|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cryptocurrency News Articles
Unveiling the Truth: Stablecoins Gauge Cryptocurrency Activity Amidst Bot Surge
May 09, 2024 at 11:01 pm
Accurate on-chain data is crucial for assessing real activity and trading volume, but stablecoin volumes are often misrepresented, with 90% driven by automated actions or bots. A recent study adjusts on-chain stablecoin volume, revealing a more accurate estimate of $265B, significantly lower than the initial $2.65T. Stablecoins play a significant role in DeFi ecosystems, with TRON-based USDT having the highest reported transaction count and value, followed by the Binance version of USDT. Despite the presence of bots, they enhance automation and execution speed in crypto trading, contributing to DeFi's growth.
Stablecoins: Unveiling the True Measure of Cryptocurrency Activity
In the ever-evolving realm of cryptocurrencies, accurate on-chain data holds unparalleled importance in gauging real-time activity and trading volumes. Among the key metrics that provide valuable insights into these dynamics are stablecoins, which serve as a pivotal measure for both transaction volumes and overall market activity.
Decentralized swaps, liquidity mining, and lending protocols, the cornerstones of decentralized finance (DeFi), necessitate intricate on-chain interactions with smart contracts. However, isolating the trading settlements from this transaction volume presents a significant challenge. A groundbreaking study conducted by Bloomberg and Allium Labs has shed light on the prevalent inaccuracies in stablecoin reporting, revealing that bots and automated actions account for approximately 90% of the reported activity.
TRON's Preeminent Position in the Stablecoin Landscape
Accurate reporting becomes even more problematic when the same set of stablecoins is utilized in multiple transactions, leading to potential double-counting. The glaring disparity between stablecoin transactions reaching Visa's processing capacity sparked an urgent need for further investigation.
Implementing Visa and Allium's stringent methodology, the adjusted on-chain stablecoin volume for the preceding 30-day period plummeted from an astounding $2.65 trillion to a more realistic $265 billion. While this methodology may not be foolproof, it offers a significantly more precise estimate of settlement volumes initiated by genuine end-users.
The most glaring discrepancy lies between unadjusted and adjusted volumes, emphasizing the prevalence of automated processes. The adjusted value, based on eliminating repetitive transfers of identical funds, represents a mere 10% of the unadjusted value, highlighting the pervasive influence of bots in the stablecoin market.
Stablecoins have established a robust presence across various blockchains, with a particular emphasis on DeFi ecosystems. TRON-based assets, including TRON-based USDT, play a pivotal role in this landscape, second only to Ethereum.
TRON's blockchain boasts the highest reported transaction count and value, with TRON-based USDT facilitating an astonishing $5.42 trillion in value transfers since the dawn of 2023, accompanied by close to one billion transactions during the same period.
Binance's version of USDT, although exhibiting a significantly lower transaction value of $671 billion, has nonetheless processed around $759.9 million in transactions since 2023. This elevated activity suggests that a substantial portion of these transactions may constitute micropayments or automated bot executions.
The Concentration of Stablecoin Activity on Ethereum and TRON
USDT, the ubiquitous stablecoin, has been deployed on numerous prominent L1 and L2 blockchains, serving as a cornerstone for decentralized trading pairs and collateralization. However, even in 2024, Ethereum and TRON continue to dominate the stablecoin landscape, with Solana experiencing notable growth.
The most significant supply expansion has been witnessed in Ethereum and TRON-based USDT, underscoring their pivotal role in shaping market sentiment and trading readiness. Stablecoins on alternative blockchains command a fraction of the supply and exert a limited influence on overall activity.
Bots: Bane or Boon for DeFi?
Bot usage has become an integral aspect of cryptocurrency trading, with lightning-fast interactions with decentralized exchanges (DEXs) and smart contracts exceeding human capabilities. Furthermore, bots have been deployed to automate certain activities, mitigating the potential for adverse market movements.
Far from hindering the DeFi ecosystem, trades, NFT sniping, and automated collateral management executed by bots actually enhance its potential. Telegram bot tokens provide even novice traders with access to automation, democratizing the DeFi landscape.
DeFi activity encompasses both transaction volume and active wallet count. Sporadic spikes in transactions and trades unaccompanied by a commensurate increase in users hint at the prevalence of bot usage. Most decentralized protocols do not actively oppose bot deployment, with the notable exception of decentralized gaming platforms, where developers strive to attract genuine users with verified identities linked to individual wallets.
