Circulation Grows Across Solana, Ethereum Layer 2s

Circle’s USDC has experienced a significant resurgence as its total circulating supply surged by 80% from its 2023 lows.

As revealed by Blockwork’s data analytics manager Dan Smith, the stablecoin’s supply has reached nearly $44 billion as of January 2, 2025. The latest figure represents a stark increase from its 2023 low of less than $24 billion.

USDC’s Blockchain Diversity Expands

The latest data reveals that Ethereum continues to dominate with 65% of USDC’s supply. However, other blockchains, including Solana and Base, hold 10%, and 7% of its supply respectively. Hyperliquid and Arbitrum followed suit, capturing 5% and 3% of USDC’s growing share of supply, respectively.

This diversification is also in contrast to the 2023 period when Ethereum accounted for 85% of the supply. The shift appears to be fueled by retail traders migrating to a cheaper alternative – Solana –  for speculative trading on meme coins and AI agent tokens.

Additionally, the rise of Layer 1 networks like Hyperliquid, designed for low-latency trading, and Ethereum Layer 2 solutions, such as Base and Arbitrum, evidenced the evolving preferences of crypto users.

This aligns with the stats posted by Circle’s Peter Schroeder, which revealed that the adoption of USDC on Ethereum Layer 2 solutions skyrocketed in 2024, with supply jumping from $1.9 billion to $8.1 billion. Base led the growth with a 26x increase, followed by a 4x rise on Arbitrum.

The Ethereum Dencun upgrade in March further ramped up scalability and reduced transaction fees below $0.01. Meanwhile, the total USDC transaction volume exceeded $15 trillion during the year. Solana began 2024 as the leader in USDC transactions but saw activity decline due to reduced MEV bot usage by market makers. On the other hand, Base’s momentum grew steadily, leading to transaction volumes over the last four months of the year. By the end of the year, USDC had recorded more than 100 million unique transactions.

USDC Rebounds

Currently, USDC is trailing behind Tether (USDT), which dominates the market by market capitalization. USDC and USDT nearly reached parity in 2022, but the former declined, coinciding with the Collapse of Silicon Valley Bank (SVB), where Circle held reserves.

The loss of the dollar peg was triggered when the fintech firm revealed that $3.3 billion – roughly 8% of its reserves – were at risk. However, market confidence rebounded as USDC restored its peg within four days.