Chain activity of stablecoins has increased by 800% in the last 12 months, according to market intelligence company TokenAnalyst.
This growth is not surprising, considering the overall growth of the stablecoin niche. The combined market capitalization of all stablecoins ranks third in size, behind Bitcoin ( BTC ) and Ether ( ETH ) and ahead of XRP ( XRP ).
Over the past year, $ 290 billion in stablecoins has moved on a chain; In March alone, USD 50.9 billion of value was transferred compared to USD 6.2 billion in April 2019.
Dai is the most DeFi
Despite the growth of the DeFi industry, more than half of chain activity involves centralized exchanges. In fact, the activity related to exchanges exceeds DeFi five to one.
Of the three stablecoins analyzed, Tether ( USDT ), USDC ( USDC ) and Dai ( Dai ) , the latter is by far the most “decentralized”; 88% of its chain activity qualifies as DeFi. This is because the Dai itself is built on a DeFi protocol. On the other hand, 62% of Tether's activity involves centralized exchanges.
The availability of a variety of stablecoins is useful for crypto investors, as it provides a “parking” mechanism to protect their wealth from market volatility. Cash collection is an alternative strategy, but with stablecoins, the investor does not need to exit and re-enter the world of cryptocurrencies, which can be cumbersome and incur additional costs.
Considering that the stablecoin Dai and the DeFi space are exhibiting fragility lately, some degree of centralization may not turn out so bad after all.