USDC Lending Rates Compared
In light of the shortcomings of the original crypto stablecoin, Tether, it seems that competition is heating up to replace it. There has been dozens of companies, including startups and established businesses, racing to introduce their own new stablecoin into the market. One of the leading new stablecoin projects is USDC, also known as USD Coin, which was created in a joint-venture between Coinbase and Circle.
Of course, Coinbase is one of the leading crypto exchanges in the US and Circle is a crypto payments startup that has the backing of Goldman Sachs and other notable venture firms. Circle also recently acquired the crypto exchange, Poloniex. The new joint-venture, named Centre, will be responsible for the issuance, governance, and administrative tasks surrounding the stablecoin.
Compound is one of the leading crypto lending platforms. It allows users to post offers to lend out their crypto and for borrowers to access loans in crypto, as well. Compound has close to $120M worth of loans on the platform. It is a permissionless platform that allows users to borrow or lend in 6 different cryptoassets. While the vast majority of loans are in Ether, Compound is one of the leading places to lend and borrow USDC, with over $32M in gross supply of USDC loans. USDC is the third most popular crypto to lend on Compound behind Ether and Dai.
Similarly, Dharma is a marketplace that connect lenders and borrowers of cryptoassets. It is permissionless and does not require a bank account or any KYC information on its users. It allows for loans in 2 different stablecoins: Dai, and USDC. While the interest rate can change, the current rate for lending USDC is 3.7%.
Salt is a platform that allows user to take out loans USD while using cryptocurrencies as collateral. Users will have to overcollateralize the loan. For instance, to take out $10,000 USD, users must put up at least $14,200 worth of cryptocurrency. Users must also stake a portion of the Salt utility coin. Salt accepts many different forms of collateral, including USDC, Bitcoin, Ether, Litecoin and other stablecoins. Salt can deny a loan application, so it is not permissionless, but it does not check credit score or other traditional metrics. While only USD loans are available now, Salt will shortly be rolling out loans in other fiat and digital currencies.
Biggest USDC Exchanges
Binance is a top exchange in the world by total trading volume, measuring over $700M at the time of writing. Binance is headquartered in Malta and is known for listing hundreds of different coins for trading. Binance has recently faced some regulatory scrutiny from US regulators. It recently shut down service for all US customers, and launched a Binance US exchange. USDC has large number of trading pairs on the platform, though it has to compete with several other stablecoins listed there, as well.
USDC Trading Volume: ~$17M (December 2019)
Number of USDC Trading Pairs: 31
Other Stablecoins: Tether, Paxos, TrueUSD, Binance USD, Russian Ruble, Nigerian Naira, StableUSD
Coinbase is one of the leading crypto exchanges in the US. It was started in 2014 and boasts daily volumes close to $125M on average. As one of the most recognized and used crypto exchanges in the US, it makes for an ideal launching pad for USDC. Coinbase has over $1billion in annual revenue and over 13 million users on its platform, making it a strong, strategic place to drive adoption of its new stablecoin. USDC is the only fiat-backed stablecoin on the platform.
USDC Trading Volume: ~$8.8M (December 2019)
Number of USDC Trading Pairs: 10
Other Stablecoins: Dai
Poloniex is one of the oldest US crypto exchanges, also founded in 2014. It posts daily volumes around $45M and offers a substantial higher number of coins to trade than any other US exchanges. It was recently a subsidiary of Circle, and thus served as a strategic launching pad for the USDC asset. Poloniex was recently sold to new investors, which include Tron founder, Justin Sun. Tether is also offered on the platform and has a substantial number of trading pairs.
USDC Trading Volume: ~$8.7M (December 2019)
Number of Trading Pairs: 17
Other Stablecoins: Tether
Top USDC Wallets:
What is USDC Crypto?
USDC is straight-forward, asset-backed stablecoin. In other words, Centre holds $1 USD in cash or equivalent assets, for every 1 USDC issued. Centre is backed by strictly regulated US financial institutions and publishes a monthly audit report by an accounting firm, Grant Thornton, to prove its capitalization. Essentially, this is the exact same structure as the Tether USDT stablecoin, except with greater transparency and more trusted brand names behind it.
USDC utilizes the Ethereum blockchain and follows the ERC-20 standard, which is the most the common among all cryptoassets. In this way, USDC can provide the stability of the US Dollar but also leverage the power of smart contracts to enable a new set of possibilities of financial services. The Ethereum smart contracts can be used for new forms of lending, borrowing, and payments.
USDC is integrated into a plethora of exchanges, wallets, apps and other platforms. Centre intends for consumers to use USDC for trading, investing, payments, lending and other virtual use cases. Their partner network is already solid and expanding quickly. USDC is offered in over 85 countries around the world.
Can only Centre issue USDC?
For the time being, only Centre will issue USDC. However, the long-term plan is to establish an open-source framework that would allow any financial institution to issue USDC to their own customers. The financial institutions would just have to meet certain financial and technical requirements, but would join a global network of traditional banks and new fintech startups using the same USDC currency.
Is USDC only for the US Dollar?
Centre foresees this model of stablecoin being used on other global currencies, such as the Euro, Yen, and any many other currencies. While the name may vary slightly, these currencies would be part of the same open-source framework and rely on a similar pegging mechanism. These other currencies would use the same Ethereum-based technologies and similarly be backed one-to-one in an audited bank account. For instance, a European may soon be able to start issue a Euro stablecoin through Centre.
What merchants accept USDC?
Because Coinbase is one of the backers of USDC, it is integrated into their suite of products. Coinbase has one of the most popular crypto merchant products in Coinbase Commerce, which is a POS software that allows business to accept payment in crypto. Coinbase Commerce has accepted over $50M in crypto transactions and has over 500 different merchants using it. Coinbase Commerce is integrated with other may payment processors, such as Shopify. Additionally, other crypto payment processors, such as Bitpay, provide USDC support.
Overall, USDC provides a more transparent, reliable store of value than other major stablecoins. It is more reputable and transparent than Tether. It is backed by fiat assets, rather than cryptoassets, which is how the Dai model works. It has notable backing from financial institutions and already seeing a healthy rate of adoption. With the robust ecosystem supporting USDC, users can use, trade, loan, and store USDC at a plethora of different websites.