Galaxy, a firm that manages assets, and Agora, a company that issues stablecoins, recently carried out the initial over-the-counter trade using AUSD, Agora’s stablecoin, as stated in an announcement made on January 8th.
Nick van Eck, CEO of Agora, stated that this deal symbolizes the shift of AUSD from theoretical concept to practical use in the real world,” or simply, “This trade signifies the transition of AUSD from theory to practice, according to Agora’s CEO.
As a researcher delving into the world of stablecoins, I find myself intrigued by Agora’s AUSD, the newest contender aiming to claim a significant portion of the market currently dominated by established players like Circle’s USDC and Tether (USDT). It’s interesting to note that it isn’t alone in this quest, as Ethena’s USDe also enters the fray as a relative newcomer.
Growing stablecoin market
After Donald Trump’s victory in the U.S. presidential election in November, the market value of stablecoins significantly surged. Trump’s pledge to establish America as a global leader in cryptocurrency and his plan to assign pro-sector figures to influential regulatory positions have likely contributed to this increase.
As an analyst, I observed a significant growth in the collective market capitalization of the top three stablecoins – USDT, USDC, and DAI (DAI) – during the last quarter of 2024. According to a report published by investment bank Citi in December, this growth surpassed $25 billion.
Currently, as of January 6th, the combined value of all stablecoins surpasses a staggering $210 billion. Notably, Tether (USDT) and USD Coin (USDC) account for approximately $137 billion and $45 billion of that total, respectively, according to data from CoinGecko.
DeFi use cases
The increase in the use of stablecoins significantly boosts the prospects of Decentralized Finance (DeFi) since they serve as a bridge or entry point for this sector, according to Citi’s assessment.
In December, the stablecoin issued by DeFi protocol Ethena, known as USDe, exceeded the market capitalization of around $6 billion, outpacing the comparable stablecoin, Dai from Sky (previously known as Maker).
Analysts attribute USDe’s success to double-digit staking yields and potential DeFi use cases.
Starting from February 2024, holders of sUSDe have been experiencing an average yearly return of approximately 17.5%. This rate peaked at 55.9% on March 7, 2024, and dipped to a low of 4.3% on August 8, 2024, according to Messari’s December 12 analysis.
Agora promotes AUSD as a “developer-friendly” stablecoin, aimed at capturing the interest of traders and coders through “efficiently optimized” smart contracts.
Additionally, it’s indicated that the stablecoin maintains full collateralization, with a significant portion of assets managed by one of the world’s leading asset management firms. Regular audit checks are conducted to ensure transparency.
In response to the evolving regulatory landscape for digital assets in the U.S., Agora plans to establish AUSD as a key foundation within the institutional stablecoin market.
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2025-01-08 20:11