The top stablecoin by market capitalization is now worth $163.7 billion after the stablecoin economy was worth nearly $200 billion last week, according to statistics on Friday, May 13. Of course, the failure of climax terrausd (UST) cost the stablecoin economy billions of dollars, and Binance’s stablecoin BUSD recently entered the top 10 in crypto market cap. Just as it has wreaked havoc in the cryptoeconomy, Terra’s recent downfall has led to a dramatic shift in the stablecoin ecosystem.
The Big Shift in the Stablecoin Economy
Just a week ago, the stablecoin economy was very close to breaking the $200 billion mark, but Terra’s recent debacle changed all that. Terra’s once-stable token, terrausd (UST), was the third-largest stablecoin in existence until it lost $1 parity. Tokens that are supposed to be pegged to the value of the U.S. dollar are now trading below $0.20 per unit. Nonetheless, the market valuation makes it the sixth largest market cap for coingecko.com”Stablecoins by Market Cap” list.
None of the top 10 stablecoins by market cap saw growth last month. USD/USD Down 0% over the past 30 days, while all other top stablecoins posted 30-day losses. BUSD is now the third-largest stablecoin token today with a market cap of $17.3 billion, and BUSD has also entered the top 10 cryptocurrencies by market cap, ranking ninth out of over 13,000 currencies.
Makerdao’s DAI token It is now the 4th largest stablecoin by market cap, at $6 billion today. Makerdao’s native token MKR In the past 24 hours, its value has risen by 15% due to some influence from UST. In fact, most of the stablecoins that managed to stay stable and benefited from the UST crash.
While some argue that “more regulatory frameworks” around fiat currency pegs are needed, some argue that decentralized stablecoins are still needed
Jeremy Allaire, CEO of Circle Financial, May 12, 2022 tweet: “USDC/USDT is the transaction of the day. Pursue quality. ” Circle Executive Appeared On CNBC’s “Squawk Box,” noting the need for “more regulatory frameworks around stablecoins.” Since Terra’s downfall, many have been closely watching the performance of so-called decentralized and algorithmic stablecoins.
Despite the recent Terra UST carnage, many still believe that decentralized and algorithmic stablecoins are in high demand from centralized giants.Founder of Avalanche (AVAX) Emin Gun Sirer It is believed that the crypto ecosystem needs a decentralized stablecoin.
Gün Sirer a day before LUNA falls below one cent said: “Even fully collateralized fiat stablecoins are decoupled. Even some weak [algorithmic] Stablecoins have recovered. ” AVAX founder also statement He “always said that [algorithmic] The stables were affected by a destabilizing bank run. Despite the risk of banking operations, Gün Sirer explained that the industry still needs decentralized stablecoins.
“We need a decentralized stablecoin,” Gün Sirer detailed. “Fiat-backed stables are subject to legal seizure and capture. A decentralized economy requires a decentralized stablecoin whose backing storage cannot be frozen or confiscated.”
What do you think of this week’s stablecoin economic reshuffle? Let us know what you think about this topic in the comments section below.
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