USDC has gained significant ground over Tether's USDC since the start of the year.
USDC has risen by a stunning 1,820% since January while Tether records only a 200% gain.
The disparity in gains is most evident on the Ethereum network with USDT's supply falling and USDC rising.
The proposed launch of Compound Treasury and Coinbase‘s announcement of offering 4% interest on USDC are indicators of USDC’s future dominance.
Stablecoins have become an integral part of the cryptocurrency space because of the utility that they offer users. Their indispensable nature has resulted in their meteoric rise in popularity that has led to their combined market capitalization to be well over $112 billion.
At the top of the stablecoin ladder are Tether and USDC, battling one another for supremacy. Although Tether ranks as the larger of the duo, recent data suggests that USDC is turning the tide as it outperforms Tether in terms of growth trajectory in Ethereum and DeFi in general.
USDC's Dominance
At the start of 2021, there was only $1.3 billion worth of USDC in circulation. Fast forward six months to July and that figure has jumped to $25.15 billion. This staggering leap in market capitalization means an over 1,000% growth rate.
In tracking the growth of the stablecoin, an investigation by Messari, a crypto analytical firm revealed that the growth of USDC has taken a huge chunk out of USDTs market share.
According to Ryan Watkins, a cryptocurrency expert, Tether is losing its grip on the stablecoin market on Ethereum and goes on to predict that Tethers “supply on Ethereum will fall below 50% for the first time.”
He points out that a major reason for the decline of Tether is as a result of the increasing adoption of USDC in DeFi.
It is pertinent to note that DeFi lending protocols form the bulk of the users of USDC with Compound, MakerDAO, and Aave holding up to 23% of the total supply.
Why is USDC Rising？
USDC's rise to prominence is one of the tales that has intrigued the cryptocurrency community. A large part of the rise to fame is as a result of the high-yield interests that users can get by using USDC to interact with DeFi protocols
This trend shows no signs of slowing down and may even receive a burst of momentum with the launch of Compound Treasury. Compound Treasury offers a 4% interest on USDC to projects that are built around Circles DeFi API.
Another reason for the flurry of activity around USDC is the announcement from the cryptocurrency exchange Coinbase that it would offer an impressive 4% APY on USDC.
On the other hand, high network fees have plagued Tether, making USDC a viable substitute for users.
On the Flipside
Trading volumes for Tether skyrockets to over $2.3 trillion in the last month.
This metric surpasses that of Bitcoin and Ethereum by over 2.5 times in the face of stiff competition from other stablecoins.
USDC and USDT
USDC is a stablecoin that is pinned to the US dollar and functions across multiple blockchains like Stellar, Ethereum, and Solana among others.
Launched in September 2018 and managed by Centre, USDC has grown to have a market capitalization of over $25 billion, making it the 8th largest cryptocurrency.
Tethers market capitalization exceeds $60 billion which puts it in the top three largest cryptocurrencies. Tether is issued by Tether Limited but has been plagued by controversies about whether or not it is backed by one US dollar.
