Author: Artemis
Compiled by: Will Awang
Whether stablecoins can reshape the global financial landscape is no longer a YES / NO question but rather a question of HOW they will be reshaped.
In the early stages, the growth of stablecoins was measured by total supply, with the key challenge being the trust behind it: which issuers are trustworthy, compliant, and scalable. With the introduction of the US Genius Act, this issue is expected to be resolved soon.
With the standardization of issuance, the stablecoin market enters the next phase—from issuance to distribution.
The days of issuers raking in astonishing profits are numbered—distributors are beginning to realize their leverage and capture their rightful share of value. This has been well illustrated in Circle's prospectus.
Given this shift, it is increasingly important to understand which applications, protocols, and platforms are achieving real growth, particularly for those on-chain stablecoin scenarios that have already matured in the crypto market.
Last week, we compiled Artemis: On-the-ground data from stablecoin payment adoption, exploring the potential and pathways of stablecoins linking traditional finance, starting from off-chain payment stablecoin scenarios.
Today, we continue to delve into Artemis, The Future of Stablecoins, Usage, Revenue, and the Shift from Issuers to Distribution, focusing on stablecoin use cases related to on-chain activities, as each use case has its unique context and practices while also allowing us to observe value capture trends amidst on-chain dynamic market fluctuations.
Key Points
Despite the market capitalization of stablecoins reaching $240 billion and annual trading volume hitting $3.1 trillion, there are many misconceptions about their adoption among the public. On one hand, issuers are willing to pay high fees to distributors to expand their market, as Circle paid $900 million to distributors like Coinbase in 2023, accounting for more than half of its revenue, to attract users to use USDC.
On the other hand, the so-called $3.1 trillion annual trading volume is highly misleading, with 31% derived from MEV bots contributing through thousands of daily circular operations, repeatedly using the same funds, resulting in significantly lower trading volume actually involving human participation than the surface data suggests.
Additionally, there exists a phenomenon of wealth concentration that is little known in the stablecoin space. Currently, while there are 150 million stablecoin wallets, 99% of wallet balances are below $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 have been reported as being in the 'gray area,' with their implications still unclear.
Notably, the true explosive growth of stablecoins has occurred in the past six months, with DeFi stablecoin trading volume skyrocketing from $100 billion to $600 billion since the summer, while meme coin trading alone generated $500 billion in stablecoin traffic, accounting for 12% of annual trading volume.
However, the criteria by which we measure the success of stablecoins are fundamentally misplaced; a decline in total value locked (TVL) may not signify reduced usage but rather a reflection of technological advancements and efficiency improvements, while rising trading volumes may merely indicate increased bot activity. All the metrics we use to track adoption have fundamental issues.
While people are still debating the market share of USDC and USDT, true transformation is quietly occurring at the distribution level. This could lead to a complete reshaping of the value chain of the entire stablecoin ecosystem.
1. The Next Phase of Stablecoins
In just a few years, stablecoins have evolved from experimental products to essential financial tools, with undeniable product-market fit. However, we have now entered a new era where mere issuance and liquidity are insufficient for sustained growth. The next stage of stablecoin applications will involve new factors, including sharing economic benefits with partners, convenience of on-chain and off-chain integration, and the degree of utilization of programmable features. - 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 exceeding $240 billion and annual on-chain transaction volume surpassing $7 trillion, rivaling traditional payment networks, yet many figures are worth exploring.
Supply reflects the existence of stablecoins, not their usage, flow, or purpose. Meanwhile, volume reflects a mix of on-chain human activity and bot activity 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 validators or in staking, while others are key drivers of cross-platform, cross-user, and cross-regional economic activities.
As noted (2025 Stablecoin Status), we see distinct differences in stablecoin usage across various ecosystems. Stablecoins on Ethereum are often used as DeFi collateral and trading liquidity, while those on Tron are more commonly used for remittances and payments in emerging markets. USDC holds a higher share in institutional fund flows, while USDT thrives due to 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 niche markets.
Understanding the application scenarios and functional utility of stablecoins is currently the clearest signal regarding which areas have truly adopted stablecoins and where the next wave of innovation will emerge.
