Stablecoin Popularity for Swaps
Which stablecoin is more popular for a wallet to use in swaps(use algorand.swaps table): USDT, USDC, STBL? Compare volumes and number of swaps for each over the month of March 2022.
Introduction
DEXes allow users to exchange cryptocurrencies in a decentralised way by providing different services using smart contracts to subsitute the need of a trusted third party, also called middleman, to verify and secure a transaction like CEXes do.
A very common service for DEXes is the swap of two different cryptocurrencies. In a swap, two type of parties interact in the following way:
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A swapper exchanges one cryptoasset he owns for a different one paying an exchange fee on the process. The exchange operation happens directly between the user's wallet and the liquidity pool.
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A liquidity provider locks a pair of assets in a defined relation in a smart contract (liquidity pool) expecting to earn some passive income from the exchange fees.
This dashboard will analyse the popularity of three stablecoins USDC, USDT and STBL in Algorand DEXes by volume and number of swaps in March. The first two are centralized stablecoins backed by USD and USD/EUR reserves while the third one is an algorithmic stablecoin native to the AlgoFi protocol.
Conclusion
All four metrics show a very clear trend: USDC is the dominant stablecoin in Algorand to be swapped in DEXes. STBL, the native AlgoFi stablecoin is the second most popular and, with a much lower activity, USDT is in third place. This is somehow counterintuitive, since USDT marketcap the biggest of all three at 82B USD while USDC has 52B USD marketcap. STBL marketcap could not be found on the usual coin tracking websites.
It seems that Algorand is different from the preference in stablecoins than the rest of the crypto world.
Figures 3. and 4. show the accumulated volume and accumulated number of swaps with the stablecoins as swapped to asset. USDC is 3 times bigger in volume and twice bigger in swaps than STBL. STBL is more than 5 times bigger in volume and 3 times bigger in swaps than USDT.