Bots Account for 90% of Stablecoin Transactions, Says VISA

Cuy Sheffield, Head of Crypto, #VISA, pointed out that stablecoins transactions may frequently be double-counted depending on the platforms involved in fund transfers.

Stablecoin demand has picked up again in 2024, with circulating supply approaching $150 billion, according to data from the Visa Onchain Analytics tool.

When looking at the monthly transaction volume, out of the $2.65 trillion of the transfer volume from the last 30 days, only $265 billion was ‘organic.’ While an improvement on an earlier report, this still depicts a huge misrepresentation of these transactions.

Their report from May 2024 revealed that of about $2.2 trillion in total transactions in April 2024, just $149 billion originated from “organic payments activity.”

REPORT | Bots Account for 90% of Stablecoin Transactions, Says VISA

Cuy Sheffield, Head of Crypto, #VISA, pointed out that stablecoins transactions may frequently be double-counted depending on the platforms involved in fund transfers.

For instance, converting $100 worth of… pic.twitter.com/rsRGIIiYuo

— BitKE (@BitcoinKE) May 10, 2024

According to Head of Crypto at VISA, Cuy Sheffield, stablecoins transactions may frequently be double-counted depending on the surprising platforms that are involved in the fund transfers. For instance, converting $100 worth of Circle Internet Financial Ltd.’s USDC to PayPal’s PYUSD on the decentralized exchange Uniswap would lead to $200 of total stablecoin volume being recorded on-chain.

Moreover, developers can create automated bot programs that perform activities such as stablecoin arbitrage, liquidity provision, and market making, among others. These activities are vital for sustaining the growing decentralized finance (DeFi) ecosystem. However, the on-chain transactions resulting from interactions with these automated programs don’t resemble settlement in the traditional sense.

This situation motivated VISA’s collaboration with Allium Labs to develop an adjusted stablecoin transaction metric. This adjusted metric aims to remove potential distortions that can arise from in-organic activity and other artificial inflationary practices.

Allium Labs, which provides enterprise-grade blockchain data to companies like VISA, Stripe, and Uniswap Foundation, has seen its data services become more prominent. The startup announced a $16.5 million Series A funding round in July 2024, bringing its total funds raised to $21.5 million.

“Currently, something as essential as accurately tracking digital currency volumes requires continually normalizing data across 40+ blockchain networks and parsing thousands of smart contracts, equating to petabytes of data,” said Ethan Chan, CEO and Co-Founder of Allium.

“Our goal is that our customers never need to worry about any of this.”

Despite the variance between total transfer volume and bot-adjusted transfer volume, the analytics dashboard by Allium and VISA revealed a consistent increase in monthly active stablecoin users. Across all chains, there were 27.5 million monthly active users, indicating a steady growth trajectory.

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