Paypal’s PYUSD Adoption Setback
Paypal’s Ethereum-based stablecoin, PYUSD, has struggled to gain traction among crypto investors since its launch. On-chain data from Nansen shows that only a small percentage of Paypal’s user base is currently holding and using PYUSD in self-custody wallets. The lack of demand for PYUSD could be attributed to its limited utility and the inability to earn interest on the stablecoin. Additionally, the stablecoin’s holdings on crypto exchange wallets are low, accounting for just 7% of its total supply. Despite high expectations for wider adoption, the stablecoin has failed to meet these expectations. Smart money investors seem uninterested, and the stablecoin is criticized for its centralized nature and high gas fees on the Ethereum network.
Key Points:
- 90% of PYUSD’s total supply remains with its issuer, Paxos.
- The stablecoin has low adoption and holdings on self-custody wallets.
- It lacks utility and does not offer interest, leading to a lack of demand.
- Only 7% of PYUSD’s total supply is held on crypto exchange wallets.
- The stablecoin has not lived up to expectations for wider adoption.
Expectations on Ethereum for the Stablecoin
Despite Paypal’s stablecoin launch, Ethereum has not seen any significant benefits in terms of increased network activity or Total Value Locked (TVL). Crypto experts criticize the choice of Ethereum due to its high transaction fees. To improve the user experience, Paypal may need to subsidize transaction costs or support PYUSD on other networks with cheaper gas fees.
Hot Take:
Paypal’s PYUSD stablecoin has failed to capture the interest of crypto investors due to its limited utility and lack of interest earning potential. The low adoption and holdings on self-custody wallets, as well as the centralized nature of the stablecoin, have hindered its circulation. Additionally, the choice of Ethereum has been criticized for its high gas fees. Overall, Paypal’s attempt to promote wider adoption and introduce cryptocurrencies to the masses through PYUSD has fallen short of expectations.
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