Examining the Status of Stablecoin Minting and Burning Activities

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As of June 4, six stablecoins — Tether (USDT), Gemini Dollar (GUSD), HUSD (HUSD), PAX Gold (PAXG), TrueUSD (TUSD) and USD Coin (USDC) — have had a total of more than 10,000 minting transactions so far in 2020, totaling $8 billion, with USDT issued on the Ethereum blockchain dominating the stablecoin landscape. The major stablecoin began to explode in early March and drove the market cap of the entire stablecoin market higher. By the end of the April, it was ranked third in size behind Bitcoin (BTC) and Ether (ETH). Its current market capitalization accounts for about 85% of the total stablecoin market capitalization.

During the most volatile session, in March 2020, the number of minting and burning activities was at a peak, and the dollar value of newly issued tokens also reached its highest point.

In terms of burning activities, there have been nearly 5,600 burning events reported so far in 2020, with the total value of destruction exceeding $3 billion.

We looked at the quarterly stablecoin minting and burning records from early 2017. The dollar value of burning and minting in the third quarter of 2019 was at a historical high, and the volume of burning and minting activities reached a historical high in the first quarter of 2020.

Based on the data, we believe that if the trend continues, the number of minting and burning activities for Q2 2020 will be at least equal to the number in Q1 2020.

Significant differences in the number of minting activities
The following figure shows the number of minting activities and the dollar value of stablecoins minted in the first five months of 2020.

Among the stablecoins shown, HUSD initiated 5,280 minting transactions, increasing the overall market value by about $101 million, with an average of $200,000 per minting transaction. USDT only initiated 74 minting transactions, but the overall market value increased by approximately $5.5 billion as a result, with an average of $74 million per minting transaction — 370 times the average value of HUSD minting per transaction.

We also looked at data around stablecoin minting in dollar value and transaction activities. Minting activity reached its peak in March, which was also the month with the largest dollar value minted so far in 2020.

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