Author: Will Awang; Source: Web3 Xiaolu
In the early days, the growth of stablecoins was measured by the total supply (Supply), and the key challenge was the trust behind it: which issuers are credible, compliant and have the ability to expand. I believe that with the introduction of the US Genius Act, this problem will be solved soon.
With the standardization of issuance, the stablecoin market has entered the next stage - from issuance to distribution (from Mint to Distribution).
The days of issuers making amazing profits are numbered - distributors are beginning to realize their leverage and get their due share of value. This has been well answered in Circle's prospectus.
Given this shift, it is becoming increasingly important that we first understand which applications, protocols, and platforms are achieving real growth, especially for those on-chain stablecoin scenarios that are already relatively mature in the crypto market.
Last week, we compiled Artemis: First-line data from stablecoin payment adoption, starting from the stablecoin scenario of off-chain payments, to look at the potential and path of stablecoins linking traditional finance.
Today, we continue to delve deeper into the stablecoin research report Artemis, The Future of Stablecoins, Usage, Revenue, and the Shift from Issuers to Distribution, focusing on stablecoin use cases related to on-chain activities, because each use case has its unique background and practice, and at the same time, it is also possible to observe the value capture trend in the dynamic market changes on the chain.
Although the market value of stablecoins has reached 240 billion US dollars and the annual trading volume has reached 3.1 trillion US dollars, there are many misunderstandings about their popularity. On the one hand, in order to expand the market, issuers do not hesitate to pay high fees to distributors. For example, Circle paid $900 million to distributors such as Coinbase in 2023, accounting for more than half of its revenue, in order to attract users to use USDC.
On the other hand, the so-called $3.1 trillion annual trading volume is extremely misleading, of which 31% is contributed by MEV robots through thousands of daily cycles, repeatedly using the same funds. The actual trading volume actually participated by humans is far lower than the scale implied by the surface data.
In addition, there is an over-concentration of wealth in the stablecoin field that is little known. Although there are currently 150 million stablecoin wallets, 99% of the wallets have a balance of less than $10,000, and only 20,000 mysterious wallets control $76 billion, accounting for 32% of the total supply. These wallets are neither exchanges nor DeFi protocols, and are reported as "gray areas", and the meaning behind them is still unclear.
It is worth noting that the real explosive growth of stablecoins has been in the past six months. Since the summer, the volume of DeFi stablecoin transactions has soared from $100 billion to $600 billion. At the same time, meme coin transactions alone have generated $500 billion in stablecoin traffic, accounting for 12% of annual transactions.
However, the criteria we use to measure the success of stablecoins are reversed. A decline in total locked value (TVL) may not be a decline in usage, but may be a reflection of technological progress and efficiency improvement, while an increase in trading volume may simply mean an increase in robot activity. There are fundamental problems with each of the indicators we use to track adoption.
While people are still arguing about the market share of USDC and USDT, the real change is actually happening quietly at the distribution level. As a result, it may lead to a reshaping of the entire stablecoin ecosystem value chain.
In just a few years, stablecoins have evolved from experimental products to indispensable financial tools, and their product-market fit is beyond doubt. But now, we have entered a new era where issuance and liquidity alone are not enough to bring sustained growth. The next phase of stablecoin adoption will involve new factors, including sharing economic benefits with partners, ease of on-chain and off-chain integration, and the extent to which programmable features are utilized.
--Jelena Djuric, co-founder and CEO of Noble
1.1 Behind the 240 billion supply
Stablecoins have become one of the most widely used products in the crypto space, with a supply of more than $240 billion and an annual on-chain transaction volume of more than $7 trillion, comparable in size to traditional payment networks, but many of the numbers are worth digging into.
Supply reflects the amount of stablecoins that exist, not how much they are used, where they flow, or what they are used for. Meanwhile, volume reflects a mix of on-chain manual activity and bots, but cannot capture off-chain data.
1.2 Usage is a new signal
Not all stablecoins are in a state of efficient value circulation. Some stablecoins are dormant as node verification or staking, while others are key drivers of cross-platform, cross-user, and cross-regional real economic activities.
As described in "The State of Stablecoins in 2025", we see clear differences between stablecoins in different ecosystems. Stablecoins on Ethereum are often used as DeFi collateral and transaction liquidity, while stablecoins on TRON are more commonly used for remittances and payments in emerging markets. USDC has a higher share of institutional capital flows, while USDT thrives with its coverage and accessibility.
