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17 February 2020

Ethereum Is No Longer a Monopoly Platform for Stablecoins

Ethereum Is No Longer a Monopoly Platform for Stablecoins

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There were only 11 stablecoins on the market in 2016, and another 10 were added in 2017.

We have recently seen an increased number of entrants into the blockchain market that depend on a sort of asset-backing mechanism.

Despite the number of blockchain 3.0 projects hitting the market, Ethereum continues to take up a significant portion of the stablecoin market.

On-chain logic and regulation is built-in: These capabilities are why Ethereum-based stablecoins became the standard early on and have even provided a proven business model.

A total 93% of today’s stablecoin market revolves around the popular Ethereum-based stablecoin Tether (USDT), but others have quickly risen in size and scope — such as Paxos Standard (PAX), USD Coin (USDC) and Gemini Dollar (GUSD).

Each one of these stablecoins are compelling proof of the stablecoin concept, and they all happen to be built on the Ethereum blockchain.

We have seen a number of EOS stablecoin projects like EOSDT, Carbon (CUSD), EUSD and Tether go live on EOS, and more are joining their ranks on the market.

With other blockchain platforms offering more options for stablecoin projects, there is no reason for these projects to suffer from Ethereum’s well-understood shortcomings. .

An Ethereum-based stablecoin framework comes with limited transaction bandwidth: Ethereum can handle around 25 transactions per second at maximum, and users pay higher fees to see their transactions processed with urgency.

A lack of interoperability on Ethereum blockchains: This wasn’t such an issue three years ago, when there was only one blockchain for everyone’s smart contracts and decentralized application (DApp) development.

The next stage of the stablecoin market’s evolution is about competition between Ethereum, EOS and other blockchain platforms and stablecoin projects within one network.

The crypto market is recognizing the value that stablecoins have, as the global stablecoin trading volume grew from $12.5 billion in 2017 to $82 billion in 2018.

As the stablecoin market begins to see some maturation within a cryptocurrency industry just 10 years old or so, it’s clear that there are options beyond Ethereum.

There is not only a trend toward building on EOSIO, but toward picking alternative blockchains beyond Ethereum as well.

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