On Ep. 4 of Stablecoin Stats, Anthony Yim, Co-Founder @ Artemis and Andrew Van Aken, Data Scientist @ Artemis discuss Ethereum's $15bn stablecoin supply growth and more!
On Ep. 4 of Stablecoin Stats, Anthony Yim, Co-Founder @ Artemis and Andrew Van Aken, Data Scientist @ Artemis discuss Ethereum's $15bn stablecoin supply growth and more!
Timestamps:
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Music by Henry McLean
Anthony Yim 00:00
Steve, welcome back to tokenized stablecoin stats. The show focused on stablecoins and the institutional adoption of tokenized real world assets. We're back again this month to dive into the stats behind the stats behind the stable coin market. My name is Anthony Yim, co founder of Artemis, a crypto analytics startup, and joining me today is my colleague and friend, Andrew Van Aken, data scientist at Artemis. A quick disclaimer before we get into things, I'd like to remind you that the views or opinions of our contributors today are their own and do not necessarily reflect those of the companies they're representing. Nothing we say should be taken as tax, financial investment or legal advice. Do your own research. Lastly, before we get into stats, I'm thrilled to remind you that this podcast is made possible by Visa and powered by Artemis. Before we get into things today, I actually want to do a quick shameless plug on our stablecoin report. So yesterday, we were catching up with a large FinTech, and their head of crypto was like, Hey, we use the stablecoin dot FYI report internally. Very, very often. It's like the number one resource they go to when they try to get data for stablecoin payments. And I thought that was very cool. I mean, it just was a passing comment. I forgot about it, but this morning I woke up, I was like, wow, that hard work there you guys did with Sebastian, our team, and it was inspired by Kai. Actually, I think we were having a conversation with Kai, like, almost a year ago. Kai, obviously, is the other host of the token ads podcast, and yeah, just how far we've come. It's really cool, and we're looking to do another one. I think that is right. And so I wanted to bring it up, because if you're listening and you are part of a FinTech or a state point PSP that does state one payments, and want to be included, let us know you can reach us, or you can reach me at Anthony at Artemis dot XYZ. And we'd love to include
Andrew Van Anken 02:00
you. And another piece of banter, you were in Brazil this past two weeks while I once again sat home and made charts. I feel like every time I start this podcast, you go somewhere nice, I sit home and make charts when you got off a plane, what was the first thing that you saw?
Anthony Yim 02:15
Yes, the first thing I saw was a tether ad, actually a usdt payments remittance ad. I have to dig up the photo, maybe we can share it in a tweet or something. And of course, then I was inundated with like, pics related, not only ads, but like, you know, I was paying for stuff. And pix was always an option, including at the McDonald's that I was at, where my girlfriend wanted to get a happy meal because I had a cool Hello Kitty toy. And one of the payments option was pix, very cool, very cool. They're living the future in Brazil, not like us Americans. We're just by our McDonald's with regular old Visa cards, I guess. All right, so a lot of things happening in Ethereum land, not just around stable coins. I mean, of course, like the top of the town these last couple of months are stats, and Tommy's been doing his CNBC, Bloomberg TV circuit, and eth just hit all time high, I believe, right? I mean, I feel like a year ago, everyone was like, Yeah, eth is dead, but it's crypto. Nothing is ever truly dead. And things that are the hottest projects are dead the next day, and the dead come back from the comeback alive. And so this is incredible. This Ethereum for stable coins, grew 15 billion in supply this past month. Andrew, what? What do you think is driving this growth?
Andrew Van Anken 03:32
Yeah, one day a project could be dead. The next day it's minting $15 billion in supply month over month. So that would be a about a 15% gain a little less month over month. We kind of talked about this last episode where we're seeing this almost pick your swim lane, type of stable coin, where different stable coin providers are trying to go after different markets and different strategies. And it's actually working across the board. Literally every strategy someone picks, you're seeing an increase in supply. And so the first audience that we're looking at here is more of on the retail side of retail customers holding stable coins. And binance just continues to be this vacuum of stable coins. And so what we're looking at here is binance share of stable coin supply over time, and about last month was the first time they've almost eclipsed $50 billion of holding stable coins, which is insane, given that, if you think that, if the market is about two $80 billion or so, they have 50 billion of that, and it just continues to Just get sucked in. Even more interesting is that USDC, after binance and circle announced their partnership last year, USDC is just continues to flow onto binance. Now there are over $10 billion in supply of USDC on binance. So obviously, a lot of this is crypto trading. People are trading Bitcoin. Ethereum, et cetera, but binance itself is almost starting to become a bank with huge distribution. So what we're looking at here is the number of days before a company got to 1 billion in deposits. So for example, chime a company that just went public started about 10 years ago. Took about between six and seven years for the company to get about a billion dollars in deposits. But you're kind of seeing this just collapse. And so as companies become more digital, more digital native and get more distribution, the time to attract deposits goes down and down. So for example, even Nubank in Mexico, Nubank had already established their global presence and in lifetime, before launching in Mexico, it took them 183 days to get to a billion dollars in deposits. Binance and plasma. Plasma being the new stable coin l1 chain, they launched a partnership with binance where users could get rewards if they deposited usdt into this earn campaign that was sponsored by binance and plasma. It only took them 15 days to get to a billion. That's only 10 more than Apple, the global iPhone maker. Yes, that type of Apple, not an apple Fruit Company. What do you make of this? Andy, this is crazy to me that these global crypto brands essentially have wider distribution and more brand recognition than almost traditional fintechs.
