According to a new Messari report, USDC was observed to be losing traction in the stablecoin market. BUSD on the other hand, was witnessing some growth. With new coins entering the stablecoin market and the ever-growing competition, it may become difficult for USDC to maintain its standing in the market.

One indicator of things not going USDCs way would be its dominance on Ethereum [ETH]. USDCs dominance on the ETH network fell 5% since July. Meanwhile, BUSDs dominance over the same network increased by the same 5% in the same time frame.

The USDC dominance, in early July 2022, had peaked and captured 44% of the Ethereum network. However, it slipped down to 39% at the time of press according to Messari. However, despite losing out on its dominance on the Ethereum network, the stablecoin managed to perform relatively well on Layer2 chains.

As can be seen from the image below, USDC grew significantly on L2 rollups, such as Arbitrum and Optimism. USDCs dominance on the OP network stood at 58%, while on Arbitrum stood at almost 75%.

Even though there was high dominance of USDC observed on both of these protocols, one of the reasons for the growth in the protocol could be attributed to the fact that simply fewer stablecoins were used on these L2s.

Taking a look at USDCs network growth on multiple networks could also give us an insight into the stablecoins future. As can be seen from the image below, the network growth on all three networks (Blue: Ethereum, Green: Optimism and Red: Polygon) declined over the past month.

This indicated that the amount of new addresses that transferred a USDC for the first time declined. This implied that new addresses were losing interest in the stablecoin.

However, over the past few days, there was an uptick in USDCs network growth on the Polygon network a good sign for USDC.

Despite USDCs fluctuating dominance, it was observed that it still maintained lead in terms of transfer volume. As can be seen from the image below, USDC accounted for 54.5% of the stablecoin transfer volume at press time.

At the time of writing USDC also stood second in terms of market capitalization at $45 billion. Its volume also registered a growth of 10.39% in the last 24 hours.

Even though BUSD showed some improvements, the stablecoins market cap was at 21 billion and still had a long way to go to catch up with USDT and USDC.

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What USDCs diminishing dominance on Ethereum means for the stablecoin - AMBCrypto News