- US dollar stablecoin, Tether continues to dominate via its market capitalization.
- However, the USDC and Dai stablecoin outperform USDT in the DeFi market.
Aside from the regular trading of US dollar-backed stablecoins on the centralized exchanges, these cryptocurrencies have, in fact, gained prominence in the decentralized finance (DeFi) market. Although Tether (USDT) continues to trend as the largest stablecoin following its market capitalization, its demand for decentralized trading as otherwise, as other lower rivals claim massive dominance.
Tether dominance by market cap
To start with, the leading stablecoin Tether currently has a market capitalization nearing $16 billion, according to Coinmarketcap, a crypto price tracking platform. This emanates from the current circulating supply of 15,897,187,815 USDT. Overall, the stablecoin is ranked as the third-largest digital currency. USD Coin and Dai see a lower record in terms of the market capitalization.
As per Coinmarketcap, the USDC stablecoin sees a total market valuation of $2.7 billion to rank as the 12th largest digital currency, while the Dai stablecoin sees a total valuation of $915,991,239, ranking as the 25th largest digital currency. Regardless of these low records as compared to Tether, USDC and Dai stablecoin could still dominate as the largest stablecoins in the decentralized finance market.
USDC leads stablecoin demand in DeFi
According to recent data from Flipside, USDC and Dai are the largest stablecoins in the DeFi market. Flipside compiled the report after analyzing the top six decentralized finance protocols, which include Uniswap, Curve, Maker, Balancer, Compound, and Aave. The result showed that USDC and Dai are the most locked stablecoins in the decentralized market, respectively.
While commenting on the increased demand/use of the USDC in the DeFi market, Jeremy Allaire, the co-founder of Circle (the company behind the USD Coin stablecoin) noted that the success of the stablecoin in the decentralized market stemmed from their earlier works to establish relationships with DeFi projects and communities.
More so, the stablecoin preferred amongst institutional traders as it offers more safety of funds, given that it was created by the US registered financial companies – Coinbase and Circle.