2. From Institutional Issuance to Market Distribution
Stablecoins are poised for further growth, as regulatory clarity opens doors for institutional investors. The next phase of stablecoins is not just about who has scale but about the business models of all participants in the stablecoin supply chain, including issuers, distributors, and holders. In the next 12-24 months, we will undoubtedly witness changes and challenges regarding value chains 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 mainly concentrated among issuers. Maintaining a 1:1 peg at such a large scale is a challenge that few issuers have been able to solve effectively.
Tether and Circle are able to maintain dominance not only because they are pioneers but also because they are among the few issuers capable of effectively managing large-scale issuance and redemption, managing reserves, integrating with banking partners, and withstanding market pressures.
Monetizing through reserve income (primarily from short-term U.S. Treasury bills and cash equivalents) can transform even modest interest rates into significant revenue. At the same time, early successes continue to compound: exchanges, wallets, and DeFi protocols built around USDT and USDC have reinforced the network effects of issuance and liquidity.
2.2 Distributors as Important Value Layers
Trustworthy custody, liquidity, and redemption are no longer differentiators but expectations. As more issuers with similar capabilities enter the market, the importance of the issuers themselves is gradually diminishing.
What is important is what users can do with stablecoins. Thus, the dominance of stablecoins is shifting from issuers to distributors.
Distributors integrating stablecoins into wallets, exchanges, and applications with real use cases now wield influence and leverage. They control user relationships, shape user experiences, and increasingly decide which stablecoins gain attention.
And they are monetizing this position. Circle's recent IPO filing shows that it paid nearly $900 million to partners like Coinbase for the integration and promotion of USDC, exceeding half of its total revenue in 2023.
Note that the current situation is that the issuer pays the distributors, not the other way around.
(Circle S-1 Form)
Many distributors are further enhancing their platform architecture. PayPal has launched PYUSD; Telegram is collaborating with Ethena; Meta is exploring stablecoin channels again; fintech platforms like Stripe, Robinhood, and Revolut are directly embedding stablecoins into their payment, savings, and trading functionalities.
Issuers are also not standing still. Tether is building wallets and payment channels. Circle is achieving full-stack development through payment application programming interfaces (APIs), developer tools, and infrastructure acquisitions while launching the Circle Payment Network to create network effects.
But the situation has become clear: distribution has now become a strategic high ground.
We are undergoing a structural transformation: a shift in perspective, where stablecoins are no longer viewed as 'cryptocurrencies' but as 'global infrastructure'; a shift in utility, where financial institutions are fully leveraging these new rails to reshape their products; and the competitive landscape is continuously evolving.
- Ran Goldi, Senior Vice President of Payments and Networks at Fireblocks
2.3 Building Programmability and Precision
With the proliferation of stablecoins, new infrastructure is emerging—designed to achieve programmability, compliance, and value sharing. Issuance alone is no longer key. To remain competitive, stablecoins must adapt to the demands of platforms driving usage.
Next-generation stablecoins incorporate programmable features such as reconciliation capabilities, compliance rules, and conditional transfers. These functions allow stablecoins to act as application-aware assets, automatically routing value to merchants, developers, liquidity providers (LPs), or affiliates without needing off-chain protocols.
Each use case has its unique context. Remittances prioritize speed and conversion, DeFi demands composability and collateral flexibility, while fintech integration requires compliance and auditability. The emerging infrastructure stack is designed to meet these diverse needs, allowing the stablecoin layer to dynamically adapt to its environment, rather than providing a one-size-fits-all solution.
Crucially, this shift in infrastructure enables more precise value capture. Programmable liquidity means that value can be shared across the entire stack rather than being hoarded solely by the issuer. Stablecoins are becoming dynamic financial primitives, influenced by the incentive mechanisms and architecture of their ecosystems.
3. On-chain Stablecoin Use Cases
As value capture of stablecoins shifts downstream, it is the distributors that define their actual use cases.
Wallets, exchanges, fintech applications, payment platforms, and DeFi protocols dictate which stablecoins users can see, how they interact with these stablecoins, and where they create utility. These platforms shape the user experience and control the demand side of the stablecoin economy.
