Stablecoin Supply Grew By 388% this Year, Driven by DeFi and Derivatives

The market for stablecoins experienced breakneck growth in 2021, with the supply for dollar-backed cryptocurrencies surging by 388%, according to data compiled by The Block Research. From a report: As indicated by The Block Research's 2022 Digital Asset Outlook report, the aggregate supply of stablecoins has increased from $29 billion at the start of 2021 to more than $140 billion. That growth benefited a swathe of stablecoins, including tether (USDT) and USD coin (USDC), which is managed by a consortium that includes Circle and Coinbase.

Several factors contributed to the surge in the outstanding supply of stablecoins, which historically have been used by high-speed crypto trading firms as a way to dampen volatility when trading between different cryptocurrencies. Over the course of 2021, retail traders parked stablecoins on decentralized finance protocols as a way to tap into juicy yields. The growth of the derivatives market was another tailwind. Most derivatives venues settle futures contracts in stablecoins, noted Tether's Paolo Ardoino.

That's what

[Tablizer]

Mr. Ed buys.

Re:[Stablecoin is] what

[shanen]

But "no one can talk to a horse, of course." Mod parent funny, though it took me a few seconds to decode the joke because of the apparently vacuous Subject. (Still a nice FP.)

And 388% growth is NOT stable. Someone needs to be sued for non-truth in advertising?

My imaginary number can beat up your imaginary cryptocurrency! Hey, that's what we need. A new cryptocurrency based on imaginary numbers! And fractals, too. It's always prettier with fractals! I'm gonna be SOOOO stinking rich!

(Now I'm wondering if they

Re:

[DarkOx]

how do you know? 388% increase in tokens would be entirely stable if there was a 388% increase in the alternative capital backing them..

I don't believe that is the case mind you, but I have no proof.

In the case of tether we have proof

[rsilvergun]

They got caught and paid a fine. The insane thing is is that it didn't seem to change anyone's opinion of tether.

Re:

[Admiral Krunch]

They got caught and paid a fine. The insane thing is is that it didn't seem to change anyone's opinion of tether.

That's way too common in banking...
It probably gave them extra credibility.

It came out that tether

[rsilvergun]

The Big kahuna and stable coin isn't actually backed by dollars the way they claimed. They paid a paltry fine and continued business as usual. Tether is basically the underpinnings of the entire cryptocurrency market because it's used to exchange dollars for currency as the starting point for other cryptocurrency purchases. Finding out the creators have been lying about their capital should have said the entire cryptocurrency market into a nosedive. The fact that it didn't shows you how well and truly screw

Re:

[shanen]

My imagination is pert' strong. But I can't imagine how cryptocurrencies could be MORE screwed up that I already imagine.

But I actually doubt the "entire cryptocurrency market" can crash because it's like throwing balloons at a wall. Air-filled balloons, not balloons of water, which would be more interesting. I don't know of any cryptocurrency with as much substance as a water balloon.

It could easily collapse

[rsilvergun]

If the gov't regulates it like banks that'll chase out enough money launders. The value there is speculation, but what brought the speculators was a vibrant trade from money launders. They provide a "floor" that prevents a run on the exchanges by the speculators from dropping the value much below 50% of whatever the current base line is (based on total volume of transactions for laundered money). The recent recovers are because some of the more corrupt governments have gotten into crypto so their leaders ca

Re:

[shanen]

Mostly concurrence, though I must note that balloons are cheap and easy. Minor gripe with "launders" versus "launderers", but your intention was clear enough. Your final point is rather deep, though it's not clear if you appreciate the depth. The Internet was supposed to bring "the truth" to all of us, but instead it's largely being used to demolish the very concepts of "truth" and objective reality. That actually loops back to the fantasy-based values of cryptocurrencies and most stocks.

"DeFi" = "Deregulated Finance"

[Anonymous Coward]

Don't let the crypto bois fool you: "DeFi" means "Deregulated Finance", not "decentralized" as they're trying to pass it off as.

The crypto bros all want to wrestle control away from governments, and do it without any oversight, and hence no accountability. Why else do you think they're all throwing a fit whenever the specter of regulation comes up (you know, the thing all legitimate currencies have to adhere to?)

Re: "DeFi" = "Deregulated Finance"

[Splyncryth]

Exactly. Iâ(TM)ve talked to a small handful of contract programmers and none of them were able to explain to me protections employed on their coin to prevent fraud, exploitation, and coercive manipulative purchasing and selling practices. I had one tell me straight up I didnâ(TM)t know what I was talking about. I pulled up five crashed and exploded cryptocurrencyâ(TM)s that had their money stolen in the past 30 days. She told me those are all shit coin and those donâ(TM)t really count!

Re:

[cayenne8]

Don't let the crypto bois fool you: "DeFi" means "Deregulated Finance", not "decentralized" as they're trying to pass it off as.

The crypto bros all want to wrestle control away from governments, and do it without any oversight, and hence no accountability. Why else do you think they're all throwing a fit whenever the specter of regulation comes up (you know, the thing all legitimate currencies have to adhere to?)

You sound as if you think that's entirely a bad thing or something...?

There's a lot of folks

We don't let adults make decisions about money

[rsilvergun]

When those decisions can have a knock-on effect on the broader economy. It's the same reason we don't let adults make decisions on wearing seatbelts or driving the speed limit. We regulate what adults can do because there's a substantial number of imbeciles out there and when a significant number of them are taken advantage of it can crash the economy for those of us who aren't. Never mind the people who aren't idiots but are just willing to gamble. It's terrifying to think the scale of money being tossed a

Re:

[swiftverdict]

Cope and seethe faggot.

Of course you're a troll!

[Anonymous Coward]

I knew you wouldn't be able to resist [slashdot.org] trying to have the last word.

Of course you're a troll, just like I am (see? At least I can admit to it!) - but the fact that you try to claim that you're not, or that (gasp!) you actually, truly believe you're not, makes you a troll of the more insidious kind: a closet troll! [slashdot.org]

But, fell free to prove me wrong by being the better person: by using your full real name, or linking your profile's homepage to something actually identifiable. Oh, and do prove your riches too wh

Re:

[swiftverdict]

Don't let the crypto bois fool you: "DeFi" means "Deregulated Finance", not "decentralized" as they're trying to pass it off as.

You're joking right? A simple search for 'defi' on any search platform will bring up a plethora of articles referring to defi as decentralized finance. Cope and seethe.

Where have I heard this before?

[NoMoreDupes]

Driven by DeFi and Derivatives

Hmmm.. "derivatives".. that sounds familiar... around some crash that happened about a decade ago..

Wall Street Bro's...

[VeryFluffyBunny]

...are gonna take you to the cleaners if you believe their claims about being backed by real dollars. This stuff ain't regulated so you're badly exposed.

*NOT* a scam

[Lisandro]

Those billions minted out of thin air? Nothing to see here, please move along...

So apparently Tether/Bitfinex became the private entity with (by far) largest cash reserves in the world, but they're not allowing a single audit on them.