Solana Bleeds $1.8B in USDC—Stablecoin Exodus Shakes Network
Solana's stablecoin reserves just took a brutal hit—$1.8 billion in USDC vanished faster than a hedge fund's ethics. The sudden outflow leaves the network scrambling as liquidity evaporates.
What's behind the flight? Market jitters, yield-chasing whales, or just another Tuesday in crypto? One thing's clear: when stablecoins bolt, turbulence follows.
Remember folks—in decentralized finance, the only 'stable' thing is the irony.
Source: Blockworks Research
“[Y]ea this chart looks a lot better than the SOL price chart lol,” Lulo co-founder Jesse Brauner said when I asked him about the stablecoin supply dip.
In any event, the stablecoin exodus has been led by USDC, which saw its market cap on Solana shrink by some $1.8 billion in May, according to Blockworks Research analyst Carlos Gonzalez Campo. Perena founder Anna Yuan speculated that the sudden drop in supply could be funds shorting the dollar in a topsy-turvy macro environment.
Non-USDC stables actually grew last month, notably including PayPal’s PYUSD, which saw its supply grow 48%.
PYUSD is one of several newer stablecoins vying for a piece of USDC’s 70% market share on Solana. It’s joined by USDG — a Paxos-issued stable that pledges to share revenue with its network partners, which include Robinhood and Kraken — and USX, a forthcoming basis-trade token that its developer company dubbed “Solana’s stablecoin.”
I have speculated previously that Solana may look to drive adoption on non-USDC stablecoins, since a significant portion of Circle’s revenue goes to Coinbase, which is possibly building Solana’s chief competitor in Base. On a permissionless network, however, disincentivizing usage of a product that users want is pretty difficult.
Gonzalez Campo noted how alternative stablecoin growth strategies have so far mainly revolved around shelling out incentives for users, but paying for adoption is ultimately unsustainable.
The analyst added he’d like to see a B2B model where upstart stablecoins like USDG share revenue with DeFi protocols to create a vested interest in supply growth.
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