Coin Metrics Week in Review | November 18 - November 24, 2024

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?Happy Monday! Here’s a look at the latest industry updates and Coin Metrics highlights for the week ending November 24th. Stablecoins once again dominated the headlines as Tether unveiled its Hadron platform for asset tokenization, Paxos expanded into Europe with its acquisition of Membrane Finance to meet MiCA requirements, and MakerDAO extended its ecosystem to Solana.

This week also saw a sharp rise in stablecoin-denominated trading volumes, signaling increased market confidence and a rising demand for liquidity, particularly in the post-election environment. Stablecoins are evolving beyond their role as a store of value, becoming essential to DeFi and broader on-chain economic activity.

Last but not least, don’t miss our latest Special Insights report on Ethereum, where we delve into its innovative advancements—such as Layer-2 scalability and institutional adoption—that are transforming the blockchain landscape.

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In our 198th issue of State of the Market, stablecoins remain at the forefront of innovation and regulatory alignment in the crypto landscape, with groundbreaking initiatives and strategic moves reshaping the market. From Tether’s bold launch of a tokenization platform to Paxos’ compliance-driven acquisition in the EU and MakerDAO’s deployment of USDS on Solana, this week highlights the critical role stablecoins play in bridging traditional and digital finance. Here are the key takeaways for institutional clients navigating these changes.

Here are the top takeaways:

• Tether’s Hadron Platform for Asset Tokenization: Tether launched Hadron, a platform designed to simplify the tokenization of assets such as stocks, bonds, and loyalty points. By emphasizing compliance and user experience, Tether aims to revolutionize how assets are issued and managed, solidifying stablecoins’ role as foundational tools in financial innovation.
• Paxos Acquires Membrane Finance for MiCA Compliance: Paxos, a leading stablecoin issuer, acquired Membrane Finance in Finland to align with the European Union’s MiCA regulations. This move positions Paxos as a fully licensed Electronic Money Institution in the EU, highlighting the importance of regulatory alignment for global stablecoin adoption.
• MakerDAO’s USDS on Solana: MakerDAO, now rebranded as Sky, deployed its USDS stablecoin on Solana, marking its first multi-blockchain expansion in 10 years. This strategic decision enhances accessibility and flexibility, fostering growth in both the Solana and Sky ecosystems.

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In our 285th issue of State of the Network, we take a deep dive into the stablecoin sector, analyzing recent growth trends in supply, trading volumes, and on-chain usage. With the total supply of stablecoins reaching $189B, stablecoins have proven crucial in both bull and bear markets as a store of value, a medium of exchange, and a tool for generating yield. We explore the evolving role of stablecoins across various ecosystems, focusing on their influence on market dynamics and the broader crypto landscape.

• Stablecoin Market Growth: The stablecoin sector has seen tremendous growth, with the total supply reaching $189B. Tether (USDT) continues to dominate the space, accounting for 66% of the market, while stablecoins on Ethereum represent 55% of the total supply. This growth highlights the increasing importance of stablecoins in providing liquidity and enabling seamless transactions across ecosystems.
• Surge in Stablecoin-Driven Trading Volumes: Post-election, stablecoin-denominated trading volumes across exchanges surged to $120B, driven by major trading pairs such as BTC, ETH, and SOL. The significant increase in trading volumes signals growing market confidence and a strong demand for stablecoin liquidity, especially during times of market volatility.
• On-Chain Stablecoin Activity and Yield Generation: Stablecoins have continued to be central to on-chain economic activity, with adjusted stablecoin transfer volumes exceeding $50B in November. Platforms like Ethena’s USDe have seen rapid growth, fueled by rising funding rates and the demand for yield. This growth reflects the increasing adoption of stablecoins as yield-bearing assets, enhancing their role in DeFi and beyond.

Source: Coin Metrics Network Data Pro

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Special Insights: Analyst Spotlight on Ethereum

Our new Ethereum report gives you a detailed look at Ethereum’s evolution, covering everything from its smart contract innovations to its growing presence in the world of institutional investing. It dives into how Ethereum is changing the game with its blockchain technology, Layer-2 scaling solutions, and the shift to Proof-of-Stake, making it more scalable and efficient. After reading our report, you'll have a clearer picture of where Ethereum stands today and what its future holds, whether you’re an investor or a developer.

Key Takeaways:

1. Smart Contracts and dApps: Ethereum’s smart contracts have gone beyond simple transactions, enabling decentralized apps (dApps) that cater to both retail and institutional needs.
2. Scalability and Layer-2: With Layer-2 solutions, Ethereum’s scalability and transaction speed have gotten a major boost, making it a better option for high-volume applications.
3. Institutional Adoption: Ethereum ETFs are making it easier for institutional investors to dive into the crypto space, expanding Ethereum’s appeal beyond just crypto enthusiasts.

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Get in Touch

As always, we'd love to hear your questions or feedback. If you are interested in getting more details, please don't hesitate to get in touch.

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Until next week,

The Coin Metrics Team