Circulation Grows Across Solana, Ethereum Layer 2s

Circle’s USDC has skilled a major resurgence as its complete circulating provide surged by 80% from its 2023 lows.

As revealed by Blockwork’s information analytics supervisor Dan Smith, the stablecoin’s provide has reached almost $44 billion as of January 2, 2025. The most recent determine represents a stark improve from its 2023 low of lower than $24 billion.

USDC’s Blockchain Range Expands

The most recent data reveals that Ethereum continues to dominate with 65% of USDC’s provide. Nevertheless, different blockchains, together with Solana and Base, maintain 10%, and seven% of its provide respectively. Hyperliquid and Arbitrum adopted swimsuit, capturing 5% and three% of USDC’s rising share of provide, respectively.

This diversification can also be in distinction to the 2023 interval when Ethereum accounted for 85% of the provision. The shift seems to be fueled by retail merchants migrating to a less expensive different – Solana –  for speculative buying and selling on meme cash and AI agent tokens.

Moreover, the rise of Layer 1 networks like Hyperliquid, designed for low-latency buying and selling, and Ethereum Layer 2 options, similar to Base and Arbitrum, evidenced the evolving preferences of crypto customers.

This aligns with the stats posted by Circle’s Peter Schroeder, which revealed that the adoption of USDC on Ethereum Layer 2 options skyrocketed in 2024, with provide leaping from $1.9 billion to $8.1 billion. Base led the expansion with a 26x improve, adopted by a 4x rise on Arbitrum.

The Ethereum Dencun upgrade in March additional ramped up scalability and diminished transaction charges under $0.01. In the meantime, the overall USDC transaction quantity exceeded $15 trillion through the yr. Solana started 2024 because the chief in USDC transactions however noticed exercise decline as a consequence of diminished MEV bot utilization by market makers. Then again, Base’s momentum grew steadily, resulting in transaction volumes over the past 4 months of the yr. By the tip of the yr, USDC had recorded greater than 100 million distinctive transactions.

USDC Rebounds

At present, USDC is trailing behind Tether (USDT), which dominates the market by market capitalization. USDC and USDT almost reached parity in 2022, however the former declined, coinciding with the Collapse of Silicon Valley Financial institution (SVB), the place Circle held reserves.

The lack of the greenback peg was triggered when the fintech agency revealed that $3.3 billion – roughly 8% of its reserves – had been in danger. Nevertheless, market confidence rebounded as USDC restored its peg inside 4 days.