PayPal's stablecoin market value plummets 30%, Solana DeFi revenue plunges

Source: Blockchain Knight

On-chain data shows that PayPal's stablecoin PYUSD has lost nearly 30% of its market value in the past 30 days, sliding from more than $1 billion to $712 million on September 25.

The main reason for the decline in market value is the sharp reduction in market value on Solana, which accounted for about 65% of the total market value on August 26.

As of September 25, PYUSD circulating or locked in the Solana ecosystem has fallen from $662 million to $364 million. In contrast, its market value on Ethereum remained stable during this period, at $340 million.

However, according to Artemis data, PYUSD has had a relatively high average daily transfer volume in the past 30 days. The stablecoin's average daily transfer volume is $242.2 million, just $11.6 million lower than the average daily transfer volume between July 28 and August 25.

While market cap fluctuations in stablecoins are not uncommon, the negative deviation in PYUSD’s market cap comes at a time when the entire stablecoin market has grown by nearly 1.6%, or $3 billion.

The decline may be due to the fact that DeFi yields have fallen by nearly 50% during this period.

As of September 24, the yield for providing PYUSD as collateral on Kamino has fallen by nearly 50% to 7.6%, compared to 14% at the end of August.

As a result, the total amount of stablecoins locked in the protocol has dropped by 30% from $430 million to $296 million.

Despite the decline in PYUSD’s market cap, it remains the third-largest stablecoin in the Solana ecosystem, behind TetherUSD (USDT)’s $728 million share and USDCoin (USDC)’s $2.6 billion.

It is worth noting that the reduction in incentives may be related to a series of partnerships related to PYUSD that PayPal is closing. PayPal partnered with AnchorageDigital to offer stablecoin rewards, Fortune reported on August 22.

Therefore, PayPal may distribute the reward distribution to different areas, expecting to gain benefits in various areas related to Crypto assets.

In addition, PayPal announced on September 25 that it will allow corporate accounts located in the United States to buy, sell, and hold Crypto assets, according to Bloomberg.