By | January 12, 2022


The second factor most individuals do after getting into the world of blockchain, after shopping for BTC or ETH, is getting some Tether or USDC. As a bridge between the true world and Net 3.0, stablecoins play an extremely essential position within the functioning of the blockchain.

In accordance with Footprint Analytics, USDC, a US greenback stablecoin, surpassed $42 billion of issuance in December, rating second by market map behind USDT (Tether) with $78.4 billion. The decentralized stablecoin UST additionally surpassed $10 billion in market cap in the identical month.

Footprint Analytics – Market Cap of USDT, USDC & UST

Together with the dramatic growth of the stablecoin market, many international locations have observed dangers and performed research on attainable rules. On this article, we’ll assessment what occurred to stablecoins in 2021, specializing in the 6 most essential occasions.

1. Algorithmic Stablecoins ESD and FRAX Break Into High 10

Information from Footprint Analytics knowledge reveals that algorithmic stablecoin ESD rose from $120 million to $440 million, or 266.7%, in January, whereas FRAX rose 351.6% to $140 million. They’re now the ninth and tenth greatest stablecoins by market cap.

Footprint Analytics –  Market Cap of ESD & FRAX

Algorithmic Stablecoin ESD, generally known as Empty Set Dolla, is an artificial asset issued by Empty Set in 2020 and is a decentralized algorithmic stablecoin anchored to the US greenback. FRAX is a stablecoin protocol with a hybrid algorithm, issued by FRAX in 2020.

2. Algorithmic Stablecoin Fei Protocol Publicizes Shutdown of Burn Facility

In April, the worth of ETH fell under $2,000 similtaneously the worth of the algorithmic stablecoin FEI fell under $0.9. Fei Protocol ought to have mechanically activated its burn facility to destroy Fei, which might wipe out all consumer funds. As a way to defend the coin from being de-anchored, the undertaking overruled the protocol’s settings and disabled the burn facility.

Though such motion additionally protects customers’ property,  FEI’s disobeying the unique guidelines results in plummeting fame of itself, even with the monetary help of well-known establishments akin to Coinbase. Based mostly on Footprint Analytics knowledge, we will see a whole lot of hundreds of thousands of {dollars} flowing out and FEI’s market cap falling off a cliff.

Footprint Analytics – Market Cap of FEI

3. Euro and Different Fiats Get Crypto Pegs

In 2021, the variety of stablecoins anchored by fiat currencies aside from USD, akin to EUR, KRW, and JPY step by step elevated.

Among the many many non-dollar-anchored stablecoins, EURS and SEUR, that are anchored to the euro, have the identical value, adopted by KRT which is the Korean Received stablecoin. The Japanese yen stablecoin, JYPC, is a comparatively mediocre performer.

Footprint Analytics – Market Cap of Stablecoins aside from the pegged U.S.

El Salvador additionally deliberate to launch a government-issued native stablecoin by the top of 2021 however didn’t launch any additional information. As an alternative, it adopted Bitcoin as authorized tender in September.

4. Stablecoin Initiatives Endure Lightning Mortgage Assaults

Because the stablecoin market expanded, so did the variety of assaults it confronted, primarily from flash mortgage assaults .

  • In June, SafeDollar, a stablecoin undertaking deployed on Polygon, was attacked and the worth of the issued stablecoin, SDO, briefly went to zero. It has since recovered, however has not returned to its $1 anchor worth.
  • In August, WUSD, the stablecoin of Wault Finance, a DeFi platform deployed on BSC, suffered a flash mortgage assault and misplaced $800,000. WUSD’s value fell under $1.
  • In November, OUSD, a stablecoin issued by Origin Protocol, suffered a flash mortgage assault, shedding $2.25 million in DAI and $1 million in ETH.
Footprint Analytics – Value of OUSD, WUSD & SDO

5. International locations Launch Regulatory Efforts

In 2021, the whole challenge variety of stablecoins issued on Ethereum exceeded 100 billion, resulting in some international locations wanting into rules.

United States

  • October:  The U.S. SEC gained a bonus within the U.S. company debate on the best way to regulate stablecoins, and promising rights to control stablecoins.
  • November:  The U.S. The Monetary Stability Oversight Council issued a report on stablecoins and urged Congress to enact laws.
  • December:  The U.S. The Home Monetary Providers Committee held hearings on stablecoin regulation.

South Korea

    • November: Shinhan Financial institution stated it was testing the issuance of a stablecoin for the Korean received primarily based on the Hedera Hashgraph blockchain.
    • November: The Korea Monetary Providers Fee (KFSC) has issued a report on restrictions on token issuance.

Europe

  • November: The European Central Financial institution expanded its PISA framework to cowl digital currencies and stablecoins.
  • December: Japan’s Monetary Providers Company stated it will impose new restrictions on stablecoin issuance in 2022.

6. 2021’s Finest Managed Stablecoin Venture: Terra

Whereas the stablecoin market expanded quickly in 2021, no undertaking stood out final 12 months as a lot as Terra, which we lined in a earlier article.

Terra’s TVL peaked for the 12 months 2021 at $21.09 billion on Dec. 27, up 62.9x from $330 million on Jan. 1. The value of its native token, LUNA, additionally elevated 306.3x to a yearly excessive of $199.78.

Footprint Analytics – TVL of Terra

Terra additionally launched UST, a USD stablecoin with a market cap above $10 billion, and the KRT, a Korean Received stablecoin.

Conclusion

In 2021, over 20 new stablecoins have been launched, the best quantity ever. Moreover, due to the fixed development of stablecoin transactions in 2021,  the elevated demand for cross-border funds and the worth preservation operate that stablecoins have, Footprint believes that stablecoins will proceed to develop their position as a cryptocurrency bridge in 2022.

Moreover, traders and crypto fanatics can have extra choices outdoors of pegging their crypto to USD, whereas some stablecoins, like Tether, will seemingly really feel the warmth of regulators.

Advantages for CryptoSlate Readers

From 11 to 25 January 2022, click on this hyperlink on CryptoSlate to get a free 7-day trial of Footprint Analytics! New customers solely!

Date & Creator: Jan twelfth 2022,  [email protected]

Information supply: Stablecoins Dashboard

This text is a part of our 12 months in Evaluation sequence.

What’s Footprint Analytics?

Footprint Analytics is an all-in-one evaluation platform to visualise blockchain knowledge and uncover insights. It cleans and integrates on-chain knowledge so customers of any expertise stage can shortly begin researching tokens, initiatives and protocols. With over a thousand dashboard templates plus a drag-and-drop interface, anybody can construct their very own personalized charts in minutes. Uncover blockchain knowledge and make investments smarter with Footprint.

CryptoSlate E-newsletter

That includes a abstract of crucial every day tales on the earth of crypto, DeFi, NFTs and extra.

Get an edge on the cryptoasset market

Entry extra crypto insights and context in each article as a paid member of CryptoSlate Edge.

On-chain evaluation

Value snapshots

Extra context

Be a part of now for $19/month Discover all advantages

Leave a Reply

Your email address will not be published.