Despite the redemptions, $USD1 maintained its dollar peg throughout the period examined by Onchain Benchmark, trading between $0.998 and $1.000. The researchers found no evidence of a sustained depegging event, indicating that the decline in circulating supply was not accompanied by a significant loss of the token’s dollar value.
Source: CoinGecko
$USD1 supply decline outpaces major stablecoins on Ethereum
According to Onchain Benchmark, Ethereum accounted for $184.60 million in net $USD1 redemptions across 63 token burns between Oct. 6 and Oct. 15. $BNB Chain recorded $200.43 million across 12 burns.
On Ethereum, more than 99% of tokens sent for redemption passed through a wallet labeled BitGo, $USD1’s current issuer and custodian, while the $BNB Chain transfers from the unidentified address were made in batches of $30 million to $50 million.
The reductions were not offset by new issuance on Solana, where $USD1 supply remained unchanged at about $1.42 billion during the nine days reviewed by Onchain Benchmark.
“The next tests come with the change of issuer. When World Liberty’s trust company opens, it will take on a token whose size depends on the decisions of a few large holders, under a charter whose legal footing is being argued in court,” Onchain Benchmark said. “Whether fresh mints on Solana, or anywhere else, rebuild the total, or October marks the size $USD1 carries into its new issuer, is the question the next weeks of supply data will answer.”
Transfers between Ethereum and $BNB Chain totaled less than $1 million, according to the report, suggesting the missing supply wasn’t simply shifted between those networks.
$USD1’s supply contraction on Ethereum was steeper than that of several other US dollar-denominated stablecoins between Oct. 6 and Oct. 15. $USD1 supply on the network fell 11.45%, compared with declines of 4.93% for USDe, 2.18% for USDC and 0.76% for circulating USDT.
