The Cardano ecosystem is expanding its range of stablecoins, offering users a variety of options. Among these are the algorithmic overcollateralized stablecoin DJED, and two synthetic stablecoins: iUSD from Indigo and MyUSD from Mynth. Additionally, there’s the USD-backed stablecoin USDM from Moneta (formerly Mehen). Another USD-backed stablecoin, USDA, developed by Encryptus and Emurgo, is expected to launch this year. While USDT and USDC are not natively minted on Cardano, they can still be utilized through the Wanchain Bridge, which is celebrating its first anniversary on Cardano. This article delves deeper into the stablecoins available within the Cardano ecosystem.
Stablecoins in the Cardano Ecosystem
The DeFi ecosystem is still in its infancy, having begun development during the bear market post-2021. It has yet to experience a bull market, which typically brings a surge of new users.
The first stablecoin introduced was the synthetic iUSD from Indigo, launched in November 2022. The latest addition is MyUSD from Mynth, which debuted in December 2023.
The history of stablecoins on Cardano spans less than two years.
Below is a table providing an overview of all stablecoins, including their creation dates, current supply, number of holders (by accounts), the total number of transactions, and the number of transactions in selected epochs (425, 450, 475, and 500). The period of 25 epochs is approximately four months.
In terms of the number of holders, total transactions, and supply, DJED is the most successful stablecoin in the Cardano ecosystem, followed by iUSD. This is likely because these stablecoins have been around the longest.
The only USD-backed stablecoin so far, USDM, has performed impressively since its launch in March 2024.
USDC and USDT, which are bridged via the Wanchain Bridge, have also gained users’ trust. This bridge is currently the only decentralized and time-tested option for transferring stablecoins and other assets to the Cardano ecosystem.
USDC and USDT are used almost equally by users, though USDC has a slight edge over USDT. If you combined the statistics of both bridged stablecoins, they would be comparable to MyUSD. In terms of total transactions, they would even surpass USDM, but the launch date should be considered.
The total supply of stablecoins in the Cardano ecosystem is valued at 31.14 million USD. These stablecoins are held by 2,283 users, who have collectively made 1,462,993 transactions. The number of stablecoin transactions continues to increase. On average, during the entire existence of stablecoins on Cardano, roughly 2,000 stablecoin transactions are processed daily. In epoch 500, it was roughly 400 stablecoin transactions per day.
Let’s take a closer look at individual projects.
USD-backed Stablecoin USDM
USDM’s popularity is on the rise. Since its launch, both the number of transactions and users have been steadily increasing. It’s anticipated that USD-backed stablecoins natively minted on Cardano will be viewed as the most secure by users. Current statistics support this expectation.
Synthetic Stablecoins iUSD and MyUSD
USD-backed stablecoins have a strong track record of maintaining their USD peg. Other types of stablecoins face more challenges in this regard and may experience slight de-pegging, especially during market turbulence.
Synthetic assets like iUSD and MyUSD are performing very well.
Despite the high competition within the Cardano ecosystem, the number of iUSD users continues to grow. Transaction levels have remained relatively stable, with a slight decrease likely due to market negativity and the summer holiday season.
MyUSD is a new project that will need to earn users’ trust. It was launched about three months before USDM. Despite having the lowest supply, MyUSD recorded the highest number of transactions in epochs 475 and 500.
Algorithmic Stablecoin DJED
DJED maintains a stable user base, though the number of transactions is slightly declining, likely due to rising competition. The DJED reserve holds over 35 million ADA, enabling the minting of approximately 12 million DJED. Currently, with a reserve ratio of 410%, it is possible to mint both DJED and SHEN tokens.
USDC and USDT bridged via Wanchain
There have been extensive discussions within the Cardano ecosystem about why Circle and Tether have not minted USDC and USDT on Cardano. Nevertheless, these stablecoins have entered the ecosystem via the Wanchain Bridge.
If USDC and USDT were natively minted on Cardano, they would likely become the preferred choice for users. The Wanchain Bridge team recently celebrated the first anniversary of its launch on Cardano, and the bridged stablecoins USDC and USDT are performing well. The longer the Wanchain Bridge runs, the more people will trust the transferred assets.
USDC holds a slight edge over USDT, nearing the 1 million USDC mark, while USDT is at about half that amount.
Despite the difference in supply, the number of transactions is relatively even. In epoch 500, both USDC and USDT recorded 170 transactions each, totaling 340 transactions. This surpasses the number of transactions for USDM and is only slightly less than iUSD.
Stablecoin Market
According to VISA, which sources data from Allium, around 900K users send stablecoin transactions daily. This translates to approximately 11 transactions per second (TPS).
USDT is outperforming USDC, while other stablecoins hold a smaller market share. Stablecoins are predominantly used on Binance Smart Chain (BSC) and Tron.
Of the approximately 25 million active addresses per month, 11 million are on Tron and 9 million on BSC. Polygon has 2.3 million active addresses, while Ethereum and Solana each have 1.7 million.
If you convert this data to the number of daily users, there are approximately 360,000 on Tron, 300,000 on BSC, 75,000 on Polygon, and 55,000 on both Ethereum and Solana.
The entire blockchain industry processes around 10 TPS when it comes to stablecoins.
Stablecoin transactions thrive where transaction fees are low, such as on Tron, BSC, Polygon, and Solana. Ethereum, on the other hand, doesn’t perform as well in this regard, which is understandable. Users seek the most efficient solutions, expecting reliability, speed, and low fees from stablecoin transactions, viewing them as alternatives to traditional payment networks. However, expectations in the DeFi ecosystem might differ.
In terms of stablecoin supply, the Ethereum ecosystem leads with a 46% share. Tron follows with 36%, and BSC is in third place with 3%. It’s worth noting that despite BSC’s significantly lower stablecoin supply compared to Ethereum and Tron, it clearly leads in the number of transactions.
It’s important to note that low network fees can sometimes lead to falsified or manipulated statistics.
On Cardano, there are approximately 400 stablecoin transactions per day, which is quite low compared to Tron with 300,000 daily transactions, or Ethereum with 55,000. Ethereum is about 140 times better than Cardano.
Both Tron and Ethereum are older projects. Tron is particularly successful in Asia and has established itself as a payment system. Ethereum, on the other hand, excels as a DeFi platform. Currently, more stablecoin transactions are processed on Polygon, Ethereum’s L2, than on the main Ethereum blockchain. Ethereum also has several other L2 networks that are performing well.
As mentioned earlier, Cardano has not yet experienced a bull market, so it hasn’t built a strong user base. Hopefully, this will change in the upcoming bull market. By early 2025, the first L2s utilizing ZK cryptography might delivered in the Cardano ecosystem, potentially increasing the number of stablecoin transactions. However, the competition is fierce, and the Cardano ecosystem will certainly face challenges.
Another interesting comparison is with the Bitcoin ecosystem. In 2023, the Lightning Network processed roughly 2.5 TPS in routed transactions. This means that stablecoins processed about four times more transactions. This highlights the significant importance of stablecoins to the blockchain industry in terms of the number of users and transactions.
The entire blockchain industry is still in its infancy. VISA processes 757 million transactions per day (roughly 9000 TPS) and is just one of many players in the payments market. Transactions with stablecoins across all blockchains combined don’t even reach 1% of this volume yet. This means that the technology that will ultimately gain global prominence is still very much undecided.