Solana Stablecoin Supply Hits Highest Point in 2 Years, Flirts with ATH

Onchain traders flock to stablecoins amidst fearful markets.

Published: Jan 14, 2025 at 11:19
Edited: Jan 14, 2025 at 15:48

Surrounded by uncertain market conditions, stablecoins have proven their status as a safe haven. With $SOL price dropping by over 13% on a weekly time frame, Solana DeFi users are fleeing to the security of pegged assets like $USDC.

Amidst mounting market turmoil, Solana’s stablecoin supply has risen by 7.11% to $5.89B, its highest point in over two years.

While this behavior indicates risk-off sentiment, funds are staying within the Solana ecosystem, suggesting traders and investors could be waiting to re-deploy from the sidelines.

Solana Stablecoin Supply 5.76% Shy of ATH

Solana’s stablecoin supply has surged throughout the last seven days, rising to its highest point since September 2022. At $5.89B, Solana’s stablecoin supply currently sits just 5.76% short of its previous all-time high, recorded at $6.25B on June 4th, 2022 based on DefiLlama data.

stablecoin supply

Solana’s growing stablecoin supply has been largely aided by Circle’s recent activity. Crypto’s second-largest stablecoin issuer has minted 1B new $USDC tokens so far in 2025, based on Solscan data.

USDC mints

Boasting $5.89B worth of fiat-pegged assets onchain, Solana’s stablecoin ecosystem is more developed than ever, with a growing variety of coins and an expansive range of DeFi protocols supporting stablecoin integration.

Solana’s stablecoin ecosystem enjoyed tremendous growth throughout 2024, witnessing token deployments from TradFi giants like PayPal and Ethereum DeFi heavyweights like Sky (formerly MakerDAO) choosing to launch tokens on Solana.

Beyond USD, Solana’s stablecoin economy includes a variety of alternative fiat currency pegs, including the Euro, the Japanese Yen, and the Australian Dollar.

Solana’s emerging RWA sector has also introduced several yield-bearing stablecoins, such as Solayer’s $sUSD and Ondo Finance’s $USDY. Collectively, these yield-bearing stablecoins constitute over $138 in network TVL (Total Value Locked).

Despite the diversity of Solana’s stablecoin options, Circle’s $USDC is still Solana DeFi’s coin of choice, commanding 74.4% of the network’s stablecoin supply.

Drift, Kamino Dominate Stablecoin Deposits

Solana’s flourishing stablecoin economy can attribute much of its success to the network’s thriving DeFi scene. Eager to stretch their capital as far as possible, traders are taking leveraged positions throughout Solana DeFi, resulting in consistently high stablecoin lending yield.

During periods of heightened market greed stablecoin lending rates typically exceed 10%, offering attractive yield for stablecoin depositors.

Kamino Finance and Drift Protocol dominate stablecoin deposits across Solana DeFi, commanding over $567M and $302M respectively in TVL across $USDC, $USDT, and $USDS alone.

Lulo Finance Cracks $100M in Directed Liquidity

Piggy-backing off Solana’s exploding stablecoin supply, yield aggregators like Lulo Finance are enjoying consistent QoQ growth. Yield aggregators automatically redirect user funds to different Solana DeFi apps, ensuring depositors are always earning optimized yield on their assets.

lulo DL

Lulo, Solana’s leading yield aggregator recently recorded over $110M in Directed Liquidity, a metric similar to TVL that tracks user deposits.

Stablecoins are widely considered the lifeblood of a healthy DeFi ecosystem. Despite fearful market dynamics Solana’s stablecoin has continued to increase, suggesting market participants are choosing to keep their funds within the ecosystem, as opposed to cashing out bull market gains to fiat currency.

This behavior indicates that onchain traders believe in a continuation of the 2025 bull market, and could be waiting for better conditions before redeploying capital in Solana ecosystem tokens.