What is USDC ?

USD Coin is a digital stablecoin that was pegged to the United States dollar. USD Coin is managed by a consortium called Centre, which was founded by Circle and includes members from the cryptocurrency exchange Coinbase and Bitcoin mining company Bitmain, an investor in Circle. USDC has a variety of uses in the crypto marketplace but is commonly deployed in decentralized finance (DeFi) protocols and by traders.

Announcements

1. Binance, the world's largest crypto exchange, said on 5th September 2022 it will automatically convert user balances and new deposits of the stablecoins USD Coin, Pax Dollar and True USD into its own stablecoin, Binance USD, starting on 29th September 2022.
2. on 29th September 2022, Circle Internet Financial, the firm behind USD Coin (USDC), announced that it plans to make $USDC available on five additional blockchain ecosystems including Arbitrum, Cosmos, NEAR, Optimism, and Polkadot. $USDC intends to be available natively on Arbitrum One, NEAR, Optimism and Polkadot by the end of 2022, and is expected to go live in early 2023.

Methodology

Based on the above info, we have 2 important dates (5th September 2022 and 29th September 2022), So, I am going to split my analysis about USDC activity on Optimism network into 3 timespans as below:

1. 2 Weeks Prior to the Binance Announcement (22th August - 05 September)
2. After Binance Announcement and Before Conversation Start and also Before Circle Announcement (05 September - 29 September)
3. After All the Above Events …

1. First, I am going to check and convert USDC and USDT market cap over these timespans ==(using Coingecko data).==
2. Then, I am going to check USDC and also other stable-coins balances of wallets over time. ==(using flipside’s ethereum.core.ez_balance_deltas table)==
3. Then, I am going to check USDC transactions activity during these timespans (non-swap). ==(using flipside’s optimism.core.fact_event_logs table)==
4. Then, I am going to check USDC swap activity during these timespans. ==(using flipside’s optimism.core.fact_event_logs and optimism.sushi.ez_swaps and optimism.velodrome.ez_swaps tables)==
5. Then, I am going to compare the top popular destinations of USDC users during these timespans. ==(using flipside’s optimism.core.fact_event_logs and optimism.core.dim_labels and flipside_prod_db.crosschain.address_labels tables)==

• USDC contract address on Optimism: 0x7f5c764cbc14f9669b88837ca1490cca17c31607 (Decimals = 6)
• event_inputs:value from the event_logs table with the above contract address (USDC) gives us the actual volume of USDC engaged in the transactions.
• Only analysing data for Successful Transactions (tx_status = 'SUCCESS')
• Excluded the transactions with high weird volume (more than 100000000)

On the above charts, we can obviously see the decreasing market cap of USDC and on the other side, the increasing market cap of USDT during the same time span.

Also after 29th September (the start date of the conversation and also the Circle announcement), there is a sudden negative spike in the USDC market cap and the Binance action can be the main reason behind this event.

Wallets Balance

Market Cap Comparison

On the left above chart, we can see slight decrease in average USDC balance of users over time especially with a sudden high decrease after the 29th September.

On the right chart, we can see USDC balance of users is also decreasing lightly over time (21.99B on 22th August to 12.950B on 30th September). This amount has reached its lowest amount during the conversation day and after that.

On the above charts, we have seen the impressive impact of Binance announcement on the volume of transactions with USDC. as we see, after 29th September (After …) the volume of transactions with USDC has decreased dramatically compared to the other timespans.

However, on the other hand, the average number of transactions and also users after the conversation date has increased dramatically and this shows the high trust of these users to the USDC despite its delisting from Binance.

There is a quite high peak of transactions and also users between the announcement date and before the beginning of USDC conversation on Optimism.

USDC Transactions

USDC Swaps

Breakdown by Swap to and Swap From

Based on the above charts, there is no trace of annonucements impact on the USDC swap activity on Optimism and this can be very good news for Circle company and its coin.

In almost all days, the number of swaps to and swaps from USDC is equal to each other.

