How Ethereum Overtook Tron in Tether Dominance

Table of Contents

• Key Points
• Ethereum vs. Tron: A Closer Look at the Figures
• Active Address Trends
• Implications for the Stablecoin Market

Key Points

Ethereum has regained its spot as the leading blockchain for Tether dominance, overtaking Tron in the process. Ethereum now accounts for 44.56% of the total Tether supply, slightly surpassing Tron’s 42.97%. This shift in dominance highlights Ethereum’s competitive resurgence, aided by recent upgrades, including the transition to a proof-of-stake (PoS) consensus mechanism and improvements in scalability and transaction costs.

Ethereum vs. Tron: A Closer Look at the Figures

Analysis of DefiLlama’s chart reveals the substantial share of the stablecoin market controlled by Ethereum and Tron. Together, they account for over 87% of Tether’s market share, while other blockchains, like Binance Smart Chain (BSC) and Arbitrum, hold significantly smaller shares—3.52% and 2.24%, respectively.

This duopoly in the stablecoin market is driven by Ethereum’s scalability improvements and Tron’s low transaction fees. For much of the year, Tron had been leading the charge in USDT transactions, largely due to its efficient network and cost-effective operation. However, Ethereum’s shift to PoS and the subsequent reduction in gas fees have positioned it to reclaim its dominance.

Active Address Trends

Insights from Dune Analytics provide a deeper look into the user activity on both Ethereum and Tron. Ethereum has maintained a steady upward trend in daily active addresses, consistently surpassing 1.5 million, excluding smart contract interactions. This growth highlights Ethereum’s increasing utility beyond stablecoin transactions, particularly in decentralized finance (DeFi), non-fungible tokens (NFTs), and gaming applications.

On the other hand, Tron has experienced a more volatile trend in active addresses, with fluctuations in usage over time. Despite these ups and downs, Tron continues to remain a formidable competitor with nearly double the number of active addresses compared to Ethereum, solidifying its position in the market.

Implications for the Stablecoin Market

Ethereum’s regained dominance in the Tether supply has important implications for the stablecoin market. Ethereum’s ability to scale effectively and lower transaction fees has drawn back users who had previously migrated to Tron for cheaper alternatives. This trend suggests that Ethereum is increasingly attractive to institutional users, who value scalability and reduced fees.

Meanwhile, Tron’s continued strength, with near-parity to Ethereum in terms of Tether dominance, ensures healthy competition within the stablecoin market. Tron’s focus on affordability and accessibility allows it to maintain a strong market share, particularly among demographics that were previously underserved by Ethereum’s higher transaction costs.

At the time of writing, USDT holds over 70% of the stablecoin market share, with a market capitalization exceeding $133 billion, demonstrating the growing importance of stablecoins in the broader cryptocurrency ecosystem.