Nearly 13 secondary offerings of USDT are all from Tron, which leads to the increase in the use of Tron network

Original title: cryptography Stability Coin Report 06: Nearly 13 additional issues of USDT all come from Tron, driving the increase of Tron network usage.

Original text: Haibo Jiang, MYKEY researcher

In order to help cryptocurrency market participants keep updated on the development status of stable currency, we launched MYKEY Stability Currency Report to share our interpretation of the development status of stable currency and analysis of its development trend. We look forward to maintaining exchanges with our peers to jointly explore the development prospects of the stable currency.

Quick preview

- Last week, Tether continued to add 200 million USDT on the Tron network.

-USDC's market value increased by $94.93 million.

- There has been a significant increase in the supply and lending of USDT in Compound. On June 20, USDT's deposits reached $247 million and it borrowed $147 million at an annualized interest rate of 14.87%.

-USDT's last 13 offerings, all on Tron networks, totaled $1.48 billion.

- USDT has issued only two additional offerings on Omni in the past two years, totaling $550 million.

- Since the beginning of May, TRC20 USDT's daily transactions have increased by 124% and Tron's overall daily transactions have increased by 15.5%.

I. Overview of stability currency data

We begin by reviewing the changes in the basic information of each stabilisation currency over the past week (12 June 2020-18 June 2020, the same below).

Market flow

Source: MYKEY, Coinmetrics

At present, the market volume of the main stabilization currency is about $11.547 billion, and the market value continues to grow.

Source: MYKEY, Coinmetrics

In the past week, the stability currency has gained about $264 million in market value. Among them, Tether created additional shares on the Tron network for 2 times, totaling about 200 million USDT. USDC's liquidity increased by about $94.93 million to a market value of $829 million. The circulation of PAX and TUSD increased by 810,000 usd and 10,000 USD respectively; BUSD, HUSD, DAI and GUSD saw a decrease of 16.41 million, 1.111 million, 14.46 million and 70,000 dollars, respectively. The growth of stability currency market value mainly comes from USDT and USDC, of which the growth of USDT comes from Trc20 USDT. According to our observations, since May 8 of this year, USDT's 13 additional offerings have all occurred on Tron networks, totalling us $1.48 billion.

Address number of COINS held

Source: MYKEY, DeBank

Last week, the number of stable currency addresses in ethereum dropped, mainly due to a large drop in the number of USDT addresses.

Source: MYKEY, DeBank

The decline in the number of addresses held came from USDT, which dropped by 14,0078. The number of PAX, USDC, DAI and TUSD holding addresses increased by 5083, 4359, 1659 and 493 respectively.

Number of active addresses

Source: MYKEY, Coinmetrics

The overall number of active addresses in the stabilisation currency fell back last week, by about 14%, as the number of active addresses in the stabilisation currency hit a record high on June 7.

Number of transactions on the 24-hour chain

Source: MYKEY, Coinmetrics

The number of daily transactions in the main stability currency fell slightly last week.

Turnover on the chain 24 hours a day

Source: MYKEY, Coinmetrics

Source: MYKEY, Coinmetrics

Last week, the daily turnover of major stable currencies remained at the recent trading level, and the daily turnover ratio of each stable currency showed no trend change.

Ii. Development history of USDT and public chain transfer

In the second Stabilisation Currency report, we saw a massive increase in USDT issuance on Tron networks. Now, there is evidence that this is increasing. For the past month or so, USDT's secondary offerings have all been on Tron networks. In this report, we hope to review and summarize the development of USDT in various public chains, analyze the reasons behind, and better judge the development trend in the future.

Although USDT has been controversial for its lack of collateral, it has not changed investor demand for USDT. On the Compound platform, USDT has a 17.31% interest rate, compared with the second-highest ZRX at 2.82% and the third-highest USDC at 2.66%.

Let's start with a summary of Tether's assets and liabilities to take a preliminary look at all Tether's tokens and the reserves behind them. Tether not only issues USDT, which anchors the dollar, but ALSO EURT, CNHT, AND XAUT, which anchors the euro, the renminbi, and gold. Tether's liabilities include $9.631bn USDT, €40m EURT, Rmb23.53m CNHT and 50,000 ounces of gold XAUT, according to the company's own figures. At current gold prices of $1,743 an ounce, the XAUT is worth more than EURT and CNHT and second only to USDT. The assets behind USDT are $9.778 billion, $147 million more than the liabilities; The assets behind EURT, CNHT and XAUT are roughly equal to the liabilities, and Mr Tether says all issued tokens have a 100 per cent margin.

