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January witnessed an unprecedented surge in stablecoin transactions on Solana, surpassing $300 billion. This figure not only eclipses the $297 billion recorded in December 2023 but also represents a staggering 2,520% increase from the $11.56 billion volume in January 2023.
Solana’s market share in the stablecoin sector has seen a phenomenal rise, currently standing at nearly 32%. This is a significant leap from the mere 1.2% share it held a year ago. The steady increase in stablecoin activity on Solana, which began gaining momentum in October 2023, has now escalated by 650%.
Competition with Ethereum and Tron
While Ethereum continues to lead the industry in stablecoin transfer volume, with $317 billion this month, Solana is rapidly closing the gap. Tron follows as the third-largest blockchain for stablecoin transfers, with $240 billion so far this month.
The surge in its stablecoin volume is primarily attributed to the transfer volumes of USD Coin (USDC) on the platform. Artemis, a blockchain analytics platform, noted that weekly stablecoin volumes across all networks reached a yearly high in the week of January 8th, largely due to USDC transfers on Solana.
Stablecoin transfer volume surpassed $367 billion for the week of January 8th. This notable growth can be attributed to the $USDC transfer volume on @solana, which has propelled stablecoins to reach their highest transfer volume levels in over a year. pic.twitter.com/jpitEHXPxn — Artemis (@artemis__xyz) January 16, 2024
Adding to Solana’s stablecoin ecosystem, Paxos recently announced the launch of its regulated stablecoin, USDP, on the Solana blockchain. This move is expected to further bolster the platform’s position in the stablecoin market.
In the broader context, over the past year, more than $1.18 trillion in stablecoins was transferred across all blockchains. Despite the impressive growth in stablecoin volumes, the Layer-s blockchain’s native token, SOL, has seen a price retreat this week, trading at $93 at the time of writing, down 25% from its December 2023 high of $123.
DeFi Growth on Solana
The increase in stablecoin volumes on the Ethereum killer is accompanied by a rise in decentralized finance (DeFi) activity on the platform. The total value locked in Solana’s DeFi protocols has reached its highest level since September 2022, standing at $1.36 billion, according to DefiLlama.
This surge in stablecoin transfer volume on the Ethereum killer marks a significant milestone for the blockchain, highlighting its growing importance in the cryptocurrency ecosystem and its potential to challenge the dominance of established players like Ethereum.
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