Anthony Yim 06:31
Yeah, I think that's why Patrick Carlson says that crypto is a room temperature superconductor of finance that's just significantly lowering the barrier for anyone with a internet connection to be able to would interact with finance, to be honest. And so especially, I think finance is demographic right? It's like my girlfriend just started a Wealthfront account. As Americans have it's really easy for us to access these types of products without any kind of she opened it for purely for the high yield savings account. But I don't think Wealthfront is accessible for a vast majority of binances, or any of binance's customer base, right? And so, I mean, I think you have this, like, captive audience. I'm assuming there's like, at least hundreds of millions of users on binance across, say, like Middle East, LATAM and and many parts of Asia. And so it's, like, not at all surprising to me. I think it's that's incredible, and we're seeing it like unfold. And I mean, this bring up more questions from year around, like, hey, like, how should banks actually react to this? Like, curious how like, new bank would react to this, actually,
Andrew Van Anken 07:35
yeah, yeah. Essentially, I think we produced some slide a while back where, like, binance would be, like the fourth largest bank in Vietnam, and I think Vietnam is one of the largest traffic destinations in Vietnam. So yeah. I mean, it's entirely possible that you could start seeing capital flight from real, well established banks to these crypto exchanges if they're offering high yield savings, especially in dollar denominated products, yeah.
Anthony Yim 08:02
And I guess in emerging markets, because we've been getting a lot of question at Artemis as a data company, on the topic of, hey, we're like, a bank. How much should we be afraid of stable coins and crypto and, like, is there a deposit flight? And I think in the US, it's not quite happening yet, but I think there's a bifurcation of like, what's going on?
Andrew Van Anken 08:22
Maybe, yeah, yeah, exactly. And so finally, to look at this retail driving stable coin adoption trend, one thing that we started to look at was P Y U S D, and what we are looking at here is the chart of address to address transfer volume of p, y, s, d, below $100,000 and we're getting this very evenly distributed transfer size where it's not one transfer size bucket that dominates the total volume process. So for example, when looking at this volume, you can see transactions between 10 and $100 make up about 25% of py USD, address to address to volume. Then if you look at 100 to $1,000 there's another 25% it's very distributed. And why this is important is because you can start to see this trend where actually people are using this for payments, and while the volume on py USD is about $9 million a week. It's nothing crazy. In November 2024 it was $500,000 so you've essentially 20x in little less than a year. And now, with different apps allowing stablecoin transfers, I only expect this trend to continue to accelerate. And you can also see with py USD where the py USD is located. It's primarily going into Paxos signaling that is being used for consumer driven purposes. So you have this huge surge of stablecoin supply for retail purposes that are going into these retail driven. In places like Paxos, PayPal and binance, that's essentially Trend number one that we're seeing for stablecoin supply. On the totally opposite side, you also see this huge stablecoin demand from what we like to call almost crypto degenerates, if you will. And what we're looking at here is a chart of usde by Athena, and supply of usde actually doubled from July to August, so we were sitting at about $6 billion of usde supply, and now we're over $12,000,000,000.30 days later. And the key unlock for this is that ave the defi lending protocol allowed people to deposit Pendle tokens into their lending pool and to borrow usde against that. And what Pendle does is it's almost functions like a credit default swap, where you can essentially, like, lock your interest rate in. And so let's say, if Athena is yielding 8% you can enter into a Pendle agreement and get tokens to essentially lock that rate in, similar to how credit default swaps works, where, if you it's a slightly different context, but essentially you're swapping a fixed for a floating yield, or floating for a fixed yield. If you want to hedge your the yield that you're getting, you can do that via Pendle. What people do is they deposit into Pendle, they borrow in Ave they deposit back into Pendle, they borrow more. Athena, and you have this loop of stable coins that is being generated. Anthony, does that make sense? Are you participating in this crazy looping strategy here
Anthony Yim 11:36
that was before they were enabled looping actually. So I tried to actually loop about a year ago, but I wasn't able to with with Ave back then. And so I got a nice little air drop from Athena, actually, but it was kind of a panty ass. I have other things I need to do to keep the lights on here, and so I have unfortunately not participated recently.
