Stablecoin giant and crypto’s money-printing machine Tether has not issued a single USDT on the Ethereum network in the last 50 days as other stable assets gain ground in the market.
According to recent data, the last time USDT was minted on Ethereum was on May 31st, making it the longest time in history that the asset has not been issued on the network. The total value of minted ERC20 USDT now stands at $28.9 billion.
Tether (USDT) Minted. Source: DeBank
One major reason for the sudden halt in the minting of new USDT on Ethereum could be low demand due to high fees that users pay when interacting with the smart contract network. Although the leading stablecoin is issued on several blockchains including Omni and Binance Smart Chain (BSC), Tron boasts considerably lower fees.
In April, Tron dethroned Ethereum as the dominant chain for USDT. At the time of writing, Justin Sun’s blockchain child houses over 31.9 billion minted USDT of the 62.3 billion coins in circulation.
Meanwhile, as USDT is losing its foothold in the Ethereum ecosystem, other stablecoins are experiencing tremendous growth. The USD coin (USDC), for instance, has been gaining traction since the start of the year despite high gas costs.
Data shows that USDC has recorded over 1,800% growth in 2021 alone as the circulating supply of the coin increased from 1.3 billion to 25.7 billion in the last seven months. This is just 3 billion shy of the amount of USDT on Ethereum.
Analysts believe that the total amount of ERC20 USDC will catch up and possibly surpass that of USDT sooner rather than later. A Messari report in late June revealed that USDC has been seeing a lot of interest, especially from DeFi users, and the increasing demand for the stablecoin could position it as a market leader on the Ethereum blockchain.
The report further suggested Tether’s share of the stablecoin supply on Ethereum will likely dip below 50% for the time, increasing USDC’s chance to take dominance.
Although USDT is on the verge of losing its position as the largest stablecoin on Ethereum after seven years, Tether’s Chief Technology Officer (CTO) Paolo Ardoino believes the competition is healthy for the industry.
In a series of tweets yesterday, Ardoino noted that he is baffled whenever he reads reports that say “competitors are taking market cap from Tether.”
“Everyone takes from the king, not from the smallest. Duh… (but click-baiting is more important). Competition and diversification are key for success in any industry,” he wrote.
Furthermore, the CTO added that everyone at Tether is not only proud of the achievements but also flattered because the idea which they created in 2014 has turned into a competitive market. According to him, a bigger representation of stablecoins makes it easier to achieve fairer regulations.
“Believe it or not but ‘Let everyone grow so that the sum of all voices will be louder.’ is what will make stablecoin industry much more solid in the long run. So yeah. We don’t mind seeing growth. We welcome everyone. We just care that the game is fair and equal,” Ardoino concluded.
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