The composable nature of Ethereum begets the layering of defi primitives and assets. One clear, but a generally underappreciated example of this is ‘smart’ stablecoins. Before describing ‘smart’ stablecoins, let’s first appreciate stablecoin’s impressive year. Stablecoin’s have found a clear product-market fit in 2020 most aptly represented by USDT’s circulating supply growth from ~$4.1 billion to ~$15.2 billion. What is equally, if not more important, is where these stablecoins are going and trending towards. Tether supply in smart contracts has grown from ~1.9% to 10.9% percent YTD. USDC supply in smart contracts has grown from ~6.7% to 56.7% YTD. This is indicative of the general utility (al be it much of it spurred by yield farming speculation) of defi protocols driving stablecoin demand.
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