• Stablecoins play a critical role in the crypto ecosystem, with widespread use across trading, lending, asset management, and numerous other functions. With a market capitalization of US$124.4B, stablecoins make up 8.5% of the entire crypto market capitalization, a testament to their importance in the space.

  • While centralized, fiat-backed stablecoins dominate the space and will likely remain so for the foreseeable future, the competition has heated up in recent months as new players enter the market.

  • The emergence of collateralized debt position (“CDP”) stablecoins, stablecoins backed by liquid staking tokens (“LSTs”), and other centralized stablecoins has come at a time when interest in stablecoins is on the rise and as projects try to compete for a piece of the market.

  • In this report, we examined projects such as Aave’s GHO, Curve’s crvUSD, Lybra’s eUSD, Raft’s R, Paypal’s PYUSD, and First Digital’s FDUSD to get a sense of the mechanics and adoption of some of the recently launched stablecoins.

  • Considering the fluidity of the market, we have also highlighted some recent developments and observations, which include MakerDAO’s Enhanced DAI Savings Rate, the integration of real-world assets, and the adoption of LSTs by an increased number of projects.


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