The True Nature of Bot-Driven Volumes
It is crucial to recognize that bot-driven volumes do not necessarily equate to fake volumes. In fact, these volumes may be associated with personal wallets and serve as instruments for expeditious trading. Telegram bots compete fiercely to provide seamless services, eliminating the need for manual transaction initiation by users.
Automated services like BonkBot have facilitated over $5.5 billion in lifetime trades, demonstrating the pivotal role of bots in driving the latest meme token trend by minimizing the time between decision and execution.
Bot trading flourishes on networks with robust DeFi sectors and competitive trading fees, such as Solana, Arbitrum, Base, Avalanche, and Binance Smart Chain. These networks have emerged as hotspots for maximum extractable value (MEV) and Telegram bot operations, further fueling the growth of bot-driven trading.
Conclusion
While the presence of bots in the stablecoin market may raise concerns about the authenticity of reported volumes, it is imperative to acknowledge their dual nature. Bots contribute to liquidity, facilitate speedier execution, and lower transaction costs, ultimately enhancing the user experience. However, it is equally crucial to develop mechanisms that distinguish between genuine user activity and bot-driven transactions, ensuring transparency and accuracy in market reporting.
Disclaimer:info@kdj.com
The information provided is not trading advice. kdj.com does not assume any responsibility for any investments made based on the information provided in this article. Cryptocurrencies are highly volatile and it is highly recommended that you invest with caution after thorough research!
If you believe that the content used on this website infringes your copyright, please contact us immediately (info@kdj.com) and we will delete it promptly.
-
- Fantom (FTM) Soaring in Defi, While Sui and RebelSatoshi Navigate Market Turbulence
- May 18, 2024 at 09:39 pm
- Fantom (FTM): Climbing the Defi Ladder in Q2024 Amidst the market's recent turbulence, Fantom (FTM) has emerged as a beacon of hope for Defi enthusias
-
- BNB, Kaspa Show Positive Market Signals; BlockDAG Soars as Promising Crypto Investment
- May 18, 2024 at 09:31 pm
- Positive Market Signs Emerge for BNB and Kaspa; BlockDAG Celebrated as a Promising Crypto Investment After a protracted period of market decline, Bina
-
- Google's Search Engine Revolutionizes with AI-Powered Responses
- May 18, 2024 at 01:00 pm
- Google Unveils Ambitious Search Engine Revamp, Prioritizing AI-Generated Responses Mountain View, California - Google, the tech behemoth renowned for
-
- Southern Mallee up, about
- May 18, 2024 at 01:00 pm
- Southern Mallee up, about 18/05/2024 .td-post-sharing-classic { position: relative; height: 20px; } .td-post-sharing { margin-left: -3px; margin-righ
-
- Crypto Market Soars as Bitcoin Nears $67K Milestone
- May 18, 2024 at 12:58 pm
- Crypto Market Rebounds as Bitcoin Nears $67,000 Milestone The cryptocurrency market has witnessed a significant rebound, with the top digital assets p
-
- XRP's Shadowed Future: SEC Lawsuit Threatens Crypto's Potential
- May 18, 2024 at 12:49 pm
- XRP's Dim Future: SEC Shadow Looms Large, Dampening Investor Sentiment Since its highly anticipated debut in 2013, XRP has failed to live up to its in
-
- Whale Dump Rocks Dogecoin Market with $18.55M Worth of Tokens Offloaded on Robinhood
- May 18, 2024 at 12:43 pm
- Whale Dump Shakes Dogecoin Market as 120M Tokens Offloaded on Robinhood In a move that has sent shockwaves through the crypto community, an unknown wh
-
- Borroe Finance ($ROE) Soars, Outshining Ethereum and Ripple as Blockchain ICO Rising Star
- May 18, 2024 at 12:38 pm
- Borroe Finance ($ROE): The Rising Star of Blockchain ICOs, Surpassing Ethereum and Ripple in Performance In the ever-evolving realm of the cryptocurre
-
- Bitcoin: The Invincible Long-Term Investment, Surpassing Crypto Competition and Legacy Assets
- May 18, 2024 at 12:30 pm
- Bitcoin: The Unbeatable Long-Term Investment, Outperforming Crypto Rivals and Traditional Assets In the vast landscape of investment options, the stoc