USDT Dominance Peaks As DeFi Experiences Renaissance: Report

Stablecoin Total Value Locked (TVL) on the Tron blockchain in 2018 It experienced a slight decline in the second half of 2023, but eventually reached an all-time high of nearly $48 billion.

This is according to a recent Reflexivity report, which revealed that around 94% of this total value is USDT.

Tron has emerged as a top pick for USDT.

Reflexivity research has maintained Tron as the leading blockchain for USDT, surpassing the Ethereum mainnet by approximately 8% in terms of TVL.

Tether, one of the first fiat-backed stablecoins in the crypto market, was initially launched on the Bitcoin Omni chain, later expanded to Ethereum and is currently available primarily on Tron and Ethereum.

One notable difference is in the composition of stablecoins on Ethereum, which, while more balanced on-chain USDT and USDC, dominate the former Tron ecosystem.

This dominance is even more evident in Tron contracts, where the USDT Token contract uses the majority of on-chain “power”, accounting for approximately 95.6% of contracts. This shows that Tron is primarily used for USDT transactions with limited diversification.

In the year Despite the slight increase in the amount of USDT in 2023, a particularly interesting trend is that data compiled by TronScan shows that the number of USDT holders has grown by 130% over the same period.

Tron's DeFi Renaissance

The Tron ecosystem has seen back-to-back exploits. Poloniex, the crypto exchange founded by Justin Sun, was hacked in November last year. The attackers reportedly stole around $125 million after breaching the hot wallet.

Weeks later, crypto exchange HTX and blockchain protocol Heco Chain were hacked for $97 million in various digital assets.

Despite this, Tron's decentralized financial side remained stable.

Citing data from DeFillama, Reflexivity sees TVL on the Tron blockchain grow by an estimated 43 percent in the second half of 2023, to a total of around $8.1 billion.

This increase makes Tron's position the second highest protocol in terms of TVL, behind Ethereum at about $29 billion and ahead of Binance Smart Chain (BSC) at $3.1 billion. The transition is primarily driven by the core DeFi protocol, JustLend, which contributes about 80% of the total TVL on the Tron network.