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The stablecoin sector has recently been going through huge growth and crucial developments. DWF Ventures has shared a comprehensive market analysis, classifying the chief mechanisms and examining the exclusive trends, signifying the broadening market size and the market leaders’ dominance. The platform took to its official social media account to disclose and provide the details in this respect.
2/ Market Size
— DWF Ventures (@DWFVentures) August 6, 2024
The stablecoins market has been expanding significantly, with market cap surpassing $160bn – which is a $41bn increase since Oct 2023.
The growth indicates capital influx into crypto, especially when stablecoins play an important role as "cash" in the space. pic.twitter.com/AdNHw6lIFO
Stablecoin World Witnesses a Growth of $41B in Ten Months
DWF Ventures noted in its recent series of X posts that the stablecoin realm has witnessed great growth. In this respect, the market capitalization of this sector rose beyond $160B, displaying a $41B upsurge since October last year. The respective increase points toward a substantial capital influx into the crypto world. Stablecoins play a vital role in the form of cash in the overall crypto ecosystem.
They reportedly provide stability and liquidity to get the attention of traders and investors. Tether (USDT) occupies the top position as the leader in the stablecoin realm. It has a remarkable market capitalization of $114B. The respective amount equals almost seventy percent of the cumulative market share within the stablecoin world. USDC of Circle made immediate growth during 2020-2021.
On the other hand, Tether saw an expedited expansion since the year 2022’s mid. In the meantime, it reclaimed the majority share within the stablecoin sector. Recently, the stablecoin issuer reported an extraordinary figure of $5.2B in net profit for this year’s 1st half. Additionally, its balance contains up to ninety-eight percent of United States treasuries. The respective figures highlight the resilient financial strength and cash-generating abilities of Tether.
Stablecoins are of 4 types in the crypto world. One type includes fiat-collateralized stablecoins. They get a support of 1:1 ratio from conventional fiat currencies such as the US dollar. The top examples in this regard include TUSD, FDUSD, USDC, and USDT. The 2nd type deals with the stablecoins with crypto-overcollateralization. They get support from the reserves of Ethereum, Bitcoin, and other digital currencies. They include DAI and USDD’s notable examples.
Algorithmic stablecoins denote the 3rd type. These stablecoins depend on smart contracts and algorithms to automatically modify demand and supply. In this way, they maintain their peg. Their examples comprise FRAX and USDe. The 4th type includes commodity-collateralized stablecoins which get support from silver, gold, and other such physical assets. They take into account PAXG and XAUT as top examples.
CeDeFi Stablecoin of DWF Labs Targets Prioritizing Regulatory Compliance, and Risk Management
Moreover, DWF Ventures disclosed the platform’s current endeavors to develop a synthetic stablecoin “CeDeFi.” The respective stablecoin would prioritize regulatory compliance and risk management while offering yields to the consumers.