DAI & USDC Are Changing the Rules of the Game in DeFi
Recently, we have seen the successful development of stablecoins on the stage of the crypto industry. Stablecoins have achieved significant success, generating a lot of interest and showing strong growth in 2020.
Undoubtedly, Tether remains the leader in terms of supply and demand, but DAI and USDC rushed in pursuit of USDT.
Tether USDT is a cryptocurrency token issued by Tether Limited. The idea of this token is to give cryptocurrency market participants the opportunity to use a stable digital asset (stablecoin) pegged to the US dollar rate, which does not experience significant rate fluctuations, unlike other cryptocurrencies. Tether is launched on the Omni Layer platform, which is a superstructure over the Bitcoin blockchain.
DAI - ERC20 token, pegged to US dollar, Dai value is 1 USD. Appeared in a community experiment that generated a fraction of the transaction volume similar to USDC. Unlike Tether, Dai does not have a centralised body to back each Dai with real US dollars. Dai is used exclusively on the Ethereum blockchain.
USD Coin (USDC) is an ERC-20 token. It is jointly developed by Coinbase and Circle. The Ethereum platform was taken as the basis for the USDC cryptocurrency. USDC refers to stablecoins - a coin that depends on the rate of fiat money and is not subject to volatility compared to other cryptocurrencies. It is presented in the form of real dollars, but in digital form at the rate of 1 USDC equal to 1 USD.
Unlike Tether, USDC and DAI do not have such noticeable and significant results in terms of dominance. Since exchanges have integrated USDC and DAI stablecoins for other purposes, such as a token-based transfer mechanism and maintaining the community.
Also thanks to the growing interest in USDC and DAI, we saw an increase in trading volume in the third quarter. In September alone, online transfers exceeded the entire first quarter. Perhaps the reason for the growth in interest and trading is that traders have gained the opportunity to generate additional income from non-volatile assets such as USDC and DAI.
In 2019 and early 2020, Tether's transaction volume was approximately equal to 67% of the total stablecoin market. With the advent of DeFi, the transaction volume of DAI and USDC has grown significantly. The market share of USDC has doubled from 10.7% to over 22%. It is worth noting that as other stablecoins integrate into DeFi, Tether's trading volume decreases markedly. For example, the market volume of USDT decreased by 20% between the second and third quarters.
Since the DAI token shows a higher generation rate. Network users began to show an increase towards it, this explains the rapid growth and expansion of the scope of tokens. This makes DAI a significant part of the DeFi ecosystem, and as it grows, users can discover more ways to use the asset.