These usage patterns not only reflect the flow of value, but also provide builders with opportunities to target underserved or high-growth niches.
Understanding the application scenarios of stablecoins and their functional utility is the clearest signal for considering stablecoins at present, indicating where stablecoins are truly adopted and where the next wave of innovation will emerge.
Stablecoins will grow further, and regulatory clarity is opening the door for institutional investors. The next stage of stablecoins is not only about who has scale, but also about the business model of all participants in the stablecoin supply chain, including issuers, distributors and holders. In the next 12-24 months, we will definitely see changes and challenges in the value chain and value capture.
——Martin Carrica, Vice President of Stablecoins at Anchorage Digital
2.1 Historical Value of Issuers
In the early days of stablecoins, value capture was primarily focused on issuers. Maintaining a 1:1 peg at massive scale is a difficult problem that few issuers have been able to solve well.
Tether and Circle have been able to dominate not only because they were first movers, but also because they are among the few issuers that can consistently manage the complex tasks of large-scale issuance and redemption, managing reserves, integrating with banking partners, and withstanding market stress.
Monetizing reserve earnings (primarily short-term U.S. Treasuries and cash equivalents) can translate even modest interest rates into huge revenue. Meanwhile, early successes are compounding: exchanges, wallets, and DeFi protocols built around USDT and USDC reinforce the network effects of issuance and liquidity.
2.2 Distribution as an Important Value Layer
Trusted custody, liquidity, and redemption are no longer differentiators, but expectations. As more and more issuers with similar capabilities enter the market, the importance of the issuer itself gradually decreases.
What matters is what users can do with stablecoins. As a result, the dominance of stablecoins is shifting from issuers to distributors.
Distributors
Wallets, exchanges, and applications that integrate stablecoins into real-world use cases now have both influence and leverage. They control user relationships, shape the user experience, and increasingly determine which stablecoins get attention.
And they are monetizing this position. Circle’s recent IPO filing shows that it paid nearly $900 million to partners such as Coinbase to integrate and promote USDC, more than half of its total revenue in 2023.
Note that the current situation is that the issuer pays the distributor, not the other way around.
Many distributors are further improving their platform architecture. PayPal launched PYUSD; Telegram cooperated with Ethena; Meta is exploring stablecoin channels again; fintech platforms such as Stripe, Robinhood and Revolut are embedding stablecoins directly into payment, savings and trading functions.
Issuers are not standing still either. Tether is building wallets and payment channels. Circle is developing a full stack through payment application programming interfaces (APIs), developer tools and infrastructure acquisitions, while launching the Circle Payment Network in the hope of forming a network effect.
But it’s clear that distribution is now the strategic high ground.
We are in the midst of a tectonic shift: a shift in perspective, where stablecoins are no longer viewed as “cryptocurrency” but as “global infrastructure”; a shift in utility, where financial institutions are taking advantage of these new rails to actively reshape their offerings; and a changing playing field.
—Ran Goldi, Senior Vice President of Payments and Networks at Fireblocks
2.3 Build Programmability and Precision
As stablecoins gain popularity, new infrastructures are emerging—infrastructures designed to enable programmability, compliance, and value sharing. Issuance alone is no longer the key. To remain competitive, stablecoins must be able to adapt to the needs of the platforms that drive usage.
The next generation of stablecoins includes programmable features such as cross-checking capabilities, compliance rules, and conditional transfers. These features enable stablecoins to act as application-aware assets, automatically routing value to merchants, developers, liquidity providers (LPs), or affiliates without the need for off-chain protocols.
Each use case has its own unique context. Remittances prioritize speed and conversion, DeFi requires composability and collateral flexibility, and FinTech integrations require compliance and auditability. The emerging infrastructure stack is designed to meet these diverse needs, enabling the stablecoin layer to dynamically adapt to its environment rather than providing a one-size-fits-all solution.
Crucially, this infrastructure shift enables more precise value capture. Programmable flows mean that value can be shared across the stack, not just hoarded by the issuer. Stablecoins are becoming dynamic financial primitives, influenced by the incentives and architecture of the ecosystem in which they exist.
As the value capture of stablecoins moves downstream, it is the distributors who define their actual use.
Wallets, exchanges, fintech applications, payment platforms, and DeFi protocols determine which stablecoins users can see, how they interact with them, and where they create utility. These platforms shape the user experience and control the demand side of the stablecoin economy.
