According to a report by investment firm VanEck, stablecoins are in their own bull market, even as activity on smart contract platforms like Ethereum and Solana declines.
Rise in Stablecoin Capitalization
Stablecoins added nearly $10 billion in total market capitalization in March, even as average stablecoin yields decreased. Yields now range from 3% to 5%, close to Treasury Bills.
Decline in Ethereum and Solana Activity
Smart contract platforms like Ethereum and Solana have experienced significant declines in activity, with revenues and trading volumes dropping by 36% and 40%, respectively, and Solana losing 66% in fee revenues in March.
Impact of Memecoins on the Market
The slowdown in Solana's activity is also related to a decline in memecoin trading. After a series of scandals involving memecoins, retail traders' sentiment has worsened.
While stablecoins show growth, activity in traditional smart contracts faces challenges, which may indicate a change in market sentiment.
