBit exchange in Singapore in 2013.
BUSD: BUSD is a stable currency jointly launched by Binance and Paxos. The issuance of BUSD has also been approved by NYDFS and is mainly used in Binance’s own channels. Compliance, custody, asset transparency and PAX approximation.
HUSD: Similar to BUSD, HUSD is issued by Stable Universal under Huobi. It also uses the Paxos channel and is mainly used in the ecology of Huobi. An address belonging to Huobi holds 89.9% of the total HUSD.
TUSD: TUSD is a stable currency launched by TrustToken, which is registered as Money Service Business (MSB) in the United States. There is very little news about compliance on the official website. TrustToken claims that it does not take over funds, and investors transfer funds to trust companies to generate TUSD through smart contracts.
GUSD: Gemini is a US compliant exchange with the highest level of banking compliance and fiduciary duty standards. GUSD is issued by Gemini Trust Company, LLC, a regulated New York trust company. GUSD and PAX are the first to be issued through the approval of NYDFS.
DAI: DAI is a borderless decentralized stablecoin generated by staking digital assets in MakerDAO. MakerDAO is a decentralized protocol on the Ethereum network that is difficult to regulate and may not face compliance issues.
Judging from the background of these stablecoins, there are almost exchanges and trust institutions behind them. Although USDC, PAX, BUSD, HUSD, TUSD, and GUSD are all compliant stablecoins, the degree of compliance varies. We believe that the stablecoins approved by NYDFS have the highest degree of compliance, including the first batch of PAX and GUSD, as well as BUSD and HUSD jointly issued by Paxos; followed by USDC and TUSD; lastly, USDT, and DAI is not included in the comparison range . It can also be seen from the information on the official website that USDC and TUSD have very little information about compliance.
3. Asset transparency
Asset transparency allows investors to keep abreast of the reserves behind the stablecoin. It is difficult for investors to find out the bank account funds of the stablecoin issuer on their own, and they can only learn about it through professional custody, auditing and other channels.
USDT: Although Tether stated that the issued digital currency is backed by 100% assets, and clearly listed the number of issued tokens and the assets behind them. These data are updated every day, but many investors still have doubts about USDT. This is doubtful. Before 2019, USDT had a negative premium of more than 10% every year due to rumors of insufficient funds. The asset transparency of USDT is poor. The current asset certificate given by its official website was issued by Freeh, Sporkin & Sullivan LLP (FSS) in 2018.
USDC: USDC is issued by regulated and licensed financial institutions with full reserves equivalent to legal tender. Collateral funds are deposited in independent bank accounts that are monitored and audited by third parties. Issuers are required to regularly report their dollar reserve holdings, and Grant Thornton LLP publishes monthly reports on these reserve funds.
PAX: Paxos employs Withum to verify its accounts at the end of each month to certify that the supply of Paxos Standard tokens is aligned with USD holdings in U.S. bank reserve accounts held and managed by Paxos. The same is true for BUSD and HUSD.
TUSD: TUSD uses Armanino's blockchain guarantee platform TrustExplorer, which can check the issued TUSD and the reserve funds behind it in real time, and can generate asset certificates in real time. Armanino is a top 25 independent accounting and business consulting firm in the United States.
DAI: The Maker protocol is built on the Ethereum network, and assets can be queried in the blockchain browser. From 2017 to 2019, MakerDAO's core code was audited by Trail of Bits, Whitehat Group, Bok Consulting, and PeckShield.
In terms of asset transparency, TUSD’s method of providing a real-time reserve dashboard and generating asset certificates in real time is recommended; other compliant off-chain mortgage-type stablecoins are provided by a third-party organization once a month. . Although Tether also updates its balance sheet every day, no authority can prove the authenticity, and it has been almost two years since Tether last provided proof of assets. MakerDAO's code has been audited by multiple institutions, and its stablecoin system has been operating normally for nearly 3 years.
4. Token distribution
image description
Source: MYKEY, DeBank
USDT, USDC, PAX, BUSD, TUSD, HUSD, DAI, and GUSD account for 22.49%, 45.21%, 69.58%, 91%, 34.91%, 99.15%, and 30.31% of the top ten addresses in the Ethereum network. , 87.69%.
image description
Source: MYKEY, etherscan
In general, the larger the circulation of stablecoins, the more addresses they hold, and the proportion of the top ten addresses is smaller, and the holdings of tokens are more dispersed. The on-chain collateralized stablecoin DAI accounts for a lower proportion of the top ten currency holding addresses than expected, and there is no centralized holding by large households, and more are distributed in DeFi applications on Ethereum. The most concentrated currency holding is HUSD, and the largest address holds 89.9% of the currency. This address is owned by Huobi.
5. Market performance
From 2016 to 2018, due to the crisis of trust, USDT had a negative premium of about 10% every year, and it lasted for 1-2 months. The situation has only improved in the last 1-2 years, and the increase in demand for USDT has also improved the situation. Almost all exchanges support USDT, and USDT is being used more and more in DeFi. It can be seen that there are fewer and fewer USDT price fluctuations, and USDT/USD has hardly seen a positive/negative premium of more than 10% in the past year.
image description
Among stablecoins, DAI is more volatile, and its price is usually above $1. For stablecoins, too high a currency price is also considered a flaw. For example, during the sharp drop on 3.12, if there were outstanding debts in MakerDAO but did not hold DAI, it would be necessary to pay a price much higher than $1 to buy DAI from the market to repay the debt.
Summarize
secondary title
3. Views of guests
3. Views of guests
The guest invited in this issue is Mable from Multicoin Capital. The following are the observations and comments made by Mable.
Last week, we ran a poll on WeChat and Twitter respectively. The results of the polls were different for the same question, which can reflect the judgment of different groups of people on the flow of capital:
Twitter results
WeChat result
This vote reflects the difference in the perception of stablecoins between the East and the West, which is also consistent with some of my observations over the past period of time:
1. For the expectation of Ethereum 2.0, overseas communities are more optimistic than domestic communities. Although various ecological participants such as validator services and mining pools agree that Ethereum 2.0 is at least two years away, it is still Many CT (Crypto Twitter) community members are more willing to hold Ethereum and Bitcoin and believe in their long-term value accumulation;
2. Compared with overseas, the domestic demand experience for cross-border payment is stronger, so they are more willing to keep the profits obtained in the stable currency;
3. Overseas, since last year, some companies that have been engaged in stablecoin centralized clearing houses have begun to deploy, which further proves that the overseas sensitivity of stablecoins is a step behind that of China and Asia: FTX’s stablecoin swap tool is quite sufficient, and it will be sooner. At some time, Binance has also launched a lot of trading pairs between stablecoins (although some liquidity may be relatively weak, but the operation idea is in this direction). For the centralized clearing house, the profit it needs to charge to maintain its operation cannot cope with the rapidly compressed profit margin of this track;
