- USDC has gained significant ground over Tether’s USDC since the beginning of the year.
- The USDC is up an impressive 1,820% since January, while Tether records only a 200% gain.
- The disparity in earnings is more apparent on the net with the USDT supply drop and the USDC rise.
- The proposed launch of Compound Treasury and Coinbase’s announcement to offer 4% interest in the USDC are indicators of Future dominance of the USDC.
Stablecoins have become an integral part of the cryptocurrency space due to the utility they offer to users. Its indispensable nature has resulted in its meteoric rise in popularity that has led to its combined market capitalization to exceed $ 112 billion.
At the top of the stablecoin ladder are Tether and USDC, battling each other for supremacy. Although Tether ranks as the largest of the duo, recent data suggests that USDC is turning the tide, as it outperforms Tether in terms of growth trajectory in Ethereum and DeFi overall.
At the beginning of 2021, there was only $ 1.3 billion in USDC in circulation. Fast forward six months to July and that figure has risen to $ 25.15 billion. This staggering jump in market capitalization means a growth rate of over 1,000%.
By tracking stablecoin growth, an investigation by Messari, a cryptanalysis firm revealed that USDC growth has taken away a large chunk of USDT’s market share.
According to Ryan Watkins, a cryptocurrency expert, Tether is losing its grip on the Ethereum stablecoin market and continues to predict that the “supply of Tether on Ethereum will drop below 50% for the first time.”
He notes that one of the main reasons for Tether’s decline is the result of the increasing adoption of USDC in DeFi.
It is relevant to note that DeFi lending protocols make up the majority of USDC users with Compound, MakerDAO and Aave owning up to 23% of the total supply.
Why is the USDC rising?
The rise to prominence of the USDC is one of the stories that has intrigued the cryptocurrency community. A large part of the rise to fame is due to the high-performance interests that users can earn by using USDC to interface with DeFi protocols.
This trend shows no signs of slowing down and may even get a boost with the launch of the Compound Treasury. Compound Treasury offers 4% interest in USDC for projects that are built around Circle’s DeFi API.
Another reason for the flurry of activity around USDC is the announcement by cryptocurrency exchange Coinbase that it would offer an impressive 4% APY on USDC.
On the other hand, high network fees have plagued Tether, making USDC a viable substitute for users.
On the other side
- Tether Trading Volumes Soar More $ 2.3 billion in the last month.
- This metric surpasses that of Ethereum by more than 2.5 times against stiff competition from other stablecoins.
USDC and USDT
USDC is a stablecoin that is pegged to the US dollar and works on multiple blockchains such as Stellar, Ethereum, and Solana, among others.
Launched in September 2018 and managed by Center, USDC has grown to have a market capitalization of more than $ 25 billion, making it the eighth largest cryptocurrency.
Tether’s market capitalization exceeds $ 60 billion, which places it among the top three largest cryptocurrencies. Tether is issued by Tether Limited, but it has been plagued with controversy as to whether it is backed by a US dollar or not.
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