REPORT | According to July 2024 VISA On-Chain Analytics, bots inflate stablecoin transactions from $265 billion to $2.65 trillion.
Stablecoin demand has increased again in 2024, with a circulating supply of around $150 billion, based on statistics from VISA’s Visa Onchain Analytics tool. Looking at the monthly transaction volume, just $265 billion of the $2.65 trillion in transfers over the previous 30 days were considered “organic.” This report represents a significant misrepresentation of these transactions, albeit being an improvement over an earlier one. Just $149 billion of the over $2.2 trillion in transactions that occurred in April 2024, according to their report from May 2024, came from “organic payments activity.”
Stablecoin transactions may often be double-counted depending on the platforms used for financial transfers, according to Cuy Sheffield, Head of Crypto at VISA. For example, $200 of total stablecoin volume would be recorded on-chain if $100 worth of Circle Internet Financial Ltd.’s USDC were exchanged for PayPal’s PYUSD on the decentralised market Uniswap.
Additionally, programmers can design automated bots that carry out tasks like market making, liquidity provisioning, and stablecoin arbitrage, among others. The expanding decentralised finance (DeFi) ecosystem depends on these efforts. The on-chain transactions that arise from interacting with these automated algorithms, however, are not comparable to traditional settlement.
This circumstance prompted VISA and Allium Labs to work together to provide an updated stablecoin transaction metric. The purpose of this modified metric is to eliminate any potential distortions caused by artificial inflationary tactics and in-organic activities. Allium Labs has witnessed an increase in demand for its data services. The company offers enterprise-grade blockchain data to clients including VISA, Stripe, and Uniswap Foundation. In July 2024, the firm revealed a $16.5 million Series A investment round, increasing the total amount of money raised to $21.5 million.
According to Ethan Chan, CEO and co-founder of Allium, “currently, something as essential as accurately tracking digital currency volumes requires continually normalising data across 40+ blockchain networks and parsing thousands of smart contracts, equating to petabytes of data.” “We want our clients to never have to worry about any of this.”
Although there was a difference in the overall transfer volume and the bot-adjusted transfer volume, Allium and VISA’s analytics dashboard showed a steady rise in the number of monthly active stablecoin users. There were 27.5 million monthly active users across all chains, suggesting a stable growth trajectory.
