A Performance Analysis Of Stablecoin Transactions On Solana

In this article, we intend to share a visualization that compares USDC, USDT, and UST usage in transactions within the Solana ecosystem in January. Has UST seen more adoption within the ecosystem this month? How will this trend continue?

How does it differ from Ethereum?

The only difference between Solana and Ethereum is Solana’s high speed for transactions. It is a blockchain network for building cryptocurrencies just like Ethereum and Bitcoin. 50,000 transactions can be processed per second on this new blockchain network, which makes it unique.

While Ethereum follows Proof of History(PoH), Solana follows Proof of Work(PoW). This puts them at odds with respect to the underlying technology they both use. Ethereum is a more mature and decentralized network, whereas Solana offers high-speed and low-cost transactions. Ethereum was launched on 2014 , and Solana was launched newly on 2020.

If we look at the concept of Proof of History in Solana , The Proof of Work (PoW) system is rather complex and slows down transactions; therefore, the Proof of History (PoH) system was introduced to address these issues. In this PoH , Blockchain will add a new block without any mutual agreement. The Solana network has no central clock, so each node decides on its own without consulting any others. And also, by this Proof of History increases the speed of transactions, creates an efficient blockchain network, and allows transactions to be tracked.

When compared to bitcoin and ethereum’s blockchain networks, Solana can process transactions at a relatively low cost by combining PoH and PoS.

Stablecoins : Decentralized finance relies on stablecoins. Think of them as normal currencies for the purpose of thinking about decentralized finance. They are cryptocurrencies and they represent a unit of traditional currency, or a fiat currency pegged to a cryptocurrency.Stablecoins do a wonderful job at achieving this as all major cryptocurrencies are extremely volatile. They are made to be pegged as closely as possible to traditional fiat currency units.

As can be seen from the below graphs, we can see the number of transactions on Solana each day as well as how many daily wallets are actively using stable coins (USDC, UST, and USDT).

Compare all three stable coins, USDC is the one with the most transactions, followed by USDT . UST transactions are relatively few compared to other stablecoins.

Compare all three stable coins, USDT is the one with the most active wallets on daily , followed by USDC . UST active wallets are relatively few compared to other stablecoins.

The number of wallets and transactions are lower for UST in comparison to other USDC and USDT stablecoins, but if we analyze the UST individually, we see that in January 2022, the daily transactions and wallet activity are increasing. Here, Maximum number of transactions of 4.62K was observed in January 28, 2022 and minimum number of transactions of 465 in January 1, 2022. Total Transactions increased by 4.16 times. The total number of transactions on January 24, 2022, is higher than usual

When we analyze the transfer transactions for the stablecoins USDC, UST, and USDC, we notice a large percentage 60% of USDC-USDC transfers. The total token flow is 27.2M

Below is a graph that shows the most popular tokens minted using these stablecoins. Out of the 3 Source Tokens, USDC contributes the most to Transactions (84.91%).Here we can see USDC->FCON , USDC->Unknown Token and USDC->STEP are top 3 token flows.

A complete token purchase can be seen below from the graph using UST. We see that UST->Unknown Token purchases are giving high percentage percentage and UST->wUST purchases come in second in terms of purchased tokens using UST.

Here is a graph that shows the forecast of daily active wallets and transactions in coming futures for UST. Here you can see the steadily increasing trend of transactions. As for the active wallets, we see the trend of increasing in the future so we hope it will continue.

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