A New Stage of the Stablecoin Ecosystem: Transition from Issuance to Distribution

Stablecoins have become an indispensable financial tool in the cryptocurrency space, with a total supply exceeding $240 billion and an annual on-chain transaction volume exceeding $7 trillion. However, there are some phenomena behind these numbers that deserve further investigation.

The Truth About the Stablecoin Market

• The issuer pays high fees to distributors to expand the market. For example, Circle paid $900 million to distributors like Coinbase in 2023, accounting for more than half of its revenue.

• Of the annual trading volume of 3.1 trillion dollars, 31% comes from the cyclical operations of MEV bots, with the real trading volume being far lower than the surface data.

• Among 150 million stablecoin wallets, 99% have a balance of less than $10,000. Meanwhile, just 20,000 mysterious wallets control $76 billion, accounting for 32% of the total supply.

• The explosive growth of stablecoins has concentrated in the recent 6 months. The trading volume of DeFi stablecoins surged from 100 billion to 600 billion, while meme coin trading generated 500 billion in volume.

The Transition from Issuance to Distribution

The dominance of stablecoins is shifting from issuers to distributors:

• Distributors control user relationships and experiences, determining the attention given to stablecoins.

• The issuer pays high fees to distributors for promotion and integration.

• Platforms like PayPal, Telegram, and Meta are actively engaging in stablecoin business.

• The new generation of stablecoins includes programmable features such as reconciliation capabilities and compliance rules.

On-chain stablecoin main use cases

1. Centralized Exchange ( CEX ):
   • Account for 27% of the total supply, 11% of the total trading volume
   • Mainly used for deposits and withdrawals, inter-exchange transfers, etc.

2. Decentralized Finance ( DeFi ):
   • Account for 11% of total supply, 21% of total trading volume
   • Mainly used for DEX, lending, CDP, etc.

3. MEV:
   • Account for 31% of the total trading volume
   • Mainly high-frequency arbitrage operations by robots

4. Unattributed Wallet:
   • Accounts for 54% of the total supply, 35% of the total trading volume
   • Including retail investors, unknown institutions, startups, etc.

Conclusion

The stablecoin ecosystem has entered a new phase, with more value flowing to application and infrastructure builders. The future financial world will be defined by the ecosystem formed around stablecoins, not just by the stablecoins themselves.