Ethereum Becoming the Dominant Value Transfer Layer, on Par with Bitcoin Now
A tweet from Ryan Watkins, a research analyst at blockchain analytics firm Messari, revealed that as per the latest data the total value transferred on the Ethereum Network is now on par with that of the leading network Bitcoin.
The figures show that “Ethereum is becoming the dominant value transfer layer in crypto,” said Watkins.
The value here refers to the US dollar value of the units transferred on a blockchain. In the case of Ethereum, however, unlike bitcoin that only includes the USD value of all BTC sent on a given day, it also involves Ethereum-based stablecoin as it supports assets from third parties to be sent and received on its network.
And USDT (Tether) has played a big role in boosting these numbers on Ethereum over the last few months.
As Watkins said, “This is a story of the explosion of stablecoins in Q1 2020,” the best quarter ever for USD-pegged cryptos. Stablecoins added as much market cap in the first quarter of this year as they did in all of 2019.
Explosion of Stablecoins
The issuance of stablecoins “ballooned” more than $8 billion in the quarter, “driven by a global flight to safety amidst the coronavirus pandemic.” An increase in stablecoins’ issuance was so dramatic that it made Ethereum the “dominant value transfer layer in crypto.”
“Ethereum is by far the leading platform for stablecoin issuance,” he said and that it is likely that Ether will extend its lead due its maturity and project ecosystem. “Ethereum is a Wall Street in the cloud. Stablecoin issuers are following the money.”
Currently, stablecoins account for 80% of daily transfer value on Ethereum which are used for significantly larger transfers than Bitcoin.
Among the stablecoins, Tether is at the top, being the largest beneficiary of the Q1 volatility. However, its challengers also gained momentum with the native stablecoins of Circle and Coinbase, Binance, and Huobi benefiting this quarter.
The fact that stablecoins are on pace to quadruple their growth in 2019 is solidifying Ethereum’s position as the dominant stablecoin platform, said Watkins. As we reported, the shortage of the US dollar could be fueling the demand for stablecoins and in turn for the second largest network.
Many of us (early adopters) don’t like stable coins, but fact is, that’s what’s needed to help us cross the chasm, as most new crypto people will still think in fiat base for a while to come.
I wish that’s not the case, but we live on earth, not utopia. https://t.co/oBjc32vOyk
— CZ Binance 🔶🔶🔶 (@cz_binance) January 30, 2020
What about Omni-Tether?
Independent developer Udi Wertheimer however, raised concerns about Watkins’ findings that didn’t cover USDT data on the Bitcoin network. A software layer on the Bitcoin network, Omni is the world’s most used stablecoin Tether (USDT) while the Ethereum chart covers USDT as an ERC-20 token. Wertheimer said,
“USDT on Omni is bigger than all the non-USDT ETH-based stablecoins. If you include USDC and the smaller ones, you should also include Omni-USDT.”
But Watkins was quick to reply, arguing that it “doesn’t change the conclusion,” because “USDT on Omni transferred ~$90million day on average for the past 3 months. The same as USDC.”
Also, that Ethereum chart “doesn't include any other Ethereum based tokens or smaller stablecoins for that matter, which would add more to Ethereum's total,” Watkins said.
As per Tether’s transparency page, in comparison to about $4.9 billion in circulation on ETH, $1.5 billion are circulating on Omni.