I checked DefiLlama’s stablecoin data, and USD1 has shrunk sharply over the past month: it was at $4.21 billion 30 days ago, but is now down to $3.13 billion—a drop of a quarter. It’s fallen by around $130 million in just the past day.
The longer-term picture is even more dramatic: it peaked at $5.39 billion in February and is now below 60% of that.
But its price hasn’t been affected: USD1/USDT is still around 0.999 on Binance. That suggests it hasn’t lost its peg—people may be redeeming it and moving their money elsewhere. Meanwhile, USDe actually grew from $4.76 billion to $4.9 billion this month. The money hasn’t all left; it’s choosing where to go.
Another interesting detail: BSC now has $1.12 billion, surpassing Solana’s $1.05 billion and Ethereum’s $910 million to become the largest chain for USD1. Ethereum saw the biggest contraction.
My take: A contraction in stablecoin supply says more than a drop in token prices—it means cash is leaving the market. World Liberty says it will use reserve yield to buy back WLFI, but the circulating supply keeps falling, and so will the yield.
Do you think this is large holders exiting USD1, or just normal capital rotation?