Shining light on The State of Stablecoins

We’re delighted to announce the publication of The State of Stablecoins, a major research report focused on the rapidly growing world of stablecoins.

The report is the first of its kind to take a full look at the current state of the stablecoin market – an under-discussed but increasingly important part of the cryptocurrency ecosystem. And a space where we expect to see significant innovation in the coming years.

As stablecoins are tied either to the price of a commodity or to the operation of an algorithm, their prices are much less volatile than other cryptoassets. This means they’re appropriate for a whole host of use cases in the longer-term, ranging from store of value and derivatives, to smart contracts and remittances. Collectively, these are potentially worth tens of trillions of dollars. This means that stablecoins could act as a tipping point into wider crypto-asset adoption.

It’s an area that is also gaining increasing attention from investors, with over $350m committed to date from established funds such as Bain Capital Ventures, Google Ventures, Andreessen Horowitz, and Lightspeed Venture Partners, among others.

The State of Stablecoins report takes a detailed look for the first time at the strengths, trade-offs and concerns associated with all 57 active stablecoins, including both live and pre-launch projects, using a new data set that includes previously non-public information.

The report gives an overview of the different stablecoin formats currently in use, their relative performance and provides insights into the regulatory landscape. It also gives projections for how the market will develop over the next few years.

Some other key highlights from the report include:

  • Stablecoins can be broadly divided into two main stability mechanism categories: algorithmic (e.g., Basis) and asset-backed (e.g., Tether), with 77% of stablecoins asset-backed.
  • Live stablecoins have had mixed results to date in achieving price stability, with asset-backed coins (e.g., Tether) generally delivering on their stability promise and outperforming algorithmic coins (e.g., NuBits).
  • Surprisingly, fewer than two-thirds of all stablecoin projects (60%) are building exclusively on top of Ethereum (ETH), perhaps lending support to growing concerns over Ethereum’s ability to scale its transaction capacity.
  • Asset-backed stablecoins (e.g., US dollar-backed coins like TrueUSD, the second most actively traded stablecoin after Tether) have raised slightly more project funding ($177m) than algorithmic stablecoins such as Basis ($174m), highlighting lingering questions over whether ‘algorithmic central banks’ can ultimately be successful.
  • To drive network effects and achieve price stability, 51% of stablecoins offer some type of profit incentive for users, or ‘dividend’ mechanism, built into the design of the stablecoin system (e.g., ‘seigniorage shares’, transaction fee dividends).
  • Stablecoin designs presented to date all feature trade-offs (e.g., the more decentralized the system, the less confidence in the price stability mechanism).

This report is also the first publication from our new research team, led by Dr. Garrick Hileman, Head of Research at Blockchain, who was recently named one of the 100 most influential economists in the U.K. and Ireland by City A.M.

As well as providing great products to our users, Blockchain has been committed to shining a light on the state of the markets, ever since the early days of, when we first launched our block explorer service.

We hope you find this report interesting and informative. We look forward to sharing more of our team’s research in the future.

You can read the full report or take a look at the summary slides at

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