An analysis by crypto market data provider Kaiko found that USD Coin (USDC) is currently the most liquid stablecoin on centralized exchanges (CEX), with around $38 million in bids preventing a price deviation of 0, 1% of assets.
USDC liquidity is followed by that of Tether (USDT), Binance USD (BUSD), True USD (TUSD), and Dai (DAI). Data compiled by Kaiko includes bid-side depth of 0.1% across all markets that use USDC as a base asset.
USDC – most liquid on CEX
Kaiko noted that if stablecoin issuers like Circle and Tether ensure that their tokens maintain peg, unpecking could still occur in spot markets. This has made stable spot markets essential for price discovery.
“Theoretically, stablecoin issuers maintain their peg. However, unpecking can still happen in spot markets, especially considering that #USDT redemptions start at $100,000. Stablecoin spot markets are therefore extremely important for price discovery. This data aggregates a bid-side market depth of 0.1% across all markets that include the stablecoin as a core asset,” Kaiko said.
The latest development is significant for USDC, as USDT has always been in the lead. At the start of the year, USDC and DAI had very little use of CEX. They were mainly traded within the decentralized finance (DeFi) ecosystem, according in Kaiko.
Towards the end of the first quarter of 2023, a potential US banking crisis caused the USDC to lose parity with the dollar and fall 13% to levels below $0.88. However, the stablecoin has stabilized and is striving to stay within the $1 price range, according to data from CoinMarketCap.
Coinbase raises USDC rewards to 4%
USDC’s dominance over CEX can be attributed to crypto exchange Coinbase increasing rewards with the asset at 4%. The trading platform announcement in a June 15 tweet, it increases its incentive for USDC holders from 2% to 4%, a move aimed at attracting more users and strengthening its market position.
Meanwhile, USDT, now the second most liquid stablecoin on centralized exchanges with around $26 million in bids, traded below the $1 price range during the week. The asset was worth $0.99 at the time of writing, according to data from CoinMarketCap, due to the ongoing Curve-Aave loan saga.
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