Analyzing the actual use of stablecoins in areas such as payments, savings, trading, DeFi, and remittances can reveal who is creating value, where the friction points are, and which distribution channels are effective. This report focuses on stablecoin use cases related to on-chain activities. By tracking the flow of stablecoins across wallets and platforms, etc., we can gain insight into the infrastructure and incentive mechanisms that influence their adoption.
Among these known (also called "marked") participants, the current use of stablecoins is mainly concentrated in three main environments:
1. Centralized exchanges
2. DeFi protocols
3. MEV
The following table shows the supply and trading volume share of each category in April 2025:
These three types of addresses together account for 38% of the total stablecoin supply and 63% of the total stablecoin trading volume.
Untagged addresses account for the majority of the remaining supply and transaction volume. These wallets are not directly associated with well-known institutions, exchanges, or smart contracts. We will explore the trends of untagged addresses later in this report.
3.1 Overview of the overall stablecoin market
Total stablecoin supply: US$240 billion
Total stablecoin trading volume in the past 30 days: US$3.1 trillion
Reserve income: US$10 billion
A. Supply
Most stablecoin supply is concentrated in centralized exchanges, with Binance occupying a considerable lead. DeFi protocols and issuers also have a considerable share.
B. Volume
Since the summer of 2023, the total trading volume of stablecoins has steadily climbed, with abnormal surges when market activity is high. DeFi saw the highest volume growth, while MEV and untagged wallets saw high but volatile volumes. Entities with the highest stablecoin volumes tend to be centralized exchanges, followed by DeFi and issuers. CEX volume does not reflect trading on CEX platforms, as most trading occurs off-chain. Instead, it reflects user deposits and withdrawals, inter-exchange transfers, and internal operational activities. 3.2 Centralized Exchanges (CEXs) Centralized exchanges anchor stablecoin supply, which accounts for a large portion of the circulation in the ecosystem. In terms of trading volume, DeFi protocols and MEV-driven participants are currently the most active, highlighting the growing role of on-chain applications and composable infrastructure.
Total stablecoin supply: 27%
Total stablecoin trading volume in the past 30 days: 11%
Reserve income: $3 billion
Supply on top centralized exchanges (CEXs) has almost doubled since the local lows in 2023. Coinbase, Binance, and Bybit's supply tends to fluctuate with the market, while Kraken and OKX's supply has grown more steadily.
It is difficult to obtain specific data on how stablecoins are used by centralized exchanges (CEXs) because most of the activity occurs off-chain (centralized ledger). Funds are often pooled together and their specific uses are rarely disclosed. This opacity makes it difficult to assess the comprehensiveness of stablecoin usage within centralized exchanges (CEXs).
Stablecoin trading volume attributed to centralized exchanges (CEXs) reflects on-chain activity related to deposits, withdrawals, inter-exchange transfers, and liquidity operations, rather than internal trading, margin collateralization, or fee settlement. Therefore, it is best viewed as an indicator of user interaction with the exchange rather than a measure of total trading activity.
3.3 Decentralized Finance (DeFi)
Total stablecoin supply: 11%
In the past 30 days, the total stablecoin trading volume: 21%
Reserve income: US$1.1 billion
The supply of DeFi stablecoins comes from collateral, liquidity provider (LP) assets, and lending markets, decentralized exchanges (DEX)
DeFi stablecoins have grown monthly volume from ~$100 billion to over $600 billion in the past six months, driven by significant growth in decentralized exchanges (DEXs), lending markets, and collateralized debt positions (CDPs).
DEXs have seen a significant drop in their share of supply, not because of a drop in DEX usage, but because DEXs are more capital efficient. With Hyperliquid’s popularity, the supply locked in perpetual swaps has increased significantly recently.
DeFi stablecoins have grown monthly volume from ~$100 billion to over $600 billion in the past six months, driven by significant growth in decentralized exchanges (DEXs), lending markets, and collateralized debt positions (CDPs).
In the DeFi field, stablecoins are used in the following key areas:
DEX funding pool
Lending market
Asset-backed claims
Others (including perpetual contracts, cross-chain and pledge)
Each field uses stablecoins differently - whether as liquidity, collateral or payment method - which will affect user behavior and the economic benefits of the protocol layer.
Concentrated liquidity, stablecoin-centric DEX, and cross-protocol composability reduce the need for DEX to maintain high stablecoin floats.
