Circle is aggressively expanding the appeal and accessibility of its USDC stablecoin. As a result, it has become the second-biggest pegged currency by market cap in recent months, pushing its market capitalization to over $42 billion. Bringing native support for USDC to the Avalanche ecosystem introduces new opportunities and can take decentralized finance into the mainstream.
Circle Pursues More Efficient Blockchains
The cryptocurrency industry is home to over a dozen stablecoins today, most of which maintain a peg to the US Dollar. Tether’s USDT is still the most popular asset by market cap, although it faces stiff competition from Circle’s USDC. In recent years, USD Coin has noted strong adoption and demand, elevating its market capitalization to over $40 billion. That means over 40 billion USDC are liquid on the market, a number that is far higher than most people ever expected.
However, the ongoing growth of USDC Coin highlights the need for alternative ecosystems. More specifically, alternative ecosystems that are faster and cheaper to use and provide future scalability. Unfortunately, none of those aspects apply to Ethereum, even though it is home to thousands of assets and hundreds of projects, even if users pay over $20 for a transaction somewhat regularly.
Circle acknowledges there is tremendous room for growth in the blockchain world by bringing native USDC to various ecosystems. The currency resides on Ethereum Solana, Tron, and a few other blockchains. The recent addition of Avalanche is an intriguing one, as Avalanche’s benefits include a throughput of up to 4,500 transactions per second. Moreover, it is the fourth-largest blockchain for decentralized finance today, solidifying its market position.
Another reason for Circle to explore Avalanche is its recently launched $200 million incubation fund for decentralized finance. Stablecoins play an essential role in the DeFi industry today, and native minting and redemption of USDC through Avalanche will enhance the ecosystem’s appeal.
Avalanche DeFi Grows Substantially
Speaking of decentralized finance on Avalanche, the ecosystem now spans over $12.3 billion in Total Value Locked. That value keeps rising month over month thanks to major DeFi protocols exploring this blockchain, including Aave, Curve, Multichain, etc. Moreover, Avalanche has various prosperous native protocols, like Benqi, Trader Joe, Wonderland, and others.
All the DeFi protocols on this chain can benefit greatly from the introduction of USDC. A solution like Benqi, which provides non-custodial liquidity market solutions for decentralized finance, can gain broader adoption through the world’s second-biggest stablecoin by market cap. Its lending and borrowing services and even liquid staking can all gain more momentum through USDC support.
The same will apply to the various protocols on Avalanche today. Stablecoins like USDC have tremendous appeal and market potential and can bring more mainstream attention to DeFi and the Avalanche ecosystem. There are still many opportunities to explore in this industry, and efficiency, a high throughput, and low fees will all play a crucial role in further proceedings.