Source: MYKEY, Tether

At present, stability currency market value is about 11.5 billion US dollars, of which USDT market value is nearly 10 billion US dollars, accounting for 86.2%. USDT has circulation on Omni, Eth, Tron, EOS, Liquid, Algorand, with the corresponding market value of 1.97 billion, 5.668 billion, 2.743 billion, 5.251 million, 16.56 million and 1 million dollars respectively. The following is a review of the development of USDT in various public chains.

Originated in the Omni

Tether was founded in 2014 and USDT was initially released and traded using the Omni protocol. Omni (original name Mastercoin) is a digital currency and communication protocol based on bitcoin blockchain, which was officially launched on July 31, 2013 and also has its own token Omni. In February 2014, OMNI was the seventh-largest cryptocurrency in the world and currently ranks 945th on Coinmarketcap with a market value of just $1.07 million.

The Omni protocol is implemented by tracking the lock script that begins with OP_RETURN in Bitcoin online transactions. The transfer of tokens such as USDT is actually a transaction fee paid in Bitcoin, but for the convenience of the user, the exchange generally collects USDT directly from the user and converts it into Bitcoin for payment to the miner. Thus, the transfer of Omni USDT is not materially related to the Omni token itself.

Developed in Ethereum, USDT's first public chain transfer

In late 2017, Tether released USDT on its Ethereum network based on the ERC-20 protocol. As bitcoin's online transfer fees rose and Ethereum's Dapp increased, ease of use eventually trumped the pursuit of extreme security, and the number of ERC20 USDT gradually surpassed that of Omni USDT.

The last additional issue of USDT on Omni took place on April 14, 2019. Since then, the circulation of USDT on Omni has been decreasing. Another USDT add-on on Omni is June 25, 2018. During those two years, USDT issued two additional offerings on Omni, totaling $550 million.

The opposite is true for Ethereum, where USDT has issued a total of four ethereum prints of about $60 million in circulation by April 8, 2019. Then there was an intense placement on Ethereum.

Source: MYKEY, Coinmetrics

On October 29, 2019, the flux of ERC20 USDT surpassed that of Omni USDT for the first time, which was 1.78 billion USD and 2.02 billion USD respectively. We call this the first public transfer of USDT, and this is the pursuit of USDT practicality. Currently, USDT's circulation on Omni, Eth and Tron is $1.34 billion, $5.74 billion and $2.88 billion, respectively.

Create glory in Tron network

Free money transfers are probably the biggest advantage of TRC20 USDT. As with geographical congestion, some of USDT's functionality was shifted to other public chains as Ethereum's network fees went up, and Tether chose Tron. Tron's Ethereum features further decentralization, increased scalability, and a low cost USDT transfer service. Most notably, the most recent USDT offerings have occurred on Tron.

Source: MYKEY, Tether

EOS, Liquid, Algorand and USDT for a small niche

EOS itself is not niche, with many fans and users, but the barriers to use are too high and the degree of decentralization has been questioned. In EOS network, RAM, CPU, NET and storage are involved, and the consumption of these resources starts to bother some users when they register. In addition, THE EOS VERSION of USDT also needs to enter MEMO when transferring money, which is very inconvenient. As a result, USDT has only $5.25 million in circulation on EOS, despite the high number of users and transactions on EOS.

Liquid is a bitcoin side chain designed by Blockstream to satisfy large and private transactions. During transactions, the network of Liquid hides the transaction amount and account balance. Liquid USDT had $16.56 million in flux, of which $15 million was transferred from Ethereum to Liquid by Tether on January 7, 2020 in a cross-chain swap. As Liquid USDT targets big customers such as exchanges and OTC, there are not many trades.

