The current fuss in the decentralized finance (DeFi) industry has apparently attracted much attention in the cryptocurrency market that almost everyone arguably cares less about the activities of other markets, especially stablecoin. While traders flock to DeFi for yield farming, the stablecoin market cap quietly garnered millions of dollars every single day for two months.
Stablecoin market cap added $100 daily for 2 months
Following a Thursday data shared by the co-founder of CoinMetrics, Nic Carter, popular stablecoins such as Paxos Standard Token (PAX), Binance USD (BUSD), Tether (USDT), USD Coin (USDC), Dai (DAI), and more, gained a massive increase in their current supply. The daily increase, which has lasted for nearly two months, is valued at about $100 million.
In his tweet, Carter related the rapidly growing stablecoin market cap to the boom in the DeFi sector, as many protocols are sucking up stablecoins to stay ahead of what seems to be a liquidity competition. Precisely, the co-founder of CoinMetrics said:
“Everyone got so excited about DeFi no one pointed out that stablecoins have been adding $100m/day since mid-July. […] DeFi yields/interest rates are clearly a vacuum sucking in a lot of stablecoins.”
DeFi projects are shooting up Stablecoin market cap
One can predict that one factor contributing to the growing stablecoin market cap is the rise in DeFi protocols. Notably, most of these protocols use stablecoins amongst other tokens for their liquidity pools. As demand for tokens in liquidity pools continues to rise, with more protocol launch, a lot more of these stablecoins will be locked up accordingly.
At the moment, the US dollar-backed stablecoin, Tether continues to hold the lion share of the market, about 80 percent dominance. Its market cap sits around $13.7 billion, which is about a 50 percent increase from the $9.2 billion recorded on July 15. USDT’s trading volume has also increased to $54 billion presently, according to Coinmarketcap.