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Report: Less than 6 accounts control 80% of the wealth of the main stablecoins

A report published by Cryptosoft has found extreme centralization of wealth among many of the top stablecoins; at least 80% of the total capitalization of the top five stablecoins is in less than six accounts.

CoinMetrics found that the majority of at least 20% of transfers made using most stablecoins are valued at less than USD 100, showing significant adoption of stable tokens as a means of payment.

The report also found that more than 40% of transactions made using the Paxos Standard Token (PAX) are directly linked to a single multi-level marketing Ponzi scheme, or MLM.

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The Stablecoins show an extreme centralization of wealth
The report found that many stablecoins show extreme centralization of wealth; fewer than six accounts in the Gemini Dollar (GUSD), Binance USD (BUSD), Huobi Dollar (HUSD), Tether (USDT) and USDK networks represent more than 80% of the respective capitalization of each token.

The USDT issued in Ethereum constituted the most pluralistic market of stablecoins by far, as almost 1,600 accounts represented 80% of the wealth. It was followed by USD Coin (USDC) and TrueUSD (TUSD) with almost 200 accounts each, followed by Omni-based USDT with over 150

Stablecoin wealth distribution

In terms of the total number of transfers with stable tokens, the USDC is the second most distributed; over 20% of the purses drive 80% of transfers, followed by the USDT and the Omni-based GUSD at almost 20%, and the TUSD at almost 15%.

Stablecoin activity distribution

Paxos reportedly includes fuel for the Ponzi MLM
At first glance, the findings seemed to show significant pluralism in the Paxos network, with almost 50% of the purses representing 80% of the total token capitalization.

However, a closer inspection shows that the two most active Paxos accounts are directly linked to the BSC Ponzi WMM. The scheme has seen an exponential growth in user activity over the past year; it now represents almost 40% of all Paxos network activity.

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Percentage of PAX transactions associated with MMM BSC Ponzi

CoinMetrics also found that the most active Tron-based USDT accounts were associated with „dividend“ payments, which accounted for over 90% of network activity on certain days.

A subscription model similar to Spotify is proposed for warranty payments

A new blockchain protocol funded by the Web 3.0 Foundation promises to reduce collateral requirements in DeFi and cross-string applications.

Interlay received a foundation grant to build a bridge between Polkadot and Bitcoin (BTC). The latest document resulting from this project, „Promise: Harnessing Future Gains for Collateral Reduction,“ proposes a new protocol.

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Alice and Bob have an ongoing relationship
The easiest way to explain how Promise works is through an example. Let’s say that Alice hires Bob as a service provider for a number of tasks, and that this relationship is an ongoing one, where Bob periodically provides a service to Alice and, each time, she pays him 1 Ether.

How Promise works. The source: Promise whitepaper.

Normally, Bob would have to lock up a guarantee of 1.5 Ether, in case he accepted payment and did not perform the task. With Promise, Alice, instead of sending the Ether directly to Bob, would lock it up with Promise. Bob would receive periodic payments through Promise upon delivery of proof of service. Because future The News Spy, Bitcoin Evolution, Bitcoin Code, Bitcoin Trader, Bitcoin Circuit, Bitcoin Era, Bitcoin Billionaire, Immediate Edge, Bitcoin Profit, Bitcoin Revolution act as an added bonus, Bob might be able to deposit a smaller amount of security. The key here is that the relationship should be ongoing, not unique.

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Music to our ears
Cointelegraph interviewed one of the creators of Promise, Dr. Dominik Harz, who is currently in Japan due to the outbreak of COVID-19. In his opinion, Promise does for transactions involving collateral what Spotify did for the music industry:

„And it transforms this short interaction into this sequential game or simply as a classic subscription model. Imagine if you used Spotify. And instead of paying a monthly subscription, you’d pay for each track individually. Well, each individual song could be super cheap. There’s a mental overload. This mental transaction costs where you think, ‚oh, I really want to hear the next song? And it’s barely worth a nickel. Whereas if you just have a subscription, it’s all right.“