Ethereum-Based Stablecoins Surge 750,000 Users Weekly

Ethereum-based stablecoins have reached a significant milestone, with over 750,000 unique users interacting with tokens like USDT and USDC in a single week, marking the highest point ever recorded. This surge in user activity reflects a clear upward trend in stablecoin engagement over the past year, indicating that stablecoins are moving beyond speculative trading to real-world utility with speedy integration.

The momentum has been especially consistent since early 2025, with users increasingly turning to stablecoins not just for speculation, but for practical applications. This rise aligns with what many are calling “stablecoin season,” driven by both retail users and a growing institutional presence. The stablecoin market on Ethereum remains heavily concentrated, with USDT and USDC together accounting for over $114 billion of the network’s $134 billion stablecoin supply. USDT leads with $73 billion, while USDC holds a firm second at $41 billion. However, new players—from algorithmic models to fiat-backed alternatives—are beginning to chip away at the duopoly, sparking more competition among issuers. Firms are looking to differentiate via lower fees, better yields, and unique user incentives, all of which could translate to better offerings.

As payment processors and financial institutions start integrating stablecoin infrastructure, their use cases are expanding fast. From cross-border settlements to on-chain payrolls, stablecoins are stepping in as practical solutions to age-old financial inefficiencies. This broad adoption is helping establish Ethereum-based stablecoins as key pillars of digital commerce, especially in emerging markets and high-inflation economies. The growing user base is sparking more competition among issuers, with firms looking to differentiate via lower fees, better yields, and unique user incentives, all of which could translate to better offerings.

This expansion is largely attributed to the widespread adoption of USDT (Tether) and USDC (Circle), which remain the dominant stablecoins within decentralized finance (DeFi) platforms. Their robust infrastructure and liquidity provision have been instrumental in attracting both retail and institutional users. Moreover, emerging stablecoins such as PYUSD are beginning to influence the market dynamics, contributing to a more diversified and competitive stablecoin landscape on Ethereum. This trend highlights the growing confidence in Ethereum’s Layer-1 network as a reliable and efficient platform for stablecoin transactions.

Historically, Ethereum’s Layer-2 scaling solutions gained traction during periods of high gas fees, notably in 2021 and 2022, as users sought cost-efficient alternatives. However, recent developments indicate a shift back to Layer-1, driven by reduced transaction costs and enhanced network throughput. This shift underscores a renewed market preference for Ethereum Layer-1 solutions, fueled by lower transaction fees and enhanced network efficiency. Financial analysts suggest that the resurgence of Layer-1 activity could reshape liquidity flows within the Ethereum ecosystem, potentially reversing the migration towards Layer-2 solutions observed in previous years. Addressing cross-layer liquidity fragmentation remains a strategic priority to maintain Ethereum’s competitive advantage in the evolving decentralized finance environment. Industry experts emphasize that resolving liquidity fragmentation across Ethereum layers is crucial for sustaining its DeFi dominance.

The increased stablecoin activity has directly impacted Ethereum’s on-chain transaction volume, leading to a significant rise in fee revenue. This uptick reflects a positive market sentiment, reinforcing Ethereum’s position as the backbone of DeFi operations. Both retail users and institutional investors are driving this growth, attracted by the network’s improved scalability and cost-effectiveness. The launch of Kaia's Gas Abstraction feature in July 2025 is expected to further enhance the user experience by enabling stablecoin payments for transaction fees. This feature is part of a broader effort to transform Web3 and make digital asset transactions more accessible and user-friendly. By integrating stablecoin payments into the transaction process, Kaia aims to reduce the complexity and cost associated with traditional transaction methods, thereby attracting more users to the Ethereum network.

The growing adoption of Layer-1 technologies and the increasing use of stablecoins on the Ethereum network highlight the network's potential to become a leading platform for digital asset transactions. As the network continues to evolve and attract more users, it is poised to play a crucial role in the future of finance, offering secure, efficient, and innovative financial services to a global audience.