Stablecoins: The Big Whale's major investigation

Stablecoins: The Big Whale's major investigation

Little known just a few years ago, stablecoins have become a must-have.

These cryptocurrencies indexed to stable assets (like currencies) are used by millions of investors and play a central role in decentralised finance applications (DeFi), where some offer particularly tempting returns (sometimes up to 20% a year). Even institutional investors are snapping them up, as they represent the ideal bridge between traditional finance and the crypto universe.

As a sign of the trend, the capitalisation of stablecoins has risen by 548% since the start of 2021 to reach a global value of $188 billion, or 10% of the global crypto market. There is a huge variety of them, each distinguished by the stability of its price relative to the traditional currency it replicates, the nature of the reserve, the degree of decentralisation of the system or its compliance.

In this report, you will discover a complete overview of the sector, not forgetting the euro stablecoins that are starting to make inroads despite lagging behind their US equivalents, which are crushing the market.


This type of stablecoin is administered by a company. The way it works is very simple to understand: the company issues tokens whose value is equal to the amount it holds in a reserve. Most of the time, a stablecoin is backed by cash placed in a bank account to guarantee its value.

👉 USDT (Tether) - $83 billion

USDT is the oldest and most widely used stablecoin in the world. It was created in Hong Kong by the company Tether in 2014. "USDT has the best liquidity on the secondary market," Sam Bankman-Fried, founder of exchange platform FTX, tells us. "Its volumes on exchanges and over-the-counter are huge, so we can trade large quantities without too much impact," he stresses.

The business model is based on a 0.1% commission charged each time a company requests the creation of new USDT units. You therefore have to pay USD1 million plus USD1,000 in fees to obtain USDT1 million. The cost is the same in the other direction (USDT to the dollar).

Tether has been at the centre of much controversy, not least over its reserve. In 2021, the company agreed to pay $61 million to avoid prosecution in the United States. The company was accused of lying about the precise content of its reserve. Contrary to the company's claims, the reserve was not fully backed by dollars between 2016 and 2018.

Still today, the USDT reserve is attracting some criticism. In its latest audit report published in December 2021, Tether states that it is 84% cash and equivalents (government bonds, certificates of deposit, etc.), but also debt securities and cryptocurrencies. Against this backdrop, some decentralised finance protocols (DeFi) have chosen to limit the use of USDT. On Aave, for example, it is not possible to use it as collateral to borrow other cryptocurrencies.

Should we be concerned about Tether's solvency? "We have regularly exchanged USDT for dollars without encountering any problems," explains Sam Bankman-Fried, adding, "We have spoken directly with the people and banks who work with Tether and we are fairly confident that they are in the clear."


  • Most liquid
  • Available on almost all exchanges
  • Circulates on 8 blockchains


  • Sensitive to regulation
  • Lack of transparency

👉 USDC (Circle) - $51 billion

Created in response to the "inadequacies" of the USDT, the USDC is intended to be much more secure. Its governance is provided by the two American giants Circle and Coinbase. It also has the support of institutional players, including some Wall Street banks.

USDC is not only used for trading activities. The Visa and Mastercard payment networks are currently experimenting with it as an intermediary between the traditional financial system and cryptocurrencies.

It works more cheaply than USDT: there are no fees when tokens are issued or destroyed. Its process is also much faster. "The USDC uses the SEN network of the American bank Silvergate, and we can credit transfers 24/7," explains Sam Bankman-Fried, "In comparison, the USDT is dependent on bank opening hours. It can take hours or even a day to create or return USDT," he notes.

The USDC's reserve is made up entirely of cash and short-dated US Treasuries. "Even if its reserve is not 100% cash, the USDC is currently the best compromise between security and liquidity," explains Pascal Tallarida, creator of Jarvis Network, a protocol for exchanging a multitude of stablecoins.


  • Best compromise between liquidity and security
  • Most widely adopted in decentralised finance
  • Circulates on 8 blockchains


  • Very centralised
  • Sensitive to regulation

👉 BUSD and USDP (Paxos) - $18bn and $0.9bn

The BUSD is a stablecoin issued on a white label basis by US company Paxos on behalf of exchange platform Binance. It has a capitalisation of $18 billion. Paxos also issues USDP (capitalisation of $950 million) and works in the same way: a token backed by a bank account with dollars on it and nothing else.

