Metrics show 80 percent of stablecoins like Tether and Binance USD are held by only six accounts ๐จ This article is 4 years old...
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Metrics show 80 percent of stablecoins like Tether and Binance USD are held by only six accounts
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Updated: Jun. 11, 2020 at 5:08 pm UTC
Photo by Daniel McCullough on Unsplash
Long touted as an alternative to fiat currencies without the volatility of digital assets like Bitcoin, stablecoins and related companies mushroomed in late-2018; with a lot of projects even getting venture funded.
However, stablecoin markets may not be limited to trading and remain highly-centralized, onchain research firm CoinMetrics noted earlier this week.
USDT is well distributed
CoinMetrics analyzed the supply and activity distribution of the six most-popular stablecoins, noting most are issued on ERC20, have the same price (the USD), and end up serving the same end users.
The ERC-20 variant of Tether shines as being particularly well distributed amongst its holders. Meanwhile, 6 accounts or less own 80+% of the supply for Gemini Dollar, Binance USD, Tether (Tron), USDK, and HUSD.
Read more in this weekโs SOTN:https://t.co/6XQo4eC2wz pic.twitter.com/YeoVMw3R3C
— CoinMetrics.io (@coinmetrics) June 9, 2020
The firm said Tetherโs ERC20 token, different than its Tron and Omni generated tokens, stood as โparticularly well distributedโ amongst its holders. This, despite the controversies around Tetherโs ownership and true USD reserves.
However, only six accounts were found to own over 80 percent of Binance USD, the Gemini Dollar, Tether (Tron), HUSD, and USDK. The accounts were mainly centered on their respective exchanges, with little use outside of those bourses.
Paxos has Ponzi links
Paxos, a stablecoin project founded in 2018, seemed similar to Tether (ERC20) in terms of distribution, but most of its activity seemed to arise from an alleged Russian Ponzi project.
The two most active accounts on Paxos had direct links to MMM BSC, a global Ponzi scheme known for swindling hundreds of millions of dollars from individuals around the globe since 1990. Since 2012, the firm has operated solely on Bitcoin.
Most active Tether accounts were found linked to some type of a โdividendโ payout, even reaching 90 percent on all transactions for Tetherโs Tron variant on some days. CoinMetrics noted in this regard:
โSome stablecoins like Paxos and Tether on Tron see a lot of retail-like transactions, probably due to the presence of MMM and other dividend schemes on these assets.โ
A strange supply
Coinmetrics noted the supply distributions for all stablecoins assess their extend of usage. Those found on only a few exchanges mean little retail activity apart from trading, while widely distributed tokens, like Tether ERC20, indicate broader usage.
In the firmโs research, USDK stood out with its โstrangeโ supply distribution. Coinmetrics found some 3355 accounts hold USDK, but 94 percent of those hold either $0.5 or $1. All the deposits were made from an OKEx account in July 2019, with โbarely anyโ holder observed spending their balances.
Incidentally, the USDK is owned and issued by OKLink, a subsidiary of OKExโs parent OK group.
In conclusion, Coinmetrics stated stablecoins are usually โbunched togetherโ and appropriated as a singular entity. However,ย the network data, shows all such projects differ and have varying outcomes in supply and activity distribution.
Reports suggest there are over 130 stablecoins in the cryptocurrency markets, including bank-backed projects like JPM coin and exchange issued ones like Binance USD. Understanding these instruments is crucial, in order to build an efficient crypto-market and broader decentralized ecosystem.
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In this article
Launched in 2014, Tether is a blockchain-enabled platform designed to facilitate the use of fiat currencies in a digital manner.
Binance USD
$1.00172
BUSD is a stablecoin issued by Paxos in partnership with Binance..
Pax Dollar
$1.00005
Pax Dollar (previously Paxos Standard) is a regulated crypto asset.
Gemini Dollar
$0.99699
Gemini dollar (GUSD) combines the creditworthiness and price stability of the U.S.
Binance
Binance is a global cryptocurrency exchange that provides a platform for trading more than 100 cryptocurrencies.
OKX
OKX is a world-leading digital asset exchange, providing advanced financial services to global traders by using blockchain technology.
Gemini
Gemini is a regulated digital asset exchange and custodian that allows customers to buy, sell, store, and stake digital assets in a regulated, secure, and compliant manner.