PayPal’s PYUSD Fails To Capture Interest: 90% Of Supply Remains In Paxos’ Wallet
August 29 2023 - 10:00AM
NEWSBTC
Paypal’s Ethereum-based stablecoin PYUSD has failed to capture
crypto investors’ interest. According to data from Nansen, 90% of
the stablecoin’s total supply still remains with its issuer Paxos’
wallet. Paypal’s PYUSD Adoption Setback The payment giant Paypal’s
recently launched stablecoin PYUSD continues to struggle with
adoption and has failed to gain traction since its official launch
on August 7, 2023. Despite PayPal having over 350 million users
worldwide, on-chain data from Nansen has shown that only a small
percentage of its user base is currently using and holding the
PYUSD in self-custody wallets. Related Reading: Shibarium Launch
Proves Positive As Shiba Inu-Based BONE Celebrates New Milestone
“On the surface there’s a lack of demand from crypto users for
PYUSD when other alternatives exist,” said Nansen in a report.
However, it is believed that lack of enthusiasm might involve the
stablecoin’s lack of utility and not being able to earn interest on
the stablecoin, as highlighted by an X (formerly Twitter) user in a
post on August 26, 2023. 🚨Problem: Nobody wants to mint $pyUSD
because there’s not much to do with it and it doesn’t pay any
interest. 💡Solution: – $pyUSD – $crvUSD pool – $CRV gauge approval
from Curve DAO@PayPal 🤝 @CurveFinance $PYPL #DeFi
https://t.co/jVr7sN36KH pic.twitter.com/NUdsKmfY8F — DefiMoon 🦇🔊
(@DefiMoon) August 26, 2023 The stablecoin’s holdings on crypto
exchange wallets are also low, accounting for just about 7% of the
stablecoin’s total supply. This percentage takes into account the
balances on centralized exchanges such as Kraken, Crypto.com, and
Gate.io. Despite the high expectations in the crypto industry
following the release of the stablecoin that it would actually
promote wider adoption and introduce cryptocurrencies to the masses
for the first time, the stablecoin has failed to live up to
expectations and smart money investors seem perfectly comfortable
to circumvent the stablecoin. The largest holder of the
stablecoin holds less than $10,000 worth of PYUSD after the holder
sold about 3 meme coins to purchase the stablecoin. Excluding
contracts or exchanges, not more than 10 holders have a balance
surpassing $1,000. According to Coinmarketcap, PYUSD has a total
supply of 43 million PYUSD tokens and pools in decentralized
exchanges like Uniswap’s PYUSD/USDC and PYUSD/wETH accounts to only
50,000 PYUSD tokens respectively. The PYUSD tokens have been
criticized for being overly centralized, as the majority of its
total supply turns out to be stored on centralized exchanges,
resulting in difficulty in growing its circulation. Despite such a
high total supply, the collective total number of the stablecoin’s
holders according to Etherscan is merely 324 at the time of this
writing. PayPal's stablecoin maintains dollar peg | Source:
PYUSD/USD on Tradingview.com Expectations On Ethereum For The
Stablecoin According to JP Morgan analyst Nikolaos Panigirtzoglou,
following the first week of Paypal’s stablecoin launch, Ethereum
enjoyed no benefit from PYUSD when looking at things such as
increased network activity, increased Total Value Locked (TVL), and
enhancing Ethereum’s network utility as a stablecoin/DeFi platform.
Related Reading: JP Morgan Explains Why Bitcoin Price May Not Fall
Further Crypto experts and enthusiasts have also criticized PayPal
for choosing Ethereum for its stablecoin due to the blockchain’s
high transaction fees. Co-founder of Sei Network Jayendra Jog said,
“The gas fees of using PYUSD will be ridiculous, which will
disincentivize its usage.” He further added, “To help make the user
experience better, PayPal will either need to subsidize transaction
costs or will need to help support PYUSD on other networks with
cheaper gas fees.” Featured image from CNBC, chart from
Tradingview.com
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