arrow-up
Blog

The Flipside Stablecoin Recipe for Success 

By
Published on:
April 6, 2021

Flipside Crypto gives a breakdown of several stablecoins and their activity in the DeFi space.

Table of Contents

What are the on-chain metrics that matter most for the success of stablecoins?

In this report, we focus on USDC specifically, and look at its DeFi activity and health in comparison to three other leading stablecoins (USDT, DAI and PAX).

All data visuals were created using Velocity, which is public and free for anyone to create queries.

Access velocity: https://app.flipsidecrypto.com/auth/signup

What Metrics Really Matter for Stablecoins?

flipsidestablecoinrecipe

There are a few important facets to consider when evaluating the health of stablecoins on Ethereum. Here is our take:

Liquidity

  • Is there enough to manage demand? 
  • How is it broken out at a high level?

Supply

  • Is it active and healthy?
  • Who is using the top stablecoins, where, and how many protocols support them?

Peg

  • How reliable is the peg? 

Transaction Fees

  • How much are users paying to use the stablecoin?

Total Value Locked in DeFi

How much stablecoin supply is staked in known DeFi protocols? An important ingredient in the picture of stablecoin health: the more stablecoins are used in more protocols, the higher this number will grow over time.

tvlbystablecoin
Access to CSV and API endpoints for this data: https://velocity-app.flipsidecrypto.com/shareable/tvl-ZxRPeY

Volume, Active Addresses and Transaction Counts

We break out these three fundamental metrics for on-chain activity into three buckets: DeFi + DEX; CEX; and Other, to observe overall growth in use of stablecoins and to see which categories are spurring that growth.

totaldailyactiveaccounts
cexwithdrawals
dexdefiusers
totaldailytransactions
cextrans
dexdefi
totaldailytransfervol
cexdtv
dexdefitransfer
Access to CSV and API endpoints for this data: https://velocity-app.flipsidecrypto.com/shareable/triumvirate-bWzSFF 

Liquidity and Number of Holders

To track the number of active users, we observe both the liquidity they control, as well as the number of addresses that control it. In general, the more liquidity controlled by the more users (addresses) the better. We also break this metric out by DeFi + DEX; DEX; and Other for added information.

balancesmonth
stablecoinaccounts

Access to CSV and API endpoints for this data: 

https://velocity-app.flipsidecrypto.com/shareable/liquidity-SzIz2w

Developer Preference/Support

Stablecoins used by more protocols are more likely to be foundational parts of the space’s rapid expansion. We count the number of projects, including DeFi protocols, Decentralized Exchanges, dApps, and Centralized exchanges that support or rely on stablecoins for their operation. This is an indicator of developer preference and it is clear from this metric that USDC, DAI, and USDT are the default choices.

projectsblanaces
Access to CSV and API endpoints for this data: https://velocity-app.flipsidecrypto.com/shareable/protocols-ZGNEe8 

How Reliable Is the Peg to the US Dollar for USDC?

We use CoinMarketCap’s price ticks bucketed by day to show variance in peg. This is a fundamentally important metric that underpins each stablecoin’s perceived legitimacy and reliability to the user community.

usdcpeg
usdchistoricpeg
Access to CSV and API endpoints for this data: https://velocity-app.flipsidecrypto.com/shareable/variance-KCfD9K 

How Much Users Pay to Transact

Fees paid for stablecoin transactions over the last nine months underpin the choice by users to pay in some cases significant sums to send, stake, and otherwise use stablecoins by category.

cexfee
Access to CSV and API endpoints for this data: https://velocity-app.flipsidecrypto.com/shareable/fees-K3CKrq 


This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.

Author(s)

Rochelle Guillou

I'm a market analyst and writer at Flipside Crypto.

Terms in Article

Join the thousands already learning crypto!

Join our free newsletter for daily crypto updates!

Email submitted!
Oops! Something went wrong while submitting the form.

Related Articles