DeFi
USDC Gains Ground in DeFi as Competition With USDT Intensifies: Keyrock Report
Key points to remember
- USDT dominates centralized exchanges while USDC is leading in various DeFi applications.
- USDC has a more balanced distribution across DeFi protocols compared to USDT.
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According to a recent report from Keyrock, Tether USD (USDT) and USD Coin (USDC) are leading the stablecoin market, each carving out a distinct niche in the crypto ecosystem. USDT maintains its dominance as the trading pair standard on centralized exchanges, leveraging its first-mover advantage. Meanwhile, USDC is making significant inroads into decentralized finance (DeFi) applications, offering a more diverse portfolio of use cases.
Approximately 11.5% of USDT’s total market capitalization of $12.8 billion is held in smart contracts across 10 different chains, the lowest percentage among major stablecoins. USDT usage is primarily concentrated in bridges and decentralized exchanges (DEXs), reflecting its historical role in the crypto ecosystem.
In contrast, 20% of all USDC in circulation, or $7 billion, is in smart contracts, nearly double that of USDT. USDC has gained traction in derivatives, real-world assets (RWAs), and collateralized debt positions (CDPs). It holds about $1 billion locked in derivatives trading protocols, more than six times that of USDT.
Additionally, USDC’s distribution among dApps is more balanced compared to USDT, as evidenced by their respective Gini coefficients for TVL distribution across the top 150 protocols: 0.3008 for USDC vs. 0.6695 for USDT.
While USDT remains crucial for trading pairs and price discovery, USDC appears better positioned to drive future DeFi innovations fueled by its versatility. Still, USDT is “unlikely” to lose its market cap lead at the current pace of new stablecoin printing, as the report points out.
It is worth noting that the stablecoin landscape continues to evolve, with new entrants like PYUSD and experimental models like USDE demonstrating the potential for rapid growth and high-yield offerings in the sector.
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