Try Quests to earn cryptoStablecoin Activity on Ethereum
Stablecoins
Stablecoins are cryptocurrencies that are pegged to the value of a specific asset, such as a fiat currency like the US dollar, or a commodity like gold. The goal of stablecoins is to provide a cryptocurrency that is less volatile than traditional cryptocurrencies like Bitcoin or Ethereum, which can fluctuate significantly in value.
There are several different types of stablecoins, including:
- Fiat-collateralized stablecoins, which are backed by a reserve of fiat currency held in a bank. The value of these stablecoins is tied to the value of the underlying fiat currency, so if the value of the fiat currency increases or decreases, the value of the stablecoin will also increase or decrease accordingly.
- Commodity-collateralized stablecoins, which are backed by a reserve of a physical commodity like gold or silver. The value of these stablecoins is tied to the value of the underlying commodity, so if the price of the commodity increases or decreases, the value of the stablecoin will also increase or decrease accordingly.
- Cryptocurrency-collateralized stablecoins, which are backed by a reserve of another cryptocurrency, such as Bitcoin or Ethereum. The value of these stablecoins is tied to the value of the underlying cryptocurrency, so if the price of the cryptocurrency increases or decreases, the value of the stablecoin will also increase or decrease accordingly.
- Non-collateralized stablecoins, also known as "seigniorage-style" stablecoins, do not have a reserve of assets backing them. Instead, these stablecoins are designed to maintain their value through algorithms that automatically adjust the supply of the stablecoin in response to changes in demand.
Stablecoins are often used as a means of storing value, as they are less volatile than traditional cryptocurrencies and can be used to transfer value between exchanges, make payments, and perform other financial transactions.
Methodology
- Data collection: To create the dashboard, we use the Flipside Crypto data platform to gather data from the Ethereum blockchain about the stablecoins ('USDC', 'USDT', 'BUSD', 'MIM', 'FRAX', 'DAI', 'USDP', 'TUSD', 'GUSD', 'FEI', 'SUSD') in question. This data includes information about the number and value of transactions involving these stablecoins and the addresses involved in each transaction.
- Data cleaning and organization: We then clean and organize the data to make it easy to understand and analyze. This may involve filtering out irrelevant data, grouping the data by time period, or calculating derived metrics.
- Data visualization: We use Flipside crypto to create graphs, charts, and other visualizations that help to illustrate the activity of the stablecoins on Ethereum.
- Data analysis and interpretation: We use the metrics and visualizations we have created to identify trends, patterns, and anomalies in the activity of the stablecoins. We can also use the data to compare the performance of different stablecoins and to identify the most active users or addresses.
Ethereum Stablecoin Transfer Activity
Analysis
In 2022, the number of stablecoin users on Ethereum saw a decline for most of the year, but the activity of these users increased significantly as 8 million new wallets transferred stablecoins. Amongst these stablecoins, USDT and USDC were the most popular choices due to their reputation for stability. In total, over 6 trillion stablecoins were transferred on the Ethereum platform, indicating a growing trend in their usage. These trends suggest that while the overall number of stablecoin users may be decreasing, those who are using them are becoming more active in terms of transfers and that stablecoins are becoming increasingly popular and widely used on the Ethereum platform.
Ethereum Stablecoin Swap Activity
Analysis
The swap volume of stablecoins on Ethereum has decreased over the course of 2022, dropping from 20 billion per week to around 3 billion per week. Despite this decrease, a total of 1.19 million wallets transferred approximately half a trillion stablecoins on the platform in 2022. The number of stablecoin swappers on Ethereum has consistently increased throughout the year, indicating that stablecoins are becoming increasingly popular and widely used on the platform. It is possible that the decrease in swap volume is due to other factors rather than a decrease in overall demand for stablecoins.
Ethereum Stablecoin Transfer Sizes
Analysis
Stablecoin transfer volume is primarily driven by large transfers, with 91% of activity coming from transfers larger than $100,000. In contrast, only 43% of stablecoin transactions on Ethereum are below $1,000, and transfers under $10,000 make up less than 2% of transfer volume. This suggests that stablecoins are being used primarily for large financial transactions, rather than for smaller everyday purchases. However, a significant portion of stablecoin activity is still being driven by smaller transactions, indicating that they are also being used for everyday purchases or as a means of storing value.
Conclusion
In 2022, stablecoins on the Ethereum platform saw a decline in the overall number of users but an increase in activity as 8 million new wallets transferred stablecoins. The most popular stablecoins on Ethereum were USDT and USDC due to their reputation for stability. In total, over 6 trillion stablecoins were transferred on the platform, indicating a growing trend in their usage. The swap volume of stablecoins on Ethereum decreased over the year, but the number of stablecoin swappers consistently increased. Most stablecoin activity was driven by large transfers, with 91% of activity coming from transfers over $100,000 and 43% of stablecoin transactions below $1,000. However, smaller transfers under $10,000 made up less than 2% of transfer volume. Overall, this data suggests that stablecoins are becoming increasingly popular and widely used on the Ethereum platform, particularly for large financial transactions.