Andrew Van Anken 12:00
So what this tells me is that you could even be the co founder of a cryptic analytics company, and you are not Degen enough to participate in the stable coin looping strategy that's going on here. But I think this drives the point home where you have retail customers using stable coins for $10 payments trying to earn 5% yield. You also have a surprisingly large amount of capital going to strategies using very sophisticated defi instruments in order to increase yield, and we can see that quite clearly here. And then you have another segment of stablecoin users, what I like to call more the regular institutions that are also driving stable coin supply. And so here we're looking at usdg by the entity that holds it. And so usdg is a stable coin that is issued by Paxos Singapore, and was created essentially to be a consortium and try to compete with the tethers and the circles of the world. Companies like I believe, Robinhood, Galaxy digital, are all part of this consortium nuvey, to try and drive adoption of this stable coin. And you can clearly see the holders of this stable coin are much different than the last two audiences. So Bitcoin, custody, fire blocks, custody, Anchorage, digital. What I believe is happening here is you have a lot of these companies that possibly are using stable coins for back end settlement. So maybe Robin Hood is settling weekend trades in stable coins, or doing some sort of settlement in stable coins, where they're holding the stable coins at a custody provider. And so here you have a totally different segment, which and usdg has, I believe it has almost quadrupled in supply in the last few months. So you have these very three distinct audiences that we're looking at here. So Anthony, we've seen Ethereum gain essentially 90% of all stablecoin supply in the last month. Do you think this trend will continue, or do you think that there'll be an eth competitor that's lurking in the shadows?
Anthony Yim 14:08
Yeah, I personally think that chains are winner takes all. I mean, just seeing you present those slides in the last couple of minutes, I'm just a lot more bullish on Ethereum, like we work with a lot of the one foundations across the board, and this diversity of use cases and sources of liquidity is like the Holy Grail. If crypto is going to be the infrastructure for the future of finance. Like, if you have degens Moving yield on defi, you have institutions coming in, you have consumers using stable coins like this is a hallelujah moment for Ethereum, and that's what Tom Lee also has been you know, of bit mine, he's been preaching, right that, hey, for financial institutions who want to get involved with smart contract platforms, really the only option that they trust is Ethereum. And so Ethereum. Teams having this, like, sort of Bitcoin moment. I think it's what everyone's sort of saying, especially on the fi side. And it's really cool to see it in numbers. And I think, like to me, these chains are when it takes all in the sense that it's kind of like operating systems and web two, where Apple released their app store, all the devs are gonna come in and build apps for mainly apple, and you get better apps, you get more apps, and you get more consumers on the other side, and you have this like incredible moat that makes Apple the number one Phone OS or the smartphone platform in the world. And so I'm just very bullish on its humor. Now it's given this data
Andrew Van Anken 15:36
set, yeah, so I'll take the opposite view. I'll negate all the data that I just looked at, I've been starting to think of L ones as banks. In that we have probably 10,000 banks. United States, probably 100,000 more globally, all these banks offer different things, you know, high yield. Some offer investments. Some offer wires, Ach, et cetera. And so depending on the use case of the person, if they're looking to send a low cost transfer, maybe it's regional, maybe it's yield, all these chains are going to attract different use cases, and that the way that people are going to send over it is going to be essentially abstracted by apps themselves. And so think meta masks, you know, Phantom eventually, like, if I were to send you $10 hopefully I would never have to see, like, what chain it goes over. But maybe phantom or Metamask is saying, like, Okay, well, what chain is cheapest to send it over now? And so I'm trying to, like, optimize it for that. It's almost like an aggregator, if you will. Or companies like layer zero is just going to abstract this, where you have, if I'm holding my money on avalanche, but then you're on linea, but then it's super cheap to send it across chains. They'll just route something to layer zero. And so I think there's definitely value in obviously having value of your own chain. Obviously, like circle stripe, I'm losing count at this point of all these different chains that are trying to come up. And so I think, for better or for worse, I think we're gonna see 100 more l ones in the future. We'll see, sounds like a good user experience?
Anthony Yim 17:14
Well, I think that that's like, really the hardest problem to be solved for crypto is actually just UX, and that's why it's like, yeah, all these, like, really cool infrastructure projects are cool technologically. As a computer scientist, I appreciate the technological innovation, but ultimately, it's like, the average person on the street has to be able to, like, use it easily, and we should create a poly market, or bet on whether chains are gonna take so I don't know how you would actually measure that, but maybe by liquidity or
Andrew Van Anken 17:42
something, I don't know number of chains, yeah, by liquidity, supply or something like that.
Anthony Yim 17:47
Yeah. So your point is basically that, like, the interoperability of these chains, unlike Apple versus Android, like which are not interoperable, change the dynamic of the game.
