Backed by payment giant PayPal, the U.S. dollar stablecoin PYUSD has grown into the sixth largest stablecoin after a strong start last year. Looking back on the development of the past year, leveraging Solana is undoubtedly a key turning point in the expansion of the PYUSD market, and real money subsidies and the expansion of application scenarios are making it more competitive.
Jumped to the sixth largest stablecoin, and its market value and trading volume surged after expanding to Solana
PYUSD has shown a high rate of expansion this year. According to DeFiLlama data, as of August 20, the total market value of the stablecoin market reached US$167.99 billion.
Among them, PYUSD’s circulation volume at the beginning of the year was US$230 million, accounting for less than 0.2% of the overall market. Now it has a market share of nearly US$870 million, accounting for 0.5% of the market, ranking sixth, surpassing USDD, TUSD and FRAX and other stablecoins.
Unlike stablecoins such as USDT, USDC, and Dai, which are issued on dozens of blockchains, PYUSD is only issued on Solana and Ethereum today. According to DeFiLlama data, as of August 21, the circulation of PYUSD on Solana was 510 million, accounting for nearly 58.9%, and that of Ethereum was 350 million, accounting for 41.1%.
Although there is not much difference in the market share of PYUSD between the two blockchains, Solana's expansion suite was implemented at the end of May this year. PYUSD initially planned to be first issued on Solana in 2022 in cooperation with FTX, and a relevant cooperation agreement was signed.
Prior to this, PYUSD on Ethereum took about ten months to reach a scale of less than $300 million, but after being deployed on Solana, the market value surged by 217.9% in less than 3 months. And judging from the growth in supply, the adoption rate of PYUSD on the Solana network is rising at a rapid rate.
On-chain data shows that in the past 30 days, the supply of PYUSD on Solana has increased by 131.8% to 510 million, compared with a 2.4% decrease in Ethereum during the same period to 350 million, indicating that the adoption rate of PYUSD on the Solana network is increasing at a rapid rate. Growing at a faster rate.
PYUSD also occupies an important share of the Solana stablecoin market.
According to DeFiLlama data, as of August 21, the scale of stablecoins on Solana reached US$3.81 billion, and PYUSD ranked third among 26 stablecoin projects. However, in the past month, the market value of PYUSD has increased by 132%, faster than the top-ranked USDC (14.03%), and the second-placed USDT (down 2.64%).
While the market value has grown, the trading volume of PYUSD has also increased significantly. Data from blockchain data provider Allium Labs shows that PYUSD’s trading volume in August was US$4.94 billion, an increase of more than 15.4 times from only US$320 million at the beginning of the year. Especially after expanding to Solana, PYUSD has achieved a transaction volume of over US$9.84 billion in the past three months, which is 3.6 times the sum of previous transactions (US$2.69 billion).
High APY income expands usage, and multiple measures are taken to increase popularity.
The rapid expansion of PYUSD's market size is inseparable from the generous subsidies provided by cooperation with major DeF protocols on Solana and the popularization of payment scenarios.
In recent times, PYUSD has partnered with many protocols including Jupiter, ORCA, Wormhole, Drift Protocol, Kamino Finance, and Marginfi. For example, while Jupiter launched PYUSD, the stablecoin can also be used in all payment integrations on the platform, including platforms such as Sphere Labs and Helio Pay; Kamino introduced PYUSD and officially launched a deposit incentive activity, and increased the PYUSD weekly incentive by 64 % to 192,000 coins, etc.
At the same time, PYUSD on these DeFi protocols also provides high returns to encourage users to use it. For example, there are 350 million PYUSD on Kamino with an APY income of 17.64%, Marginfi can provide PYUSD with an APY income of 18.58%, and the APY of PYUSD on Drift Protocol reaches 17.49-18.28%.
The generally high yield of PYUSD is also believed to be related to PayFi, which is strongly promoted by the Solana Foundation. Payment and stablecoins are revealed to be Solana's key focus in the future. In sharp contrast, for example, the APY return of PYUSD on Ethereum Aave is only 3.55%.
Not only that, compared to Ethereum, PayPal also introduced some new features when deploying PYUSD in Solana to provide a better user experience, including "Confidential Transfer" which can provide consumers with confidentiality of transaction amounts while meeting regulatory needs." The transfer hook allows developers to call custom programs when transferring tokens to individuals and merchants using PYUSD, and the notes field allows users to record transaction information when making payments. In order to further promote innovation and the adoption of PYUSD on Solana, PYUSD recently announced a global hackathon for its stablecoin PYUSD, with a total prize pool of 40,000 PYUSD.
In addition to expanding application scenarios, PYUSD has also expanded its reputation by reducing handling fees, supporting cross-border transactions, and attracting developers to join, including Web3 payment infrastructure Transak launching a legal currency to cryptocurrency channel for PayPal USD to popularize digital asset payments. ; During the Bitcoin Pizza Festival, the handling fees for the exchange of BTC, ETH and other tokens with PYUSD are temporarily waived. PayPal's cross-border remittance service Xoom provides free remittance services for PYUSD users to expand its international remittance market share, etc.
In general, after laying the foundation with the help of Ethereum, which has a large user base and extremely high market consensus, PYUSD has made great progress by taking advantage of Solana's popularity and attractive income opportunities, and gained a certain degree of market recognition. But there is still a long way to go to gain a greater say in the stablecoin market.
