From October 6 to mid-to-late October, USD1’s circulating supply reportedly fell from about $4.43 billion to about $4.02 billion. Public discussion attributed the change to large redemptions on Ethereum and BNB Chain, while saying the price remained near $0.998 to $1.000. The key distinction right now is not which is more alarming—“a decline in supply” or “depegging”—but that these are two separate questions: whether redemptions were completed according to the rules, and whether a small number of addresses could significantly affect USD1’s supply.
These figures currently come mainly from the same type of public discussion. Although some claims have been repeated, they cannot be considered independently verified. There are also differences in how the figures are calculated: subtracting $4.02 billion from $4.43 billion, based on the displayed figures, gives a decline of about $410 million, while the commonly cited figure is $401 million. The discrepancy may be due to rounding or differences in the measurement times, but neither figure should be presented as definitive until the original data has been checked.
First, be clear: what declined was supply, not proven redemption capacity
According to public discussion, from October 6 to 15, the combined supply of USD1 across Ethereum, BNB Chain, and Solana fell by about $385 million, or roughly 8.7%, leaving a balance of around $4.04 billion. Over a nearly two-week observation window, the figure was about $4.02 billion. These figures cover somewhat different time periods and should not be treated as two independently corroborating statistics.
A more specific breakdown of the on-chain claims is that about $184.6 million was redeemed on Ethereum, involving 63 burns, and about $200.4 million was redeemed on BNB Chain, involving 12 burns. Together, these figures amount to about $385 million, close to the supply decline over the shorter window. This makes “redemptions and burns drove the supply contraction” a plausible explanation worth checking. But burn records, cross-chain supply, and reporting cutoffs still need to be reconciled individually; the full flow of funds cannot be established from secondhand accounts alone.
A decline in stablecoin supply could mean holders are choosing to exit, but it could also reflect institutional portfolio rebalancing, migration between products, or other arrangements. If tokens are burned after redemption and holders receive the corresponding assets at par, a shrinking supply is simply part of the mechanism working as intended. The situation would be different if redemptions were delayed or restricted, or if the secondary-market price remained below par. The material provided does not include complete records sufficient to independently confirm these steps. So a decline of about $400 million does not, by itself, prove a run—and it also cannot guarantee that future redemptions will face no pressure.
Where did the money go? Claims of a concentrated redemption of about $200 million
The most specific—and most important to verify—lead in this discussion concerns BNB Chain. It is claimed that nearly $200 million in redemptions on that chain was linked to the same unlabeled address, with funds sent to the burn process in batches. Another claim puts the size of each batch at around $30 million to $50 million. If the address clustering, transaction paths, and nature of the redemptions are all confirmed, the actions of a single funding entity could explain a substantial share of this supply decline.
But “the same address” does not mean “the same beneficial holder.” It could be a wallet belonging to one institution, or an operational address handling transactions for multiple clients. An unlabeled address alone cannot identify its holder, let alone explain why it redeemed. Describing the funds outright as “a whale fleeing” or “internal rebalancing” goes beyond the available evidence.
On Ethereum, about $184.6 million was reportedly redeemed through wallet pathways related to issuance and custody. If accurate, this claim could help establish whether the redemptions followed established procedures, but it cannot replace verification of settlement times, redemption terms, and the ultimate holder structure. For a stablecoin with a market size of around $4 billion, concentration matters not only because of how much left a particular address, but also because of whether the process can continue to operate predictably when another request of similar size arrives.
The real disagreement: the price held—how should we interpret the shrinking supply?
The more optimistic interpretation is that USD1 reportedly remained in the $0.998–$1.000 range during this wave of redemptions, with no sustained depeg described in the material; at the same time, the supply decline was accompanied by burns. If the price and redemption records are independently verified and consistent, that would at least suggest that during this observation period, market prices and large-scale exits did not visibly amplify each other.
The more cautious interpretation focuses on the holder base rather than the immediate price. Some claim that from October 6 to 15, USD1 supply on Ethereum fell by about 11.45%, more than that of several other stablecoins used for comparison over the same period. However, different products may have different use cases, on-chain distributions, and starting points for measurement. The material available also does not provide complete, reproducible data calculated on a consistent basis. This comparison raises the question of why USD1 contracted faster, but it is not enough to prove that its holders broadly lost confidence.
Public discussion has also suggested that USD1-related issuance and custody arrangements may be transferred in the future, subject to certain conditions. Whether the transfer has been approved, when it might take place, and whether existing redemption rights would change have not been established by the available material. These should be treated as matters to verify, not as product changes that have already occurred. They merit attention because a stablecoin’s reliability is reflected not only in its price staying close to $1, but also in whether holders can clearly verify reserve disclosures, redemption terms, and operational responsibilities.
Reserve figures should not be read in isolation either. One claim is that a reserve dashboard shows about $4.01 billion, while the circulating supply is around $4.02 billion. The timestamps, asset coverage, and valuation methods have not been aligned, so this does not establish a shortfall of about $10 million, nor does it confirm that reserves fully cover the circulating supply. What is needed is supply, reserve composition, and liabilities measured on the same date and basis—not two approximate figures that merely look “close enough.”
How to test these two interpretations next
If complete on-chain records show that the supposed single address actually represents multiple clients, or that the transactions were not net redemptions, then the narrative of a “large holder exiting in a concentrated move” would need to be revised. If, after applying consistent measurement criteria, the gap between USD1’s supply change and that of other stablecoins turns out to be much smaller, the claim of “unusual outflows specific to the project” should also be downgraded.
Conversely, if large net redemptions led by a small number of addresses continue, while new issuance fails to offset the outflows, the concentration issue will become more concrete. If this is accompanied by sustained trading below par, delays in processing redemptions, or an inability to reasonably reconcile reserves and circulating supply at the same point in time, the market will need to reassess the earlier explanation that this was “just a normal contraction.”
A cautious summary for now is that claims of a roughly $400 million contraction in USD1 supply come with a relatively specific breakdown of on-chain redemptions, and the price range cited in the material does not show a sustained depeg. But the key figures, who actually controls the single address, reserve coverage, and any potential transfer of business arrangements all lack independent confirmation from multiple sources. The priority for the next round of verification is not to label this redemption as either good or bad, but to reconcile supply, reserves, and the redemption process along the same timeline.