Defi and Algorithmic Stablecoin Demand Grows in 2021 Despite Large Centralized Competitors

Bitcoin

On Wednesday, October 13, 2021, the market capitalization of all the stablecoins in existence is around $134 billion, which is 5.60% of the entire $2.4 trillion crypto economy. While centralized stablecoin projects dominate the pack of dollar-pegged tokens, a great number of decentralized stablecoins have been moving in on these centralized competitors. Algorithmic or defi-styled stablecoin market caps have accrued billions of dollars this past year.

While Tether and USD Coin Eclipse the Market, Algorithmic Defi Stablecoins Still Shine

Tether (USDT) is one of the oldest and the largest stablecoins by market cap today, while the second-largest stablecoin valuation belongs to usd coin (USDC). Data from Coingecko’s stablecoin-by-market-cap metrics indicates that on October 13, there’s $134 billion in stablecoin assets. A great majority of those funds belong to tether and usd coin as USDT has a market cap of around $70.9 billion and USDC commands $33.3 billion.

Despite controversial discussions concerning the backings of some of these large stablecoin markets, they are the market leaders when it comes to dollar-pegged tokens. Both USDT and USDC combined make up ​​77.61% of the $134 billion stablecoin economy that exists today. However, decentralized competitors that back their own stablecoins in a myriad of different ways, have started to see their market caps swell.

Defi and Algorithmic Stablecoin Demand Grows in 2021 Despite Large Centralized Competitors
Top stablecoins by market cap according to coingecko.com stats on October 13, 2021.

For instance, the stablecoin DAI has been the most popular decentralized stablecoin and the asset is backed by over-collateralization via the Makerdao project. The stablecoin DAI also commands the fourth-largest market valuation just under Binance’s BUSD stablecoin. DAI’s market cap on October 13, is $6.7 billion and the crypto asset has seen $343 million in 24-hour trade volume on Wednesday. DAI is considered an algorithmic stablecoin that is tied to the value of the U.S. dollar.

You Might Like

Terra USD, Magic Internet Money, Liquidity USD, FEI Rise Below Makerdao’s Algorithmic Stablecoin

Terra usd (UST) is also an algorithmic stablecoin and its market cap is below DAI’s with $2.7 billion today. UST is followed by another decentralized stablecoin called magic internet money (MIM) which holds a $1.5 billion market valuation on Wednesday. The most active trading platform today swapping MIM tokens is the decentralized exchange (dex) Trader Joe. Similar to other decentralized stablecoin projects, magic internet money is issued by users of the lending protocol abracadabra.money.

The ninth-largest stablecoin cap held by liquidity usd (LUSD) is around $658 million today and Uniswap V3 is the stablecoin’s most active exchange. LUSD is issued by the Liquity Protocol which is another decentralized finance (defi) lending protocol. There’s also the defi stablecoin project called Fei which issues a stablecoin called FEI, like the algorithmic stablecoin DAI. The market cap of FEI on Wednesday is $543 million and it commands $79 million in 24-hour trade volume.

The aforementioned decentralized or algorithmic stablecoins that are not backed by a company providing audits and are produced by the crypto community at large, represent 8.95% of today’s stablecoin market cap. That’s only $12 billion of the $134 billion worth of stablecoins in circulation today. For now and for quite some time, it is very probable that centralized competitors like USDC and USDT will not be displaced. However, many of these algorithmic or defi-styled stablecoins have become top contenders in the market and made their mark without corporate backing and little controversy.

What do you think about the stablecoin market today and the 8.95% of defi and algorithmic stablecoins making headway in the crypto economy in recent times? Let us know what you think about this subject in the comments section below.

Tags in this story
algorithmic, Algorithmic stablecoin, algorithmic Stablecoins, Binance’s BUSD, DAI, defi-styled stablecoins, FEI, Liquidity USD, Magic Internet Money, makerdao, MIM, Stablecoin Supply, stablecoin supply ratio, Stablecoins, Terra USD, Tether, USDC, USDT

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Read disclaimer

Articles You May Like

Where Is The Best Place For You To Retire?
How Hilma Wolitzer Came Back From Covid Tragedy To Publish Her First Book In 8 Years—At The Age Of 91
The Making Of Generation U & Why A New Model Of Retirement Advice Is Needed Now
Concierge Service Catering to Crypto Whales Sees 500% Increase in Clients Over the Last 6 Months 
Turkey Drains The Wholesale Silver Market

Leave a Reply

Your email address will not be published. Required fields are marked *