Stablecoin dominance in the crypto markets is growing steadily, signaling the growing adoption of crypto payments. Most recently, Ethereum hit a major milestone and continues to dominate, while other chains, especially Tron, are catching up.
On Tuesday, March 25, Ethereum’s stablecoin market cap reached an all-time high of $132.4 billion. This includes over $75 billion in Tether and $39 billion in USDC, with smaller allocations for other stablecoins.
An increase in the stablecoin supply on the largest network suggests increased liquidity. It also signals more crypto usage for domestic and international payments, which can help the Ethereum network generate revenue. This revenue also directly impacts ETH supply, which changes dynamically with volumes.
What is more, stablecoin market caps are much more resilient to price swings, with their dominance typically rising during market downturns. However, long-term trends suggest that Ethereum’s dominance could be challenged.
Tron Takes on Ethereum in Stablecoins
The Ethereum stablecoin market cap grew from $80 billion in March 2024, representing a 59% increase in one year. However, its dominance has slowly decreased, as the total stablecoin market cap was $116 billion at the time.
At the time, Ethereum’s stablecoin dominance was at 68.9%, compared to the current level of 53.9%. Tron is the biggest gainer, currently controlling $64 billion in stablecoins and a 27% market share. Solana is a distant third, with 5%, and Binance Smart Chain (BSC) has a further 3%. Notably, USDT holds an overwhelming 98.5% share of all stablecoins on Tron.
Tron has been a key platform for stablecoin transfers for a while, especially in Asia. The platform has much lower fees than Ethereum and some of the lowest fees for USDT payments.
The partnership with Tether also helped Tron offer more user-friendly features, like “gas-free” payments. Specifically, in February this year, the chain started enabling users to pay for gas fees directly with USDT. This eliminates the need to hold TRX tokens for gas fees and makes transactions more user-friendly.
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