World Liberty Financial's USD1 stablecoin lost more than $400 million in market capitalization over the past two weeks, driven by large redemptions on Ethereum and BNB Chain. CoinGecko data showed USD1's market capitalization at about $4.02 billion on Monday, down from $4.43 billion on Oct. 6. CoinGecko data put the decline at approximately $401 million, or 9.1%. World Liberty Financial's proof-of-reserves dashboard separately showed approximately $4.01 billion in reserves.
Onchain Benchmark said the decline extended a period of concentrated redemptions on Ethereum and BNB Chain. Onchain Benchmark found that nearly $200 million in BNB Chain redemptions originated from a single unidentified address. The researchers could not establish who controlled the funds or why the funds were redeemed. However, USD1 maintained its dollar peg throughout the period examined by Onchain Benchmark, trading between $0.998 and $1.000. The researchers found no evidence of a sustained depegging event. The decline in circulating supply was not accompanied by a significant loss of the token's dollar value.
Onchain Benchmark recorded $184.60 million in net USD1 redemptions across 63 token burns on Ethereum between Oct. 6 and Oct. 15. Onchain Benchmark recorded $200.43 million across 12 burns on BNB Chain during the same period. On Ethereum, more than 99% of tokens sent for redemption passed through a wallet labeled BitGo, USD1's current issuer and custodian. The BNB Chain transfers from the unidentified address occurred in batches of $30 million to $50 million. USD1 supply on Solana remained unchanged at about $1.42 billion during the nine days reviewed by Onchain Benchmark, providing no new issuance to offset the reductions. Onchain Benchmark reported less than $1 million in transfers between Ethereum and BNB Chain, suggesting the reduced supply was not simply shifted between those networks.
USD1 supply on Ethereum fell 11.45% between Oct. 6 and Oct. 15, a steeper contraction than several other US dollar-denominated stablecoins. USDe supply on Ethereum declined 4.93% during that period. USDC supply on Ethereum declined 2.18%. Circulating USDT supply on Ethereum declined 0.76%.
Onchain Benchmark said World Liberty's trust company, when opened, will take over a token whose size depends on decisions by a few large holders. Onchain Benchmark said the trust company's charter has a legal footing being argued in court. Onchain Benchmark said the next weeks of supply data will show whether new issuance on Solana or elsewhere rebuilds USD1's total supply. Onchain Benchmark said the alternative is that October's supply level becomes the size USD1 carries into the new issuer.
World Liberty USD1 Stablecoin Market Cap Drops $400M in Two Weeks
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Summary
On-chain data shows World Liberty Financial’s USD1 stablecoin lost over $400 million in market cap in two weeks. CoinGecko data reveals USD1 dropped from $4.43 billion on Oct. 6 to $4.02 billion by Oct. 19. On-chain analysis from Onchain Benchmark highlights $200 million in BNB Chain redemptions from a single address, alongside $184.60 million in Ethereum redemptions. Solana’s USD1 supply remained steady at $1.42 billion.
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