A New Phase in the Stablecoin Ecosystem: The Shift from Issuance to Distribution

Stablecoins have become an indispensable financial tool in the cryptocurrency space, with a total supply exceeding $240 billion and an annual on-chain transaction volume exceeding $7 trillion. However, the next stage of development for stablecoins will not only focus on issuance and liquidity but also involve sharing economic benefits with partners, the convenience of on-chain and off-chain integration, and the degree of utilization of programmable features.

Value Transfer from Issuer to Distributor

In the early stages, the value was primarily concentrated on the issuers. Issuers such as Tether and Circle achieved huge revenues through reserve income. However, as more issuers with similar capabilities enter the market, the importance of the issuers themselves gradually decreases.

Today, distributors are becoming the strategic high ground of the stablecoin ecosystem. These wallets, exchanges, and applications that integrate stablecoins control user relationships, shape user experiences, and determine which stablecoins gain attention. Circle’s recent IPO filing shows that it paid nearly $900 million to partners like Coinbase for the integration and promotion of USDC, exceeding half of its total revenue for 2023.

On-Chain Stablecoin Use Case Analysis

Stablecoins are currently mainly concentrated in three environments: centralized exchanges, DeFi protocols, and MEV. These three types of addresses account for 38% of the total supply of stablecoins and 63% of the total trading volume.

centralized exchange ( CEX )

• Share of total stablecoin supply: 27%
• Percentage of total trading volume in the past 30 days: 11%
• Reserve income: 3 billion USD

Since the low point in 2023, the supply of top CEXs has nearly doubled. The on-chain trading volume of CEXs mainly reflects activities such as user deposits and withdrawals, and inter-exchange transfers, rather than internal transactions.

Decentralized Finance ( DeFi )

• Share of total stablecoin supply: 11%
• Percentage of total trading volume over the past 30 days: 21%
• Reserve Income: 1.1 billion USD

In the past 6 months, the monthly trading volume of DeFi stablecoins has grown from around 100 billion USD to over 600 billion USD, mainly driven by the growth of DEX, lending markets, and CDPs. DEX accounts for a large share of the total trading volume, with the recent trading volume of memecoins surging to over 500 billion USD.

MEV miner/node validation

• Share of total stablecoin supply: <1%
• Percentage of total trading volume over the past 30 days: 31%

The high-frequency behavior of MEV bots leads to an excessively high proportion of on-chain transaction volume, often reusing the same funds. MEV transaction volume surges during trading peaks and fluctuates with the blockchain and applications countering MEV strategies.

Unattributed Wallet

• Share of total stablecoin supply: 54%
• Percentage of total trading volume in the past 30 days: 35%
• Reserve income: 5.6 billion USD

Unattributed wallets account for the vast majority of stablecoin supply and trading volume, including retail users, unidentified institutions, startups, and more. Although the number of wallets is enormous ( exceeding 150 million ), the majority have very small balances. Only 20,000 wallets with balances over $1 million hold $76 billion, accounting for 32% of the total supply.

Conclusion

The stablecoin ecosystem is entering a new phase, with more value flowing towards participants who build applications and infrastructure. With the improvement of regulatory frameworks and the surge of user-friendly applications, stablecoins are expected to experience exponential growth. The future financial world will be defined by the ecosystem formed around stablecoins, rather than the stablecoins themselves.