Analyzing the actual usage of stablecoins in payments, savings, trading, DeFi, and remittances can reveal who is creating value, where friction points exist, and which distribution channels are effective. This report focuses on stablecoin use cases related to on-chain activities, and by tracking the movement of stablecoins in wallets and platforms, we can gain insights into the infrastructure and incentive mechanisms affecting their adoption.
Among these known (also referred to as 'tagged') participants, the usage of stablecoins is currently concentrated in three main environments:
Centralized Exchanges
DeFi Protocols
MEV
The table below shows the supply and trading volume proportions for each category as of April 2025:
These three categories of addresses account for 38% of the total supply of stablecoins, with trading volume accounting for 63% of total trading volume.
Untagged addresses account for the majority of remaining supply and trading 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 supply of stablecoins: $240 billion
In the past 30 days, total trading volume of stablecoins: $3.1 trillion
Reserve Revenue: $10 billion
A. Supply
The distribution of stablecoin supply reveals which platforms and use cases have sufficient appeal to attract and retain circulation. Since the summer of 2023, the total supply of stablecoins has steadily risen, reaching a historical high this year, with substantial growth in supply from centralized exchanges (CEX), DeFi, and untagged wallets.
Most stablecoin supply is concentrated in centralized exchanges, with Binance holding a significant lead. DeFi protocols and issuers also hold substantial shares.
B. Volume
Since the summer of 2023, total trading volume of stablecoins has steadily increased, with abnormal spikes during periods of high market activity. DeFi trading volume has shown the highest growth, while MEV and untagged wallet trading volumes are high but volatile.
The entities with the highest stablecoin trading volumes are often centralized exchanges, followed by DeFi and issuing institutions. CEX trading volumes do not reflect transactions on CEX platforms, as most trading occurs off-chain. Instead, they reflect user deposits, withdrawals, inter-exchange transfers, and internal operational activities.
3.2 Centralized Exchanges (CEX)
The supply of stablecoins anchored by centralized exchanges occupies a significant portion of 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.
Share of total supply of stablecoins: 27%
In the past 30 days, the share of total trading volume in stablecoins: 11%
Reserve Revenue: $3 billion
Since the local low in 2023, the supply of top centralized exchanges (CEX) has nearly doubled. The supplies of Coinbase, Binance, and Bybit often fluctuate with the market, while the supplies of Kraken and OKX have seen more stable growth.
Due to most activities occurring off-chain (centralized ledgers), it is challenging to obtain specific data on how centralized exchanges (CEX) use stablecoins. Funds are typically pooled together, and specific uses are rarely disclosed. This opacity makes it exceedingly difficult to comprehensively assess the usage of stablecoins within centralized exchanges (CEX).
The trading volume attributable to centralized exchanges (CEX) reflects on-chain activities related to deposits, withdrawals, inter-exchange transfers, and liquidity operations, rather than internal trading, margin collateral, or fee settlements. Therefore, it is best viewed as an indicator of user interaction with exchanges rather than a measure of total trading activity.
3.3 Decentralized Finance (DeFi)
Share of total supply of stablecoins: 11%
In the past 30 days, the share of total trading volume in stablecoins: 21%
Reserve Revenue: $1.1 billion
The supply of DeFi stablecoins comes from collateral, liquidity provider (LP) assets, and the settlement layers of lending markets, decentralized exchanges (DEX), and derivatives protocols. Over the past six months, the supply from CDPs, lending, perpetual contracts, and staking has nearly doubled.
The supply share of DEXs has significantly declined, not because of reduced DEX usage, but because DEXs have become more capital efficient. With the popularity of Hyperliquid, the supply locked in perpetual contracts has recently increased substantially.
Over the past six months, the monthly trading volume of DeFi stablecoins has grown from approximately $100 billion to over $600 billion, primarily due to significant growth in decentralized exchanges (DEXs), lending markets, and collateralized debt positions (CDPs).
In the DeFi space, stablecoin applications are prominent in the following key areas:
DEX Liquidity Pools
Lending Markets
Collateralized Debt Positions
Others (including perpetual contracts, cross-chain, and staking)
Each sector uses stablecoins differently—as liquidity, collateral, or payment methods—affecting user behavior and the economic implications at the protocol layer.
A. DEX
Concentrated liquidity, stablecoin-centric DEXs, and cross-protocol composability reduce the need for DEXs to maintain high stablecoin volatility.
