Solana PYUSD Supply Flips Ethereum, What’s Next for PayPal USD?

Solana has established itself as the unofficial home of PayPal USD (PYUSD). Despite originally launching on Ethereum, PYUSD supply has slowly but surely migrated over to the Solana network.

With Solana’s PYUSD supply flipping Ethereum’s, what’s next for the popular fiat-backed stablecoin?

51.47% of All PYUSD Lives on Solana

Following a meteoric rise in adoption over the past two months, Solana has become the leading blockchain for PYUSD adoption and supply. According to DeFiLlama data, 51.47% of all PYUSD is on Solana, suggesting holders prefer PYUSD opportunities on the network over rival Ethereum.

Siphoning PYUSD supply and liquidity away from the industry’s largest Layer One, PYUSD has surged in popularity on Solana. Based on Step Finance data, PYUSD supply on Solana has grown by 740%, rising from 45M on June 13th to over 378M at press time.

PayPal USD’s emphatic growth is largely driven by generous incentives. Through Solana DeFi platforms like Kamino Finance, Drift Protocol, and MarginFi, depositors can generate over ~20% in APY (annual percentage yield) by lending out their PYUSD.

Comparatively, PYUSD lending yield on Ethereum is dramatically lower, with markets like AAVE offering a mere 3.59%.

Beyond the ample opportunities available to PYUSD holders in Solana’s burgeoning DeFi landscape, the global payments giant has also been expanding its crypto offerings to a traditional audience.

In July, PayPal USD announced a collaboration with GCash, a financial application based in The Philippines. By integrating PYUSD into the popular app, PayPal made its stablecoin available to over 86M potential users.

With Solana establishing itself as the most promising blockchain for PYUSD use and adoption, what can we expect next?

What’s Next for PayPal USD?

Spearheading a new phase of opportunity and adoption for stablecoins on Solana, Paypal has launched its inaugural Global PYUSD Portal Hackathon. The event officially kicked off on August 12th and will run until September 16, 2024.

The hackathon encourages developers to leverage PYUSD’s unique token extensions, like transfer hooks and confidential transfers to create innovative applications. Winners of the hackathon stand to win their share of 40,000 PYUSD in prizes, with the grand prize winner taking home 15,000 PYUSD.

Despite its impressive growth, PYUSD still only accounts for approximately 9.25% of Solana’s stablecoin market share based on Dune Analytics data. While this indicates that PYUSD is still comparatively a small fish in a large ecosystem, it also suggests that there is still plenty of growth potential for the asset.

Read More on SolanaFloor

Gas abstraction is coming to Solana:

Fuse Wallet Reimagines Solana Transaction Fees with Gas Abstraction

How Do Stablecoins Work?