Recently, Messari analyst Ryan Watkins tweeted that
In the coming weeks, USDT’s share of stablecoin supply on Ether is likely to fall below 50% for the first time. USDC is rapidly becoming the dominant stablecoin on Ether, in large part because of its growing role in DeFi.
Over 50% of USDC supply goes into smart contracts – equating to about $12.5 billion. While this percentage is not as high as DAI, USDC leads by a large margin in USD terms (DAI’s collateral also contains other assets) and is now the preferred stablecoin for DeFi.
The lending agreements MakerDAO, Compound and Aave are the largest consumers of USDC, holding approximately 23% of the USDC supply. the USDC in MakerDAO is primarily used to support DAI pegs through the Anchor Stabilization Module (Peg Stabilization Module). the USDC in Compound and Aave USDC is deposited as a deposit in the agreement for revenue.
Earlier Compound Labs announced the formation of a new company, Compound Treasury. through a partnership with Fireblocks and Circle, Compound Treasury allows new banks and fintech companies to convert U.S. dollars into USDC. these USDC tokens will be deployed at a guaranteed interest rate of 4% on Compound. Compound Treasury gives dollar holders access to the USDC market available rate for the Compound protocol while abstracting the complexities associated with the protocol, including private key management, cryptocurrency-to-fiat currency conversion and interest rate volatility.
This trend is likely to continue with the launch of Compound Treasury and a series of initiatives around Circle’s DeFi API, which means more dollar liquidity will flow into DeFi.
While this will certainly dilute savers’ yields, doing so could boost the adoption of DeFi loan agreements. These agreements have been facing a shortage of dollar liquidity (the main reason interest rates have been so high).
As DeFi continues to grow, the question that is now starting to arise is how much it will continue to rely on centralized stablecoins.
Centralized stablecoins have been a great way to bring liquidity to DeFi and avoid volatility issues, but not a long-term solution.
DAI gives us hope in solving this problem, but it only has an 8% market share. Ironically, though, the Peg Stabilization Module (PSM), on which DAI relies for stability, is also increasingly dependent on USDC.
There is still no decentralized stablecoin project that has been as successful as MakerDAO, but there are a large number of people exploring decentralized stablecoin designs (right-hand category in the chart below) to find alternative solutions. The most interesting proposition in this group of explorations is the complete elimination of the reliance on the US dollar.
Regardless, decentralized stable coins, represented by DAI, are still one of the very important roots that put DeFi on the right path.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/messari-analyst-ryan-watkins-udsc-has-become-defis-stablecoin-of-choice/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.