According to statistics on Friday, May 13, the top stablecoins by market capitalization are currently worth $163.7 billion after the stablecoin economy was valued at nearly $200 billion just last week. Of course, the atomic terrausd (UST) failure wiped out billions from the stablecoin economy, and Binance’s BUSD stablecoin recently entered the top ten by crypto market capitalization. Just as it caused a carnage in the cryptocurrency economy, the recent Terra crash caused a major shift in the stablecoin ecosystem.
The big shift in the stablecoin economy
It was only a week ago when the stablecoin economy was on the verge of exceeding $200 billion, but the recent Terra crash changed all that. Terra’s Terrausd (UST) token was once the third largest stablecoin in existence until it lost its $1 parity. A token that is supposed to be pegged to the value of the US dollar is now trading at less than $0.20 per unit. However, the market valuation makes it the 6th largest by market capitalization on Coingecko.com’s list of “Stablecoins by Market Cap”.
Over the past month, among the top ten stablecoins by market valuation, none of the stablecoin projects experienced growth. USDC is down 0% over the past 30 days, while all other stablecoins have seen a 30-day decline. BUSD is now the third largest stable digital currency today with a market capitalization of $17.3 billion, and BUSD has also climbed to the top ten cryptocurrencies by market capitalization, taking the ninth place among more than 13,000 coins.
The Makerdao DAI token is now the fourth largest stable cryptocurrency market cap at $6 billion today. The value of Makerdao’s original token MKR has jumped 15% in the past 24 hours to withstand some floor vault repercussions. In fact, most of the stablecoins that managed to maintain their stability and reaped the benefits of the collapse of terrestrial reservoirs.
While some see the need for “more regulatory framework” around fiat-pegged currencies, some believe decentralized stablecoins are still needed.
On May 12, 2022, Circle Financial CEO, Jeremy Allier chirp: “USDC/USDT is everyday trading. A journey towards quality.” The circuit’s CEO appeared on CNBC’s Squawk Box, stating that there should be “a more regulatory framework around stablecoins.” A number of people have been closely monitoring the performance of the so-called decentralized and algorithmic stablecoins since the fall of Terra.
Despite the recent Terra UST massacre, many still believe that decentralized and algorithmic stablecoins are in dire need among the centralized giants. Founder of Avalanche (AVAX) Amin Gon Serer He believes that the cryptocurrency ecosystem needs a decentralized stablecoin.
A day before LUNA entered under a US penny, Gün Sirer She said: “Even stablecoins with full collateral have been de-pegged. Even some weak ones [algorithmic] Stablecoins have recovered.” AVAX founder also advertiser He’ always said that [algorithmic] Stables are subject to destabilizing banking operations.” Despite the risks of operating a bank, Gün Sirer explained that there is still a need for a decentralized stablecoin in the industry.
“We need a decentralized stablecoin,” John Serrier elaborated. “Fiat-backed stables are subject to confiscation and lawful arrest. A decentralized economy needs a decentralized stable currency that cannot be frozen or confiscated.”
What do you think about the change in the stablecoin economy this week? Tell us what you think about it in the comments section below.
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