How Did Ethereum Overtake Tron in Tether Market Dominance? Unraveling the Shift

Key Points

• Ethereum has reclaimed its position as the leading blockchain for Tether dominance, surpassing Tron.
• Ethereum now accounts for 44.56% of the Tether supply, slightly ahead of Tron’s 42.97%.

Ethereum [ETH] has officially taken back its spot as the premier blockchain for Tether [USDT] dominance, outpacing Tron [TRX].

Recent market data indicates that Ethereum is now responsible for 44.56% of the Tether supply, marginally outstripping Tron’s 42.97%.

Ethereum vs. Tron: A Closer Look at the Figures

Analysis of DefiLlama’s chart exposed the degree of Ethereum and Tron’s dominance in the stablecoin market.

Ethereum and Tron collectively held over 87% of Tether’s market share. Other blockchains, such as Binance Smart Chain [BSC] at 3.52% and Arbitrum [ARB] at 2.24%, held significantly smaller shares.

This highlights the duopoly in the stablecoin space, with Ethereum and Tron leading the way.

Tron had consistently been ahead in USDT transactions, supported by its low transaction fees and efficient network. However, Ethereum’s comeback can be attributed to its shift to a proof-of-stake (PoS) mechanism following the Merge and subsequent upgrades that have significantly reduced gas fees.

Active Address Trends

Analysis of active addresses on Dune Analytics provides an interesting snapshot of user activity on both blockchains.

Ethereum has shown a steady upward trend, maintaining over 1.5 million daily active addresses, excluding smart contract interactions. This consistent growth highlights Ethereum’s utility beyond stablecoins, including DeFi, NFTs, and gaming.

On the contrary, Tron showed a relatively volatile trend in active addresses, with significant ups and downs over time. Despite these fluctuations, Tron remains a strong competitor, with almost double the number of active addresses recorded.

Implications for the Stablecoin Market

Ethereum’s regained dominance in Tether supply signals its increasing competitiveness in the stablecoin market, particularly for institutional users.

The network’s scalability and fee reduction improvements seem to be working, attracting back users who migrated to cheaper alternatives like Tron.

Meanwhile, Tron’s near-parity with Ethereum suggests a healthy competition that benefits the broader blockchain ecosystem.

Its focus on affordability and accessibility ensures that it retains a substantial market share, catering to demographics underserved by Ethereum’s previously high costs.

At the time of writing, USDT holds over 70% of the stablecoin market share, with a market capitalization exceeding $133 billion.