PayPal's PYUSD Stablecoin Achieves Remarkable Growth on the Solana Blockchain

PayPal’s decision to extend its PYUSD stablecoin to the Solana blockchain is proving highly successful. The digital asset now ranks among the top six stablecoins

PayPal’s (NASDAQ:PYPL) efforts to expand the reach of its PYUSD stablecoin are paying off, with the digital asset now ranking among the top six stablecoins and its supply quietly approaching the $1 billion milestone.

According to CoinGecko, PYUSD’s supply has grown by more than $300 million, or 45%, in the past month. This makes it the fastest-growing stablecoin among its peers, with a current supply of around $820 million.

As reported by Benzinga earlier this month, PayPal launched PYUSD on the Solana (CRYPTO: SOL) blockchain in May. The stablecoin was previously available only on the Ethereum (CRYPTO: ETH) blockchain since its launch in August 2023.

PYUSD’s integration with the Solana blockchain appears to have played a crucial role in its recent growth. Several Solana-based decentralized finance (DeFi) protocols, such as Kamino and Drift, are offering attractive incentives to users.

For instance, Kamino is currently providing users with an annual return of nearly 20% for depositing PYUSD in its Solana-based DeFi protocol. Similarly, Drift is offering users the opportunity to earn high yields on their PYUSD deposits.

However, some market observers have expressed skepticism about the sustainability of this approach, especially given the industry’s experience with high-yielding stablecoins, such as Terra’s failed algorithmic UST stablecoin.

It’s important to note that PYUSD is backed by the dollar, with each PYUSD token issued being supported by an equivalent dollar in reserve. This differs from UST, which was not fully backed by fiat currency or other hard assets.

The high yields offered by Solana-based DeFi protocols have led to a significant portion of PYUSD being shifted to Solana. According to DeFiLlama, PYUSD on Solana now totals over $462 million, compared to around $366 million on Ethereum.

This makes PayPal-backed assets the third-largest stablecoin on Solana, following Circle’s USDC and Tether’s USDT.

Meanwhile, the rapid growth of PYUSD on Solana has also resulted in wider adoption on cryptocurrency exchanges.

One of the top three cryptocurrency exchanges, Bybit, now supports PYUSD deposits and withdrawals on the Solana network.

Bybit recently announced that it had reached 40 million users, adding 10 million new users in less than a month. The exchange is known for offering a user-friendly platform and a wide range of trading options, including spot, derivatives and NFT trading.

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