According to Pascal Tallarida, Paxos stablecoins are the safest in the sector: "There is nothing other than dollars in the reserve and the product is very well audited".


  • Safest reserve
  • Partnerships with leading players


  • Very centralised
  • Very sensitive to regulation
  • Less liquid than its competitors


Centralised stablecoins are favoured by regulators, because it is possible for issuing companies to freeze funds at an address in the event of activities considered illegal. Nevertheless, their future is not necessarily all rosy, especially in the European area: the draft Markets in Crypto-Assets (MiCA) regulation seeks to impose "Crypto-Asset Service Provider" status (the European equivalent of digital asset service provider status, ed. note) on all stablecoin issuers.

According to Victor Charpiat, a specialist in financial regulation, "large issuers such as Tether or Circle could be tempted not to comply with this regulation which would prevent them from being available in Europe."


Unlike centralised projects, which depend on the security and reputation of the companies issuing them, decentralised stablecoins operate without the involvement of a central authority. They are protocols that allow any user to create or destroy stablecoins under certain conditions.

Their reserve is made up solely of cryptocurrencies and not cash. To deal with the risk of volatility, it is essential to over-collateralise the reserve. For example, you need to deposit $150 in ethers to generate $100 in stablecoins.

Most of the time, these systems include a threshold for liquidating the cryptocurrencies placed in the reserve in the event of a fall in prices so that the stablecoins in circulation retain their value.

👉 DAI (MakerDAO) - $9 billion

DAI is one of the oldest (2017) and most widely used decentralised stablecoins. Its reserve is mainly made up of USDC and ethers.

its MakerDAO issuer protocol has been through several shocks in recent years, most notably during the financial crash of March 2020 (Covid crisis). The rapid and vertiginous fall in the ether price had led to a major series of liquidations, threatening its entire system. But it is still there, and the project sponsors have never offered any subsidies to use MakerDAO. Its growth is purely organic, which is quite rare in the sector.

Today, the majority of its reserve is backed by USDC to limit the risks of liquidation. This decentralised stablecoin is therefore mostly protected by a... centralised stablecoin. And is therefore exposed to the risks of the latter.


  • Historical resilience
  • Organic growth


  • Reserve mainly in USDC
  • Only on Ethereum

👉 MAY ( - $300 million (also known as QiDAO) is a protocol based on the principle of over-collateralised lending introduced by MakerDAO. This protocol differs from its predecessor in that it supports many more blockchains and issues its stablecoins from a wider range of cryptocurrencies. MAIs are mostly backed by BTC and ETH.


  • Support for most blockchains
  • 9 cryptocurrencies available for collateral


  • Hasn't been through a stress test yet


Decentralised finance protocols can have flaws in their design. If one of them is exploited by a hacker, the funds in the reserve are likely to be stolen.


Their designers intend to address the weak point of decentralised stablecoins, where a large part of the reserve remains unused to support over-collateralisation. Here's an example to help you understand the "problem": for 17 billion dollars blocked in MakerDAO, only 11.5 billion DAIs can be issued. The remaining 5.5 billion have no other use than to maintain the over-collateralisation of the system to avoid liquidations.

Algorithmic stablecoins consist of optimising the mobilised capital as much as possible, but this system has consequences for price stability (which can pose a problem for a stablecoin).

👉 UST (Terra) - $19 billion

UST is a dollar stablecoin developed on the Terra blockchain. Its price stability is based on an arbitrage mechanism that consists of destroying or creating LUNA, Terra's token.

The third-largest stablecoin on the market after just a year and a half in existence, its popularity can be explained by the significant returns it provides when deposited in the Anchor lending protocol: 18% annually!

Although completely decentralised, the latter came close to bankruptcy following the rapid fall in the LUNA price in May 2021. Aware of this risk, the Luna Foundation Guard has acquired 11,700 bitcoins in recent months with the aim of strengthening the UST's stability.


  • Totally decentralised
  • Available on many blockchains
  • High liquidity


  • Significant risk of mismatch with the dollar

👉 FRAX ( - $2.6 billion

FRAX mixes a pool of "traditional" collaterals mostly composed of USDC, as well as an algorithmic pool based on its FXS governance token. The latter is created or destroyed according to the FRAX stablecoin price, so that the difference with the dollar price is always as close to zero as possible. It is presented as a response to the UST and its large price variations against the dollar.