The trading volume of stablecoins in DeFi mainly comes from DEXs. The share of DEXs in total trading volume fluctuates with market sentiment and trading trends, recently skyrocketing to over $500 billion with meme coin trading accounting for 12% of total trading volume.
B. Lending Markets
Although lending activity has receded from its peak, Aave has shown strong recovery momentum, while new protocols like 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 the adoption of DAI constantly increasing due to high savings rates. They hold billions of dollars in stablecoins and play a critical role in maintaining the peg of DAI to the dollar.
D. Others
Stablecoins also play a critical role in supporting DeFi derivatives, synthetic assets, perpetual contracts, and trading protocols.
Over time, the supply of stablecoins has rotated among various perpetual contract protocols, currently concentrated in Hyperliquid, Jupiter, and Ethereal.
3.4 MEV Miners / Node Validation
Share of total supply of stablecoins: < 1%
In the past 30 days, the share of total trading volume in stablecoins: 31%
Reserve Revenue: /
MEV bots capture value by reordering transactions. Their high-frequency behavior leads to an excessively high share of on-chain trading volume, often reusing the same funds.
The above chart distinguishes MEV-driven activities to differentiate between bot trading volume and human trading volume. MEV trading volume surges during peak trading periods and fluctuates as blockchains and applications attempt to counteract MEV strategies.
Predicting revenue for high transaction volume, low volatility use cases like MEV is not as straightforward as predicting for high volatility use cases. The prediction of reserve yield is not applicable here, but these use cases can adopt various monetization strategies such as trading fees, spread capture, embedded financial services, and monetization of specific applications.
3.5 Untagged Wallets
Share of total supply of stablecoins: 54%
In the past 30 days, the share of total trading volume in stablecoins: 35%
Reserve Revenue: $5.6 billion
Activity of stablecoins in untagged wallets is harder to explain, as the intent behind the transactions must be inferred or confirmed through private data. Nevertheless, these wallets account for the vast majority of stablecoin supply and often represent a significant portion of trading volume.
The composition of untagged wallets includes:
Retail Users
Identity Unknown Institutions
Startups and SMEs
Dormant or Passive Holders
Unclassified Smart Contracts
Although attribution models are imperfect, these so-called 'gray area' wallets are increasingly capturing a significant share of real-world payments, savings, and operational processes, many of which do not fully align with traditional DeFi or trading frameworks.
Some of the most promising use cases are emerging, including:
P2P Remittances
Startup Treasury Management
Dollar savings for individuals in inflationary economies
Cross-border B2B Payments
E-commerce and Merchant Settlements
In-game Economies
As regulatory transparency increases and payment-centric infrastructure continues to attract capital, these emerging use cases are expected to expand rapidly, especially in regions with traditional banking service gaps.
See related content: Artemis: On-the-ground data from stablecoin payment adoption
Currently, we will focus on the following high-level trends:
Despite the large number of untagged wallets (over 150 million), the vast majority of wallet balances are trivial. Over 60% of untagged wallets hold stablecoin balances below $1, and there are fewer than 20,000 wallets holding over $1 million in stablecoins.
When we shift our focus to each wallet's balance, the situation is completely reversed.
There are fewer than 20,000 untagged wallets with balances exceeding $1 million, holding over $76 billion, accounting for 32% of total stablecoin supply.
Meanwhile, wallets with balances below $10,000 (accounting for over 99% of untagged wallets) hold a total of $9 billion, less than 4% of total stablecoin supply.
Most wallets are small, but the majority of untagged stablecoins are held by a few high-value groups. This distribution reflects the dual nature of stablecoin usage: on one hand, a broad base of grassroots users, and on the other, a high concentration among institutional or whale users.
4. Conclusion
The stablecoin ecosystem has entered a new phase where value will increasingly flow to those building applications and infrastructure.
This marks a key maturation of the market, shifting the focus from the currency itself to the programmable systems that make the currency work. With the refinement of regulatory frameworks and the surge of user-friendly applications, stablecoins are set for exponential growth. They combine the stability of fiat currencies with the programmability of blockchain technology, 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 acquired across the ecosystem.
The future financial world will not only be defined by stablecoins but by the ecosystems formed around them.
