In the current bear market, investors are gravitating towards stablecoins due to their promise of stable returns and lower underlying risks, according to a report by IOSG. While all products saw a rise in Total Value Locked (TVL) during the bull market, the bear market has highlighted significant performance disparities. High-risk products are facing compounded risks, with funding rate strategies experiencing reduced returns and market-making vaults encountering manipulation risks. Emerging Real World Asset (RWA) protocols introduce third-party participants, leading to issues of opacity and limited liquidity.
The report suggests that if all Layer 1 blockchains were to deploy their own stablecoins instead of relying on USDT or USDC, their revenue could potentially increase by two to three times, given the current stablecoin supply dynamics.
Stablecoins Gain Traction Amid Bear Market as Investors Seek Stability
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