Stablecoins’ annual transfer volume surpassed the combined volumes of two giant payment systems, Visa and Mastercard, by 7.7%, reaching $27.6 trillion, but lost 13.5% of their total market share within the crypto market.
As per a report from CEX.io, the main factor behind the surge in stablecoin transactions was the use of trading bots on Solana and Base, which have become prominent networks for decentralized exchanges (DEX), lending protocols, and general decentralized finance (DeFI) platforms.
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That said, bots accounted for 70% of stablecoin transfer volume, with their dominance reaching 98% on these two networks. The exchange highlighted that while bot activity helps with arbitrage and gas fee coverage, it’s also problematic as malicious actors could use bots to front-run trades and articulate pump-and-dump schemes.
The supply of stablecoins grew by 59% throughout 2024, reaching 1% of the total U.S. dollar supply. More and more, stablecoins have been used for savings and remittances due to their cost efficiency compared to traditional payment methods. They can be used 24/7 and with lower fees than legacy systems, making them a more viable option.
Unsurprisingly, Tether (USDT) was the largest stablecoin by transfer volume, representing a whopping average of 79.7% of all stablecoin trading volume.
Ethereum and Tron Leading The Chart
The report also highlighted how Ethereum and Tron were the main sources of stablecoin adoption, accounting for over 83% of the market by Q4 of 2024. But their combined market share declined from 90% earlier in the year thanks to fierce competition from Solana and Aptos, as well as layer-2 solutions like Base and Arbitrum, chains that are still taking the crypto market by storm.
Ethereum’s stablecoin market cap grew by 65%, reaching an all-time high. This was partly driven by lower transaction fees following the Dencun upgrade in March, along with a post-election surge in crypto activity in the United States.
Yield-Bearing Stablecoins Dominated in 2024
Yield-bearing stablecoins like Ethena’s USDe were particularly successful in leading and fueling one of 2024’s hottest narratives. The report said the combined market cap of yield-bearing stablecoins grew by nearly 600% in 2024:
Yield-bearing stablecoins emerged as one of the hottest segments in this space, with its combined market cap surging by over 583% in 2024. This jump was primarily due to adoption of sUSDe, which became the dominant force in this sector, with its market cap increasing by more than 5,800% in a year.
