Author: Bubbles; Source: Chain Finance

1**、**PYUSD **becomes the sixth largest Stable Coin in the world

The market capitalization of PYUSD, the stablecoin issued by global payment giant Paypal, has surpassed $1 billion.

At the beginning of 2024, the market capitalization of PYUSD was only 2.34 billion US dollars, and on August 27th, the market capitalization broke through the $1 billion mark, in just over 7 months, the market capitalization of PYUSD rose by 327%, with a very rapid rise.

What is the concept of a 1 billion dollar volume in the Stable Coin market?

According to the data from defillama platform, PYUSD Market Cap ranks 6th in the Stable CoinMarket Cap ranking, following USDE and FDUSD.

Based on the recent rise, PYUSD is not unlikely to break into the TOP3 of Stable Coin Market Cap by the end of this year.

2. The rise of PYUSD comes from subsidies in real gold and silver

From the rise trend data of PYUSD, its market capitalization mainly comes from the past two months. What factors in the past two months have led to the big pump of PYUSD Market Cap?

From the perspective of the Node timeline, the past two months have been a time of rapid rise for Solana on-chain PYUSD from issuance to rise.

The main reason for the rapid rise of PYUSD Market Cap is due to the high incentive strategy recently launched by PYUSD on the Solana blockchain, that is, the rapid rise of PYUSD comes from the subsidy of real money and the expansion of application scenarios.

For example, the stake annual percentage yield (APY) of PYUSD in the Solana ecosystem's Kamino stake project can currently reach 10% or more.

On the marginfi platform, the stake Annual Percentage Rate (APY) of PYUSD is also over 10%.

If estimated based on the current on-chain TVL and APY of PYUSD, PYUSD needs to pay users up to several million dollars of Interest every month due to incentive activities.

And who is paying for this massive Interest?

Some people think it's the Solana Foundation, because they can strive to bring PYUSD to the Solana blockchain for issuance for the development of the SOL ecosystem, but that's not the case.

The person in charge of the Solana Foundation, as well as Kyle, a managing partner of Multicoin, have made it clear that the Solana Foundation did not pay any incentive funds. Therefore, the Interest expenditure of this PYUSD incentive activity naturally comes from the issuance party of PYUSD, Paypal.

Such a high APY income also makes PYUSD on the Solana public chain surpass the Ethereum public chain in mid-August, becoming the largest public chain issuance platform for PYUSD Stable Coin.

3. Reasons for PYUSD Choosing the Solana Public Chain

Currently, PYUSD is only issued on the Ethereum and Solana blockchains, with issuance starting on the Ethereum blockchain in August last year and on the Solana blockchain on May 31 this year. Although the Solana blockchain is 9 months behind, the current market share of Solana's PYUSD version is 63.61%, nearly twice the market share of the Ethereum version of PYUSD.

The reason why PYUSD chooses Solana as the main issuance platform for public chains is mainly related to the advantages of Solana public chain. For example, the gas cost of Solana public chain is very low, and the transaction confirmation speed is much faster than that of the Ethereum public chain. In addition, Solana public chain also provides many extension functions suitable for the current Web2 commercial environment.

For example, compared to the Ethereum mainnet, when deploying PYUSD on Solana, Paypal has also introduced some new features to provide a better user experience.

Features such as confidential transfer (merchants can choose the confidentiality of transaction amount), transfer pegging (similar to plugins), and memo field (users can add transaction information when making payments).

These functions not only serve as a finishing touch, but also are more in line with the payment scenarios in the current business environment, which is conducive to promoting the large-scale commercial application of PYUSD.

Actually, Stable Coin PYUSD and Solana blockchain still have a close relationship.

According to Wu, PayPal once prepared to cooperate with FTX in 2022 to issue PYUSD on Solana, and the two parties had already signed the relevant cooperation protocol, but it was later suspended due to FTX's default.

4**、**Paypal issuance stablecoin的战略意义

With the continuous development of blockchain technology and the promotion of global compliance of Crypto Assets, Web3 payment will be a major trend in the future. It can bring people closer to their desire for fast, cheap, and global payments. This will be the new generation of financial/payment infrastructure, and payment platforms can use Stablecoin payment functions to allow everyone to pay according to their own wishes.

Moreover, in the Cryptocurrency ecosystem, issuance of Stable Coin is a highly profitable business, with returns far exceeding those of most Cryptocurrency trading platforms. The revenue earned by Tether, a USDT Stable Coin issuer, from USDT issuance in a year has surpassed that of many tech giants. Consequently, an increasing number of financial giants are beginning to layout encryption Stable Coin, with Paypal being one of them.

As a global payment giant, Paypal already has a large market share in the Web2 payment field. The issuance of Paypal PYUSD is not only due to the consideration of the huge profits that stablecoins can bring, but also more importantly, it is a strategic layout. As a payment giant, Paypal not only needs to continuously expand its market share in the Web2 payment field, but also needs to expand its influence in the Web3 payment field in the future. Currently, Paypal has taken the lead in the Web3 payment field.

Unlike stablecoin issuers like Tether, PayPal is already a huge commercial empire in the Web2 world, with a global user base of up to 400 million. At present, PayPal supports 200 countries and 25 currencies globally, with a wide range of commercial applications.

Paypal can leverage its resource advantages to quickly expand the application scenarios of Stable Coin PYUSD, such as e-commerce payments, etc., this

For Paypal to seize the Web3 payment market, it has a huge driving role. In addition, the widespread application of PYUSD stablecoin can also promote the large-scale application of blockchain technology.

Currently, PYUSD is only issued on the Ethereum and Solana blockchains, and will be issued on more blockchains in the future.

Blockchain technology has been around for more than a decade, and cryptocurrency payments are now at a critical moment in history, full of potential and opportunities, just like the internet in 2000.

Paypal, as a global payment giant, has previously brought payments to the Internet, and now Paypal wants to bring payments on-chain, leading the payment into a new era of blockchain.