Most of the stablecoin trading volume in DeFi comes from DEX. The share of DEX in total trading volume fluctuates with market sentiment and trading trends, and memecoin's trading volume has recently soared to more than $500 billion, accounting for 12% of total trading volume.
B. Lending Markets
Although the lending business has fallen from its peak, Aave has shown a strong recovery momentum, and new protocols such as Morpho, Spark and Euler have also gained attention.
C. Collateralized Debt Positions
MakerDAO continues to manage one of the largest stablecoin pools in DeFi, with DAI adoption increasing, driven by high savings rates. They hold billions of dollars in stablecoins and play a key role in maintaining DAI's peg to the US dollar.
D. Others
Stablecoins also play a key role in supporting DeFi derivatives, synthetic assets, perpetual contracts, and trading protocols.
Over time, the supply of stablecoins rotates between various perpetual contract protocols, currently concentrated on Hyperliquid, Jupiter, and Ethereal.
3.4 MEV Miners / Node Verification
Total stablecoin supply: < 1%
Over the past 30 days, total stablecoin trading volume: 31%
Reserve income: /
MEV robots extract value by reordering transactions. Their high-frequency behavior leads to an excessively high share of on-chain transactions, and they often reuse the same funds.
The above chart separates MEV-driven activity to distinguish between bot volume and manual volume. MEV volume surges with peak volume periods and fluctuates as blockchains and applications try to counter MEV strategies.
Predicting revenue for high-volume, low-float use cases like MEV is not as simple as predicting high-float use cases. Predicting reserve yields is less applicable here, but these use cases can adopt various monetization strategies, such as transaction fees, spread capture, embedded financial services, and monetization of specific applications.
3.5 Unattributed Wallets
Total stablecoin supply: 54%
Total stablecoin trading volume in the past 30 days: 35%
Reserve income: $5.6 billion
Stablecoin activity in unattributed wallets is more difficult to interpret because the intentions behind transactions must be inferred or confirmed through private data. Even so, these wallets account for the vast majority of stablecoin supply and often account for the vast majority of trading volume.
Unlabeled wallets include:
Retail users
Unidentified institutions
Startups and SMEs
Dormant or passive holders
Smart contracts that have not yet been classified
Although attribution models are imperfect, these "gray area" wallets account for an increasing share of real-world payment, savings, and operational processes, many of which do not fully match traditional DeFi or trading frameworks.
Some of the most promising use cases are emerging, including:
P2P Remittances
Startup Treasury Management
Individual USD Savings in Inflationary Economies
Cross-border B2B Payments
E-commerce and Merchant Settlements
In-game Economies
These emerging use cases are expected to expand rapidly as regulatory clarity improves and payments-centric infrastructure continues to attract capital, especially in regions underserved by traditional banks.
Related content can be found: Artemis: Frontline data from stablecoin payment adoption
For now, we will focus on the following high-level trends:
Despite the large number of unattributed wallets (over 150 million), the balances of the vast majority of wallets are negligible. More than 60% of unattributed wallets hold less than $1 in stablecoins, and there are less than 20,000 wallets holding more than $1 million in stablecoins.
When we shift the focus to each wallet balance, the situation is completely reversed.
The number of unvested wallets with balances over $1 million is less than 20,000, holding a total of more than $76 billion, accounting for 32% of the total stablecoin supply.
At the same time, wallets with balances below $10,000 (accounting for more than 99% of unvested wallets) hold a total of $9 billion, less than 4% of the total stablecoin supply.
Most wallets are small, but most unvested stablecoins are in the hands of a small number of high-value groups. This distribution reflects the dual nature of stablecoin use: a broad grassroots user base on the one hand, and a high concentration of institutional or whale users on the other.
The stablecoin ecosystem has entered a new phase, and value will increasingly flow to those who build applications and infrastructure.
This marks a critical maturity of the market, with the focus shifting from the currency itself to the programmable systems that make the currency work. With the improvement of regulatory frameworks and the proliferation of user-friendly applications, stablecoins will usher in exponential growth. They combine the stability of fiat currencies with the programmability of blockchains, making them the cornerstone of future global finance.
The future of stablecoins belongs to those builders who create applications, infrastructure, and experiences that unlock their full potential. As this shift accelerates, we can expect more innovation in how value is created, distributed, and captured across the ecosystem.
The future financial world will be defined not just by stablecoins, but by the ecosystem that forms around them.
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