Polkadot’s eyes stablecoin dominance with new proposal News ▸ Polkadot ▸ Stablecoins
Polkadot’s eyes stablecoin dominance with new proposal
Stablecoins have emerged as one of the best use-cases for crypto technology over the past years.
2 min read
Updated: Jun. 24, 2024 at 8:18 pm UTC
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The Polkadot community wants to establish the blockchain network as a leader in stablecoin payments with a new proposal to boost adoption.
The proposal, which received unanimous community support, seeks to reduce the minimum balance for Tether’s USDT and Circle’s USD Coin (USDC) on the Polkadot Asset Hub to $0.01 from $0.07.
The community argued that this move would drastically boost Polkadot’s attractiveness to stablecoin users. However, the blockchain would still have to implement additional upgrades, like cutting transaction fees on Asset Hub by approximately 90% and implementing sub-1 block times on the network, to achieve its stablecoin payment goals.
The proposal stated:
“[These upgrades] together with super-apps such as Telenova, could make AssetHub (and therefore Polkadot) the home of cheap, fast & more importantly stable/ reliable stablecoin transfers — and serve as a perfect case study demonstrating the power of building on Polkadot.”
Nonetheless, community members agreed that the current proposal was a good start towards making Polkadot competitive against other blockchain networks that deal with remittances.
Stablecoins driving crypto adoption
Stablecoins have emerged as one of the most successful applications of crypto technology in the real world, especially in emerging markets like Nigeria.
Typically, stablecoins are pegged to the US dollar and designed to offer a stable alternative to volatile digital assets like Bitcoin and crypto users in struggling economies tend to use them to hedge against their falling national currencies and as a payment method for goods and services.
Market experts have predicted a strong demand for stablecoins, with Ripple forecasting the market to surpass $2.8 trillion by 2028. This growth has significantly boosted the adoption of blockchain networks like Solana, Tron, and Ethereum, which account for 87% of the $162 billion stablecoin market.
Blockchain analyst Lookonchain recently highlighted that Tether’s USDT on the TRON network achieved a 24-hour trading volume of $53 billion, outpacing Visa’s average daily volume of $42 billion during the year’s first quarter.
Moreover, PayPal expanded its PYUSD stablecoin to the Solana blockchain, citing the network’s lower transaction fees and faster processing times as critical advantages.
Disclaimer: CryptoSlate has received a grant from the Polkadot Foundation to produce content about the Polkadot ecosystem. While the Foundation supports our coverage, we maintain full editorial independence and control over the content we publish.
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Ethereum
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Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
Solana
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Solana is a high-performance blockchain platform that utilizes a unique consensus algorithm called “Proof of History” to achieve fast transaction speeds and low fees.
Tether Limited
Tether Limited is the company that introduced Tether (USD₮ or USDT), an asset-backed cryptocurrency stablecoin, in 2014.
Circle
Circle Internet Financial Ltd is a global internet finance company, built on blockchain technology and powered by crypto assets.