Andrew Van Anken 17:58
Yeah, exactly. And now that, especially if you're using an EVM, right? It's just so easy to pour over everything from avalanche to linea, linea to Arbitron. And so maybe there's a protocol on Arbitron that's offering 8% yields, and all of a sudden, two will just go over there and then go back if it's 7% or 9% on Avalanche or something like that. It's a developer's nightmare, but it is seemingly the world that we are slowly grinding towards. Yeah, I think that's my as a former developer. That's my like, bias. I'm like, I don't want to be like, building on 10 different chains. I'm just building on AWS, whatever is has the most support, Docs, whatever cloud is the best, optimized for whatever documentation has the most documentation whatever has the most like responses on a forum for like, with this weird bug that I'm whatever solidity bug I'm running into, it's like, that's why it's like, all the devs are gonna gravitate towards one chain, especially as we move away from, I think that normies come in as devs, right? It's like, then we're gonna choose, you're gonna choose a thing that has the most support, and it's as like, sort of simple as that, but yeah, well, we'll see. I do see your point. Yeah. I wanted to quickly segue to raises. Venture capital raises are starting to heat up for stable coins, which is always great. So here we're looking at Series B raises in the month of August via our friends at crypto dash fundraising. And you can see that half of raises for Series B companies were stable coin related, m zero, which does stable coin infrastructure and helps issue stable coins across different chains, rain, which does credit card processing, and Tai pay, that is enabling peer to P payments, all raise Series B rounds all distinctly different from each other in what they do, which is exciting for just the number of use cases of stable coins, and just like the broad application of it. So do you think we'll have more than three next month, in September? Or what's our poly market odds for stable coin Series B raises in September? Oh.
Anthony Yim 20:00
Um, I think it's gonna stay at about the bail on my one other data point, which is I was in computer program as a mentor yesterday for a chain that I won't name because they haven't announced the participants yet, and half the teams are doing something in audio area and stable coin related. And so these are all like pre seed companies. So maybe that's like a data point for a future series A's and series BS. But, yeah,
Andrew Van Anken 20:26
nice, nice. Hope you brought your checkbook with you. And then I think finally, the last thing we wanna mention is we wanna talk about USD one which actually broke our chart on Artemis because the supply growth has been so quick, and especially on the Solana blockchain. So USD one recently launched on Solana. This is the stable coin from World Liberty fi. In a little less than 10 days, we're already nearing $200 million in supply. This is after USD one has roughly $2 billion in binance Smart chain, and then about another $400 million on Ethereum. It's pretty impressive, given how many stable coins that we see to get this quick of a launch. So given USD one's recent growth explosion out of the gates, what do you make of this? It's quite impressive, don't
Unknown Speaker 21:14
you think? Yeah, I mean,
Andrew Van Anken 21:15
first off, I think, like, hats off to Trump for branding it as USD one. It's really like a very clever name. I'm surprised that other people haven't taken that name. Actually, it definitely rolls up tongue. But more importantly, like everything else in the world, everything is vying for our attention and and day, like stable coins themselves are or even currency is a brand. That's why the greenbacks, you know, the US dollar is so popular, people have all these beliefs, and they have the confidence in the US dollar and it's and the country's ability to pay off its debt, we can have a whole separate conversation about whether that's changing over time and which way it's trending, but for at least a good part of last several decades, the US dollar and T bills are the risk free rate, right? And so having this brand that's tied to the president United States is is very powerful. And I think really like, no matter which side of the pile you're you're on, it's, it is really important. Yeah, I like the angle of brand, especially because under genius, essentially all stable coins become the same. They're holding short term treasuries. The differentiating aspect is clearly liquidity, but yeah, to how do you differentiate? You know, a, p, y, U, S, D versus USD, one. It's really about like the story that the stable coin tells, like the ideals and the vision that it has, and having like the US government associated with this grand vision of stable coins is no offense to, you know, other stable coins, the fintechs. You know, it seems like people can get into the story of, like, the US dominance and the US heritage versus, you know, a FinTech company. So I think we'll definitely see a lot more creative ways that companies try to increase their brand in the stable coin space. And really, you know, have people identify almost with a stable coin, and to pick their favorite stable coin, if you
Anthony Yim 23:04
will. Well, thanks, Andrew. I think that's all the time we've got for today. And thank you so much for the audience for listening and watching Andrew. Where can people find out more about you? Well, you can follow us at Artemis on Twitter and head up our website, Artemis analytics, dot XYZ, and if you haven't already, please subscribe to tokenize on Apple, Spotify or whatever podcast platform is your favorite. Finally, if you enjoy this and want more, leave us a review. It really helps others find the Show. Thank you.
Speaker 1 23:37
Stay stable, everyone.