Ethereum blockchain platform hosts a variety of coins. It is one of the most popular blockchain networks after Bitcoin. In recent news, USDC (US Dollar Coin) has taken over USDT in terms of supply. USDT and USDC are both stablecoins. USDT is also known as Tether and has been around for quite some time. To understand the nuances of this market event, one must first understand what exactly stablecoins are.
What are stablecoins?
Stablecoins are more like a category of cryptocurrencies that are more secure than other cryptocurrencies. This is because they are backed by reserve assets. Reserve assets include official currencies of countries, Gold, etc. Thus, stablecoins are not that volatile and can be processed instantaneously. Apart from that, there is also the upside of privacy when one deals in stablecoins.
On Ethereum, the current value of USDC is around 40 billion dollars. On the other hand, USDT’s value is somewhere around 39 billion dollars. It’s clear that USDC has overtaken USDT, which had been dominating the Ethereum blockchain network since its inception. This overtaking is akin to Ethereum taking over Bitcoin in terms of significance.
One theory behind this sudden overtaking is the rise of DeFi. Most USDT coins were used in centralized dealings. On the other hand, USDCs are often used in DeFi dealings. Since last year, decentralization has been gaining momentum among people. With the launch of the metaverse and various DeFi projects, it is clear that market trends will favor decentralization in the coming future. Maybe, that is why USDC has overtaken USDT on Ethereum.