In March this year, Tether issued 1 million USDT on Algorand block chain. Currently, USDT's circulation on Algorand is still only 1 million US dollars, which has not increased in these three months. Algorand can better solve the balance between "decentralization", "scalability" and "security". The USDT released on Algorand can be seen as a trial for the next generation of public chain. However, the current users and trading volume of Algorand on the chain are not large, so there is not much demand for USDT.

Third, take history as a mirror and gain insight into future trends

We refer to the event that ERC20 USDT is augmented and exceeds Omni USDT as the first common chain transfer of USDT. Now TRC20 USDT is increasing in volume and becoming the only version of USDT for more than a month. This feature is the same as when ERC20 USDT replaced Omni USDT. It is possible that the second common chain transfer of USDT is taking place. The performance of ERC20 USDT increased and exceeded that of Omni USDT during this period, which may provide some assistance for the current analysis.

Can USDT add value for the public chain?

The additional issuance of USDT will increase the value carried by the public chain, which may lead to more people using the public chain, more frequent transactions on the chain, and more DApp users on the chain. In theory, this should raise the value of the Commons chain and lead to some increase in the price of the scrip. Like DeFi, the price of the governance token rose sharply as the mortgage assets rose.

USDT has been adding heavily to Ethereum since April 2019, and surpassed the flow on Omni in October. During this period, Ethereum, like other shanzhai COINS, had a significant downward trend in ETH/BTC (but less than in TRX/BTC). Right now, only TRC20 USDT is adding, and this has been going on for more than a month. Similarly, TRX/BTC has not risen significantly and TRX/ETH is almost at an all-time low. Therefore, in practice, USDT's additional issuance does not necessarily lead to a rise in the price of public primary scrip.

Source: MYKEY, Coinmarketcap

Can USDT on Tron networks surpass Ethereum?

On current trends, USDT on Tron networks could surpass Ethereum. We observed that when USDT began to issue large amounts of data in the Ethereum network, its flux growth on Omni stagnated and continued to decline until USDT's flux in the Ethereum network surpassed that of Omni. Similarly, USDT in the Tron network has now increased substantially, while USDT in the Ethereum network has not increased for over a month. Historically, if viewed as a shift in the trend toward additional offerings, the USDT on Tron networks is likely to surpass Ethereum.

However, the situation of USDT issuance in the Tron network is not exactly the same as that of USDT issuance in the Ethereum network last year. The advantage of USDT in Omni is that it provides the highest level of security, but for most transfers and transactions, the Ethereum network already provides enough security that Omni USDT can be almost completely replaced. Exchanges, for example, require a fee of about $5 to withdraw Omni USDT, compared with $1 to withdraw ERC20 USDT. Some exchanges even closed the recharge and withdrawal of Omni USDT last year.

On Tron networks, many exchanges offer USDT with no fees for currency withdrawals and lower transfer costs on the chain. Because of congestion on the Ethereum network and rising transaction fees, the use of USDT did justify a shift to Tron, for example in many scenarios of micropayments and transfers. However, there is still a big gap in THE USDT in Ethereum, and no other common chain is seen to replace the DeFi application on Ethereum. Even if the USDT on Ethereum stops adding, there is no basis for the flux of ERC20 USDT to fall. If USDT on Tron networks eventually outpace Ethereum, it is more likely because of the massive volume of offerings on Tron.

The expansion of TRC20 USDT has led to the use of Tron networks

Since the beginning of May, the number of USDT transactions per day on the Tron network has increased by about 124%, the number of USDT transactions per day on the Ethereum network has increased by 34%, while the number of USDT transactions in the Bitcoin network has remained essentially unchanged. This is different from what we observed in the second report. As the USDT in Tron network continues to increase, the number of daily transactions on the USDT chain in Tron network presents a significant increase. The expansion of TRC20 USDT does drive the use of Tron networks. During the same period, daily transactions on the entire Ethereum network rose 5.6 per cent, while daily transactions on the Tron network rose 15.5 per cent.

Source: MYKEY, Coinmetrics

So much for this MYKEY Stability coin report, so stay tuned. In the following reports, we will provide you with more interpretations on the development status and trends of the stable currency, and help you keep updated on the development of the stable currency.

Note: MYKEY Lab has the final right to interpret the content of the article, please quote the source. Welcome to MYKEY Lab official account: MYKEY Smart Wallet.

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