Top Popular Destinations

After the Binance announcement, Uniswap (by TX and Users Count), AAVE V3 Pool (by Volume) were the most popular destination of USDC users.

So, the number of users who were interacting with Rubicon:Bathusdc token has decreased after announcement.

After conversation date and also the Circle announcement similar to the days before, Uniswap (by TX and Users count) and AAVE V3 Pool (by Volume) are still the top popular destination of USDC user.

Conclusion

Based on the above analysis:

• The market cap of USDC and also the users USDC balance has decreased dramatically after the Binance announcement and on the other hand USDT market cap and other stablecoins balance of users have increased after this announcement.
• There was not much impact of the USDC delisting from Binance in the behavior of users on the Optimism platform. We have seen decreasing volume of USDC transactions after the delisting date but on the other hand, the number of transactions and also users have increased dramatically even more than before delisting. The impact of USDC delisting was even lower on the Swap activity to the extent that we almost did not see any trace of impact of this announcement on Swaps activity.
• The Top destinations before and after the Announcement and also delisting date were almost similar and Uniswap and AAVE protocols were by far the most popular destinations for USDC users.
• Since Optimism is a fast, secure, and scalable L2 blockchain and utilizes Optimistic Rollup technology to scale the Ethereum PoS network and improve transaction throughput, this can result in significantly faster and lower cost USDC transactions (The proper reason behind Circle Announcement about Next Wave of USDC Support for Multi-chain Ecosystem including Optimism)

So, maybe now we can get the point of Circle CEO after the Binance Announcement: (Link) Below, we can see some conversations about this Binance’s action:

> Binance's move to automatically convert USDC and two other stablecoins may lead to more USDC flowing into the exchange, according to the CEO of Circle, which issues the coin. "Binance is trying to consolidate dollar liquidity w cash equivalent stables. That’s good for liquidity and market depth," said Circle CEO Jeremy Allaire on Twitter. Binance said yesterday it will convert balances and new deposits of USD Coin (USDC), Pax Dollar (USDP) and TrueUSD (TUSD) to its own stablecoin (BUSD) in a 1:1 ratio. Users will still be able to withdraw these coins at the same ratio from BUSD even after the auto-conversion (scheduled for Sept. 26) happens. "Binance is not ending support for USDC, and change will likely lead to more USDC flowing to Binance," Allaire said. Having consolidated dollar books will make it easier for trading core markets to move USDC to and from Binance, Allaire said. "Given how limited BUSD usage is outside of Binance, this will likely benefit USDC usage as the preferred cross CEX and DEX stablecoin rail. Unless Binance can convince all their competitors to get behind BUSD." Crypto exchange FTX effectively does the same thing, crediting USD, USDC, TUSD, USDP, BUSD and HUSD deposits with USD Stablecoins in a 1:1 ratio, Steven Zheng, from The Block Research's team, pointed out. "Binance’s move helps consolidate liquidity of stablecoin trading pairs on its exchange," he said. "This is beneficial to both users as they won’t have to trade against fragmented stablecoin liquidity as well as Binance who can bring more activity and eyes to its BUSD stablecoin.” TUSD said on Twitter it will cooperate with the Binance "ecosystem. "Binance will maintain multi-chain $TUSD deposit and withdrawal support on their exchange for all the following token standards," TUSD said. The move will ensure better safety for Binance customers, said Rich Teo, co-founder and CEO of Paxos Asia, the company that issued BUSD in partnership with Binance. "Unlike competing stablecoins, BUSD is regulated by NYDFS (New York State Department of Financial Services) which sets rules and monitors compliance with those rules," Teo said. "ONLY regulated stablecoins do this, setting us apart from stablecoins issued by companies operating with Money Transmitter Licenses (MTLs) that have no oversight of reserves or governance."

Discord: Ali3N#8546

Before the Binance announcement, Uniswap (by TX_Count), AAVE V3 Pool (by Volume) and Rubicon:Bathusdc token (By Users Count) were the most popular destination of USDC users.