How Many Stablecoin Dollars ACTUALLY Exist?
A deep dive into accurately calculating stablecoin metrics at Artemis
Introduction
The world of stablecoin data can be complex, with various providers offering different figures. This complexity stems from the intricacies of blockchain networks and the unique characteristics of individual stablecoins. Our goal is to create a consistent view across networks and stablecoins, allowing for meaningful comparisons between ecosystems as diverse as Solana and Ethereum.
At Artemis, providing the most accurate and reliable stablecoin data is our number one priority. Every stablecoin has its own quirks and we take a lot of care to ensure the nuances of various stablecoins are taken into account when calculating metrics.
In this post, we highlight some of these nuances.
Bridged vs. Pre-minted vs Circulating supply
ERC and Non-ERC Token Supply of DAI
Genesis Stablecoin Supply
Celo’s Unique Stablecoin Features
Circulating Stablecoin Supply
This metric represents the amount of a stablecoin that is readily accessible for transactions. To calculate this, we start with the total supply on chain by summing the total balances in every address and make two important adjustments:
Bridged Supply
We subtract the amount of stablecoin supply that has been bridged from one chain to another. This bridged supply typically resides in a bridge contract on the source chain and is not accessible to users unless they bridge back.
For example, USDT is not natively supported by Tether on Arbitrum or Optimism, yet a significant amount (2.8B and 1.1B respectively) exists on these L2 network. This supply has been bridged from Ethereum, effectively locking it in bridge contract on Mainnet. By subtracting this bridged supply, we provide a more accurate picture of the circulating supply on the original chain.
To ensure accuracy, we maintain a list of major bridge contract addresses and exclude their balances from our total supply calculations (Tron, Ethereum).
Pre-minted Supply
Often, stablecoin issuers mint supply but the supply is not available for circulation. Celo is a great example of this. Tether has minted an extra ~$200 mil USDT that is “Authorized but not Issued.” Our current thesis is stablecoin issuers engage in pre-mints in order to more easily meet future demand. This pre-minted supply should not be counted into circulating supply because it is still held by the Tether organization and is not accessible to transfer between users. This occurs in two common scenarios:
a) Tether (USDT) pre-mints supply on most chains but keeps it in a Tether “treasury." This pre-minted supply is not yet authorized to enter the market. (Tether Transparency Site)
b) Stablecoins, specifically USDC on Solana often use a pre-mint address in order to programmatically mint and burn stablecoins (Circle Pre-Mint Explanation).
In both cases, we treat these addresses as mint and burn addresses, excluding their balances from the circulating supply (Ethereum, Solana, Celo).
Unique Considerations for Specific Stablecoins
DAI and the Non-ERC20 Token Supply
Understanding DAI's supply requires knowledge of both the ERC20 token standard and the Maker protocol. While about half of the DAI supply exists as standard ERC20 tokens, the other half resides within the Maker protocol, using a different accounting system.
To account for the supply within the Maker protocol, we focus on the amount of DAI in the POT contract to generate the DAI Savings Rate (DSR). We track move and suck events from the VAT contract, which are analogous to transfer events in the ERC20 system, to determine the total supply in the POT. The sum of this amount and the ERC20 token supply gives us the total DAI supply.
Check out this blog post for more info on Maker.
Optimism Regenesis Supply
Due to Optimism's regenesis, we had to develop a special method to accurately calculate stablecoin balances from the network's genesis block. There is no complete dataset of events pre-regenesis. To do this we created a recursive process to:
Gather a list of stablecoin-holding addresses
Query contract balances at block 0
Use these as initial balances in our calculations
Adjust balances based on subsequent transfer events
Identify addresses with negative balances
Repeat the process until no negative balances remain
This approach ensures we capture the correct initial state of stablecoin balances on Optimism. In order to pick a reasonable initial dataset we used Dune’s OV1 decoded transfer events table.
Tron Genesis Supply
USDT on Tron presents a unique case where the first transfer occurs from a wallet, not from a minting event. To account for this, we assign an initial supply of 10 USDT to the originating address, ensuring accuracy in the early days of USDT on Tron.
Celo Gas Fees and Epoch Rewards
Celo is a stablecoin focused chain trying to create infra that can best enable real world use-cases. We see this with two distinct modifications to the EVM that effect how users interact with stablecoins.
Gas Fees
Celo allows for gas fees to be paid out in not only the native token but also stablecoins. These transfers does not emit events on chain and the data is stored at the transaction level. In order to take these transfers into account for balances we append all transactions where the fee_currency is not null. See our open source DBT repo to read the sql model.
Validator Epoch Rewards
Celo pays validators every epoch with what they call Validator Rewards. Unlike other EVM chains that pay their validators in the native currency, Celo is unique in that is pays validators each epoch in cUSD. These events have an effect on total supply and balances of each address but are not traditional EVM Transfer Events. These events are emitted in special blocks called Epoch Blocks. In order to take these events into account we must extract the data directly from a Celo node and parse the data separately.
Conclusion
Calculating accurate stablecoin metrics requires a deep understanding of various blockchain networks, stablecoin implementations, and the nuances of cross-chain interactions. At Artemis, we continually refine our methodology to provide the most precise and valuable data to our clients.
By accounting for bridged supply, pre-minted tokens, and the unique characteristics of stablecoins like DAI, we offer a comprehensive view of the stablecoin ecosystem. Our commitment to accuracy extends to addressing edge cases like Optimism's regenesis and Celo’s unique stablecoin implementation.
We hope this deep dive into our methodology provides clarity on how we calculate our stablecoin metrics. As always, we remain dedicated to improving our processes and delivering the highest quality data to support informed decision-making in the dynamic world of cryptocurrencies and decentralized finance.