The decentralized finance (DeFi) ecosystem witnessed a remarkable resurgence in July 2025 as stablecoin on-chain settlements reached an all-time high of $1.5 trillion, according to new data from analytics firm Sentora (formerly IntoTheBlock).
This milestone surpasses previous monthly highs of $1.44 trillion in April and $1.39 trillion in May, indicating a strong upward trend in on-chain financial activity. At the start of 2025, stablecoin settlements stood at just $950 billion, marking a significant increase in on-chain utility.
With nearly $200 billion already settled in August's first five days, the momentum seems poised to continue into the coming months.
USDC Outpaces USDT and DAI in DeFi
USDC, issued by Circle, continues to dominate on-chain stablecoin transactions in 2025. According to Sentora, it contributes between 40% to 48% of all stablecoin activity in DeFi.
Meanwhile, Tether’s USDT typically captures 20% to 27%, and DAI ranges from 17% to 33%. Together, these three account for over 90% of on-chain stablecoin volume.
Notably, USDT has seen a 123% increase in supply on the Aave protocol this year, now close to $7.5 billion. However, it still maintains the largest supply among stablecoins with a market cap of $164.70 billion and 61.41% dominance.
In comparison, USDC has a circulating supply of $63.85 billion, reflecting steady but more measured growth.
DeFi TVL and Ethereum Drive Activity
DeFi’s Total Value Locked (TVL) has reached $137.33 billion, increasing by 3% in just 24 hours, per DefiLlama. Sentora adds that DeFi protocols have collectively hit a three-year high of $179 billion.
This surge is fueled by growing inflows into liquid staking platforms and Ethereum’s steady climb toward $4,000.
Emerging Stablecoins and Market Expansion
New entrants like Ethena’s USDe and Sky Dollar (USDS) are gaining traction. USDe now has a market cap of $9.517 billion, while USDS follows at $4.87 billion.
Notably, Falcon USD (USDf) has surged over 102% in one month, from $552 million to $1.09 billion. The total stablecoin market cap has reached $268.20 billion, up by $13.2 billion over the past month and doubling year-over-year.
Regulatory Clarity Boosts Confidence
Recent regulatory updates in the U.S. are further legitimizing stablecoins. The SEC has categorized fully backed redeemable USD stablecoins as cash equivalents, making them more compatible with traditional finance systems.
The newly enacted GENIUS Act has also laid foundational law for fiat-backed digital assets, signaling increased support from lawmakers and institutional players alike.
As stablecoin use accelerates, USDC’s dominance in DeFi showcases its rising preference as a digital dollar, even as USDT maintains its lead in overall supply.
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