  • Improved price anchor management


  • Limited use cases
  • Still relies heavily on the USDC


The biggest risk of algorithmic stablecoins comes from the way the protocols themselves work. Algorithmic stablecoins are notorious for having difficulty tracking the value of their underlying currency. Some, such as Iron Finance's IRON and the FEI stablecoin, are infamous for losing their currency's peg and causing major disasters...


As you can see, dollar stablecoins are crushing the market. According to the figures, they account for 99% of volumes... And in euros? We have a long way to go, but the plans are there. "There are a lot of good, young projects around the single European currency," insists Victor Charpiat.

👉 EURT (Tether) - €249 million (centralised)

EURT is another stablecoin developed by the company Tether. Like its older sibling the UDST, it is backed by a reserve that is supposed to contain the same value in cash and equivalents. It is important to point out that Tether does not provide a detailed audit for this stablecoin, which circulates on Ethereum.


  • Liquid
  • Better and better listed on exchanges


  • Untransparent

👉 EURS (Stasis) - €129 million (centralised)

EURS is another centralised stablecoin available on the Ethereum blockchain. It differs from its competitor Tether in that it publishes regular audits of the composition of its reserve.


  • Transparent


  • Moderately liquid

👉 EURL (Lugh) - €10 million (centralised)

The newest of the centralised euro stablecoins, EURL is being developed mainly on the Tezos and Ethereum protocols by French retail group Casino. Its €10 million reserve is held by Société Générale. While it has been dedicated solely to Coinhouse customers since its launch in March 2021, its issuer recently received the green light from the regulator to be used everywhere else. According to our information, it will soon be used by large companies wishing to offer NFTs to their customers.


  • Very attentive to regulation
  • Supported by large traditional companies
  • Present on Tezos and Ethereum


  • Available on few marketplaces

👉 agEUR (Angle) - €73 million (decentralised)

Angle is an innovative French project that allows stablecoins to be issued in exchange for other cryptocurrencies (mainly USDC and DAI). The advantage of this formula is that there is no need to over-collateralise the reserve: to obtain an agEUR (the name of the stablecoin), you only provide the equivalent in euros.

The volatility risk is covered by a futures platform based on the cryptocurrencies accepted by Angle. Traders are on hand to cover losses and ensure that the agEUR maintains parity with the euro. The system is complemented by a lending protocol in which other players can deposit cryptos in exchange for returns.


  • Mix between stablecoin issuer and decentralised exchange
  • Good liquidity


  • Only on Ethereum
  • Majority of reserve in USDC

👉 PAR (Mimo Capital) - €12 million (decentralized)

Mimo Capital takes over MakerDAO's over-collateralized lending principle: users deposit a certain number of cryptocurrencies as collateral in order to issue a stablecoin from them.

Mimo differs from MakerDAO in several respects: the stablecoins issued (PAR) are euros instead of dollars and the protocol operates on the Polygon and Fantom networks to avoid Ethereum's high fees.


  • Integration of Polygon and Fantom
  • More decentralised than DAI


  • Low liquidity

👉 jEUR (Jarvis) - €3.6 million (decentralised)

The jEUR is a euro stablecoin developed by Synthereum (Jarvis Network), a protocol specialising in issuing stablecoins representing different traditional currencies.

Users can deposit USDC as collateral to issue jEUR. When these jEUR are sold, the jEUR are burnt and the USDC are returned to the seller. Users can also provide cash to the protocol to receive fees charged by trading and lending collateral.


  • Integration on Ethereum, Polygon and BNB Chain
  • Large number of exchangeable currencies


  • Use exclusively dedicated to stablecoins
  • Low capitalized value


👉 RAI ( - $51 million

The principle of is similar to that of MakerDAO: it is a protocol in which any user can place ether (ETH) as collateral to issue stablecoins. Unlike all the other stablecoins mentioned, the RAI does not follow the price of any particular traditional currency: its value fluctuates constantly around $3.

This is a clever choice, as it could save it in the event of regulatory tightening. As it is not named after a traditional currency and is not backed by the value of any of them, it could thus slip through the cracks.

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