Introduction to Ethereum and Solana

Solana and Ethereum are Layer 1 blockchain networks, like Bitcoin, Litecoin, Algorand and Avalanche.
Layer 1 network is a blockchain in the decentralised ecosystem where smart contracts can be deployed onto, whereas a Layer 2 protocol is a third-party integration that may be used in conjunction with a Layer 1 blockchain.
As the core networks of their ecosystem, Layer 1 refers to a simple base blockchain network. Decentralized apps are built on top of Layer 1s by developers. Consider the internet to be an Layer 1, and Instagram to be one of the apps built on the internet.

Introduction to Stablecoins

Stablecoins are cryptocurrencies that are pegged to the value of 1 US dollar.
They gain price stability by holding reserve assets as collateral or by employing algorithmic formulas designed to control supply.
On September 5th 2022, the largest centralised exchange (CEX) - Binance announced that they will be removing all USDC pairings from their platform. Does this affect USDC’s position on Ethereum and Solana? More information about this here.

In this dashboard, we will look at Ethereum’s and Solana's monthly stablecoin activity since January 1st to determine to which stablecoins gain market share on these 2 blockchains.
Analysis in this dashboard starts from June 1st 2022.
Stablecoin swap activity on Ethereum and Solana are obtained using the ethereum.core.ez_dex_swaps and solana.core.fact_swaps table.

The bar charts above show Ethereum and Solana stablecoins swap from volume per month (in USD).
USDC has the highest monthly swap from volume on both Ethereum and Solana since January 1st to the present, followed by USDT.
We observe an increase in the total swap from volume on Ethereum Solana stablecoins on January 2022 and May 2022, when UST depegs.
When we compare previous months to June 2022, we can see that since UST's depeg and failure, all other Solana stablecoins have gained market share in terms of swap from volume.
MIM on Ethereum, on the other hand, has lost market share as a result of UST's depeg because, like UST, MIM is an algorithmic stablecoin, and users have lost faith in algorithmic stablecoins.
USDC, USDT, and DAI dominate stablecoin swap from volume on Ethereum, whereas only USDC and USDT dominate stablecoin swap from volume on Solana.

The bar charts above show Ethereum and Solana stablecoins swap to volume per month (in USD).
The observation is similar to section 1, except that on Solana, USDC has the highest swap to volume every month except January 2022, when USDT has the highest swap to volume.
Since January 1, 2022, USDC has had the highest monthly swap to volume on both Ethereum and Solana, followed by USDT.

Stablecoin Swap From Volume on Ethereum and Solana

Stablecoin Swap To Volume on Ethereum and Solana

Stablecoin Total Swap Volume on Ethereum and Solana

The bar charts above show Ethereum and Solana stablecoins total swap volume per month (in USD).
Undoubtedly, USDC, USDT and DAI are the top stablecoins on Ethereum whereas USDC and USDT are the top stablecoins on Solana.
On Ethereum and Solana, it appears that stablecoins that are collaterised are more popular among users than algorithmic stablecoins. This could be due to the fact that peg stability is lower for algorithmic stablecoins because they do not rely on collateral to maintain their peg.
To ensure peg stability, collateralized and decentralised stablecoins such as DAI are overcollateralized by other assets such as Ethereum.
On the other hand, USDC and USDT are fiat-backed stablecoins and are very stable and reliable, as long as the issuer is trustworthy and transparent.

Despite Binance delisting USDC from its exchange, USDC remains the most popular stablecoin on Ethereum and Solana.
The top stablecoins on Ethereum are USDC, USDT, and DAI, while the top stablecoins on Solana are USDC and USDT.
This demonstrates that collaterised stablecoins are more popular among users than algorithmic stablecoins on Ethereum and Solana.
Users prefer collaterised stablecoins because algorithmic stablecoins have lower peg stability because they do not rely on collateral to maintain their peg.