Stablecoin activity takes crown from DeFi in Q3: report

Stablecoins are often considered assets that carry systematic risks in financial markets. However, these leveraged tokens have become the most popular category among investors in adverse market conditions.

QuickNode's latest on-chain report shows significant growth in stablecoin activity on blockchain networks.

Stablecoins saw a 45% growth in active addresses and a 41% increase in transactions between the first and third quarters. Conversely, DeFi has experienced significant drops in daily active addresses and transactions. Moreover, these protocols went from over 1 million daily average transactions in the first quarter to 786,000 in the third quarter.

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Stablecoin's growing appeal to investors

It wasn't until July that the stablecoin solidified its dominance in the market, with transactions surpassing DeFi protocols on various blockchain networks, including Ethereum, Arbitrum, Polygon, Optimum, and others. In Q3 2023, stablecoin outperformed other categories, boasting over 400,000 daily active addresses, making it the only category to show growth.

The QuickNode report was shared with CryptoPotato,

“Stablecoins are a major player in terms of everyday active users. They have eclipsed traditional strongholds like Define in previous years. The increase in stability and predictable value that stablecoins offer makes them an attractive entry point for both new and experienced users.”

USDT continues to lead the stablecoin space in terms of market capitalization, active addresses, and trading activity. It concluded Q3 with an average of 337,000 daily active contacts, with transactions averaging 680,000 daily.

Although the USDC continued to lead the volume over the USDT for the third quarter, the analysis indicated that the gap narrowed significantly since Q1, mainly due to the decline of Silicon Valley Bank (SVB) and USDC's modest loss of $0.03.

Meanwhile, USDC experienced a significant volume decline, down 62 percent from Q1 to Q3.

Uniswap will grow in Q3

2023 has not been kind to DeFi. The report found that Uniswap is the only DEX that has maintained stability since Q1 2023, despite the significant event of the collapse of Silicon Valley Bank (SVB). This decline resulted in a sharp increase in the platform's trading volume, driven primarily by a few large exchanges, rather than an increase in the number of transactions or active addresses.

Notably, Uniswap is the only DEX to show a 15% growth in active addresses and a 33% increase in transaction count during Q3, which diverges from the broader DeFi trend.

While DEXs continue to dominate the DeFi subcategory, acquisitions are gaining momentum, in another interesting trend.

In Q3, total staked Ether increased from 23.7 million to 27.2 million, of which 37% was through Liquid Staking – a concept similar to distributing IOU tokens in exchange for equity assets.

Users who deposit Ether with the Lido DAO protocol receive stETH tokens, allowing them to participate in DeFi while earning ETH rewards. At the end of Q3, Lido accounted for 32% of all ETH held, with its value growing from $7.6 billion to $8.8 billion, a 16% increase.