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Tether's dominance over stablecoins falls below 80% for the first time in years

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The dominance of the leading stablecoin has fallen below 80% in the stablecoin market, according to data from Coinmetrics. This is happening for the first time in the last few years of stablecoins. Tether is the first stablecoin that has managed to maintain leadership as the dominant stablecoin.

The dominance has been due in large part to the rapid growth in demand for stablecoins, primarily in parts of the world where the direct purchase of Bitcoin or other cryptocurrencies has been banned. China has led this demand as Chinese citizens use USDT to buy Bitcoin for investment. According to data from Coinmetrics, USDT has been dominant until the end of 2018 until the beginning of 2019, when it began to fall following the launch of the ERC20-based USDT.

This decline has been progressive and USDT_ETH has now taken over the lead followed by USDT_TRX. It should be noted that Tether is the first USDT currently issued on Omni Layer, while ERC20 and TRC20 are the ones issued on Ethereum and Tron blockchains respectively. These came later, when Tether decided to issue USDT on other blockchains.

The change in domain could be due to the reduction in Tether transaction volume compared to ERC20 USDT. CoinDesk reported in May of this year that the number of Tether transactions has been steadily declining for the past 12 consecutive months. Tether's supply has also seen a continuous decline for months, the reports add.

Omni was the sole supporter of USDT for three years prior to its launch on Ethereum. It was only two years before the Ethereum-based supply of USDT surpassed that of Omni. Earlier this month, 1 billion USDT tokens were moved from Tron to Ethereum. This is just one of several on-chain exchanges between Tron and Ethereum that has further increased supply on the Ethereum blockchain.

The Poloniex exchange says that the decision to move more USDT to Ethereum is due to Ethereum giving users more flexibility compared to Omni and Tron. Will ERC20 USDT continue to hold dominance in the USDT offering?





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