Stablecoins’ market capitalization has increased significantly over the last six months, from $122 billion in October 2023 to $157 billion in April 2024.Tether (USDT) is the stablecoin supplier with the largest market share, having raised over $100 billion and holding more than 70% of the market.Building on this pace, Tether reported a record $4.52 billion profit from holdings in U.S. Treasury, resulting in $1 billion in net operating earnings, in its Q1 2024 attestation report.As of April 28, there were 5.6 million active Tether addresses (balances that were not zero).
Using the Herfindahl Index, we explore these wallets’ decentralization in additional detail.Repurposed to gauge the market concentration of Tether wallets, this index sums the squares of each address’s network balance to determine the proportions of the total supply held by various addresses.If the score is low, it means that the supply is more evenly dispersed among numerous addresses, whereas a high score implies that the supply is concentrated in a few hands.
The Herfindahl index scores for the various stablecoins are 0.00708164 for USDT, 0.00981202 for USDC, and 0.00331652 for DAI, as seen above.The supply of DAI, followed by USDT and USDC, is spread among addresses in the most equitable manner among the top three stablecoin providers.A more equally distributed supply may result from the recent addition of USDT to the TON network, which could lower its Herfindahl score.April saw the announcement by Telegram, a messaging app with 900 million active users per month, that USDT would be supported natively on TON.The distribution of Tether wallets could be greatly impacted by this action.
With a 98.2% domination, USDT dominates TRON transactions when looking at the top three blockchain platforms and how they use stablecoins.Gas expenses can vary, but USDT transfers on TRON usually range from 95 cents to about $2. Peer-to-peer USDT transactions can be carried out for free within the TON wallet as it is naturally integrated within the Telegram software.According to reports, there is a network charge of 0.0145 TON (or roughly $0.09 as of May 6, 2024) for transactions between two USDT users that happen outside of the wallet.
Users may decide to move from TRON to TON for frequent, minor transactions due to the integration of USDT, which offers faster transactions and reduced fees.In 2023, the US, Indonesia, Brazil, India, and Russia will be the top five nations on Telegram in terms of users.In the international remittance business, the majority of these nations are major players.While Russia experiences large inflows from its diaspora in Europe and the former Soviet states, India is one of the top recipients globally.Malaysia and the Middle East are major sources of remittances that Indonesia receives from its migrant labor force.On the other side, Brazil is more renowned for its remittances, which it sends to its emigrants in Europe, Japan, and the US.
Due to Tether’s TON network integration, substantial market share, and possibility for a more dispersed wallet system, USDT may be more widely used in major remittance markets as a result of Telegram’s user base growth.