Whales hold the vast majority of Tether (USDT) and USD Coin (USDC)
Although the promise of decentralization is real with cryptocurrencies, the character of open access can also lead to unintended concentration. This is particularly the case with addresses that own a significant portion of a blockchain’s outstanding digital assets. These addresses are known as whales.
Originally, it was mainly the Bitcoin (BTC) blockchain that was put forward, with whales being able to move the market as they pleased. However, with its very large capitalization, the Bitcoin blockchain could ultimately be much less affected than other less valued crypto-assets.
It is for example the case of Circle’s Tether (USDT) and USD Coin (USDC) stablecoins. USDT is now valued at nearly $80 billion. Taking advantage of the fall in the crypto market since the beginning of the year, the first of the stablecoins is today the 3rd capitalization of the cryptocurrency market.
However, according to data from Santiment researchers, who analyze on-chain transactions, addresses valued at over $1 million hold over 80% of USDT put into circulation. That’s about $60 billion as of this writing. Looking in more detail, the top ten hold 28% of USDT in circulation and the top hundred 47% of Tether’s stablecoins.
? Read – The 3rd largest ETH whale spends $128 million – Which cryptos did it choose?
Whales are more dominant in the USD Coin (USDC) and TerraUSD (UST)
For the Circle stablecoin, valued at more than $50 billion and today in the top 5 of the largest market capitalizations, this concentration would be even greater. Indeed, addresses valued at more than $1 million hold 86% of USDC in circulation. Top ten addresses hold 38% of outstanding USDCwhich is 10 points more than Tether.
But these figures are rather sober when looking at the concentration of UST, the stablecoin of the Terra blockchain. Indeed, the 100 top addresses hold 97% of USTs in circulation! However, having recently entered the top 20 of the largest capitalisations, the UST represents “only” 11 billion dollars, which is much less than the USDT and the USDC.
But then, who are these famous whales? In fgeneral, they are simply the exchange platforms or the protocols of decentralized finance (DeFi). Indeed, we regularly find Binance or Uniswap. Sometimes the figures are impressive, since we learn that Binance holds, for example, 37% of the TerraUSD in circulation.
To date, there are nearly $180 billion worth of stablecoins in circulation. However, with such concentration, they are not as liquid as one might think. However, while one might worry about it, this is not necessarily a problem.
Indeed, stablecoins are mainly used for two reasons. The first is to hedge against market volatility. The second is DeFi pools, where a pair is usually made up of a volatile token and a stablecoin. For example, the ETH/USDC pair on Uniswap is one of the most important in the market.
Therebywhales have no interest in rocking the market, as they collect interest sometimes higher than 30% annually just by letting their stablecoins “sleep” in the liquidity pools.
? Going Deeper – TerraUSD (UST), a decentralized and algorithmic stablecoin powered by LUNA
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About the Author : Benjamin Allouch
Formerly a lawyer specializing in personal data and digital law, I very quickly became interested in Bitcoin, blockchain technology and their legal implications. I am now an independent consultant and editor in the field of cryptocurrencies and blockchain.
All articles by Benjamin Allouch.