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PYUSD Market Cap exceeds 1 billion US dollars, rising to 6th in Stable Coin Market Cap. Will PayPal ignite the encryption market?
Author: Bubble
Editor: Frank
The USD Stable Coin PYUSD Market Cap issued by global payment giant Paypal has surpassed the $1 billion mark. At the beginning of 2024, the PYUSD market cap was only $234 million, but on August 27th, the market cap broke through the $1 billion mark. In just over 7 months, the PYUSD market cap has risen by 327%, with a very rapid growth rate.
What is the concept of a $1 billion volume in the Stable Coin market? According to the data from the defillama platform, PYUSD Market Cap ranks 6th after USDE, FDUSD and other stablecoins in the Stable CoinMarket Cap ranking.
According to the recent rise, PYUSD may well break into the TOP3 of the Stable Coin Market Cap by the end of this year, which is not impossible.
From the rise trend data of PYUSD, its market capitalization mainly comes from the last two months. What factors exactly led to the big pump of PYUSD Market Cap in the last two months?
From the time Node perspective, the past two months have been a time Node of rapid rise of Solana on-chain PYUSD from issuance. The reason why the PYUSD Market Cap has risen so rapidly is mainly due to the high incentive strategy launched by PYUSD on the Solana public chain recently. The rapid rise of PYUSD comes from the subsidy of real money and the expansion of application scenarios. For example, the stake annual yield (APY) of PYUSD in the Kamino stake project in the Solana ecosystem can currently reach 10% or more.
And on the marginfi platform, the stakeAnnual Percentage Rate (APY) of PYUSD also exceeds 10%.
If we estimate based on the current on-chain TVL and APY of PYUSD, PYUSD needs to pay users up to millions of dollars in Interest every month due to incentive activities.
And who is responsible for this huge Interest?
Some people think it's the Solana Foundation, because they can strive to bring PYUSD to the Solana blockchain for issuance and the development of the SOL ecosystem, but that's not the case.
The person in charge of the Solana Foundation, as well as Kyle, managing partner of Multicoin, have made it clear that the Solana Foundation did not pay any incentives, so the Interest payment for this PYUSD incentive activity naturally comes from the issuance party of PYUSD, Paypal company. Such a high APY yield has also made PYUSD on the Solana public chain surpass Ethereum in mid-August, becoming the largest stablecoin issuance platform on the PYUSD Stable Coin public chain.
Currently, PYUSD has only been issued on the Ethereum and Solana blockchains. PYUSD began issuance on the Ethereum blockchain in August of last year and on the Solana blockchain on May 31st of this year. Although Solana was 9 months late to the game, the Solana version of PYUSD currently holds a market share of 63.61%, nearly twice that of the Ethereum version of PYUSD.
PYUSD chose Solana as the main issuance platform, mainly because of the advantages of the Solana public chain. For example, the gas fee of the Solana public chain is very low, and the transaction confirmation speed is much faster than that of the Ethereum public chain. In addition, the Solana public chain also provides many extension functions suitable for today's Web2 business environment.
For example, compared to the Ethereum public chain, Paypal has also introduced some new features to provide a better user experience when deploying PYUSD on Solana.
Functions such as confidential transfer (merchants can choose the confidentiality of the transaction amount), transfer hooks (similar to plugins), and remarks fields (users can add transaction information when making payments).
These functions not only play a role in adding icing on the cake, but also are more in line with the payment scenarios in the current business environment, which is conducive to promoting the large-scale commercial application of PYUSD.
In fact, Stable Coin PYUSD and Solana blockchain have a relatively deep relationship.
According to reports from Wu, PayPal had planned to collaborate with FTX in 2022 to issue PYUSD on Solana. The two parties had already signed the relevant cooperation protocol, but it was suspended later due to the collapse of FTX.
With the continuous development of blockchain technology and the global compliance of Cryptocurrency, Web3 payment will be a major trend in the future, enabling people to get closer to realizing their payment desires: fast, inexpensive, and global payments. This will be the new generation of financial/payment infrastructure, and payment platforms can leverage Stable Coin payment functions to allow everyone to pay according to their own wishes.
Moreover, in the Cryptocurrency ecosystem, issuance of Stable Coin is a highly profitable business, with returns far exceeding those of most Cryptocurrency trading platforms. The income generated from USDT issuance by Tether, a Stable Coin issuer, has already surpassed that of many tech giants. Therefore, more and more financial giants are starting to enter the encryption Stable Coin market, and PayPal is one of them.
As a global payment giant, Paypal already has a large market share in the Web2 payment field. The issuance of Paypal PYUSD is not only for the consideration of lucrative profits from stablecoin, but more importantly, it is a strategic layout. As a payment giant, Paypal not only needs to continuously expand its market share in the Web2 payment field, but also needs to expand its influence in the Web3 payment field in the future. In the Web3 payment field, Paypal has already taken the lead.
Unlike stablecoin issuers such as Tether, PayPal is already a huge commercial empire in the Web2 world, with a global user base of 400 million. At present, PayPal supports 200 countries and 25 currencies globally, with a wide range of commercial applications.
Paypal can use its resource advantages to quickly expand the application scenarios of Stable Coin PYUSD, such as e-commerce payments, etc., this The push of Paypal to seize the Web3 payment market is enormous. Moreover, the widespread application of PYUSD stablecoin can also promote the large-scale application of blockchain technology.
Currently, PYUSD is only issued on the Ethereum and Solana blockchains, and will be issued on more blockchains in the future.
Blockchain technology has been around for more than a decade, and cryptocurrency payments have reached a critical moment in history, full of potential and opportunities, just like the internet in 2000.
As a global payment giant, just as it brought payments to the Internet before, Paypal is now leading payments into a new era of blockchain by bringing payments on-chain.