Written by: Tanay Ved, Coin Metrics

Translated by: Luffy, Foresight News

Stablecoins have evolved from trading tools into the cornerstone of on-chain liquidity, providing around-the-clock, global value storage, transfer, and settlement channels. Since 2025, the on-chain settlement scale of stablecoins has decoupled from the cryptocurrency spot trading volume. This year, the adjusted on-chain transfer volume of stablecoins once surpassed 250 billion dollars per day, while exchange trading volume has dropped to about 18 billion dollars daily.

From 2026 to present, stablecoins have achieved a cumulative adjusted transfer total of 41.7 trillion dollars. Although the total issuance of stablecoins has recently retreated, the on-chain turnover frequency of unit funds has continued to rise compared to previous years. The application scenarios are also broadening, covering exchange liquidity management, DeFi collateral scheduling, as well as emerging personal payments and corporate cross-border fund flows.

This article penetrates the surface of trillion-level stablecoin transfers, analyzing the turnover rates of USDC and USDT, and dismantling the driving factors behind the large transaction volumes of major public chains. The research is based on previous articles, particularly “The Peculiar Phenomenon of USDC on the Base Chain,” which previously found that about 50% of USDC transfers on the Base Layer 2 network come from DeFi infrastructure (DEX market making, flash loans). We conducted a bottom-up analysis of the transfer composition of USDC and USDT on the Ethereum, Base, and Tron chains.

Issuance and Turnover Rate

The issuance represents the monetary base scale of the stablecoin, while the turnover rate measures the frequency at which the existing funds are transferred on-chain. Combined, these two indicators can determine whether stablecoins are in a state of frequent circulation or merely idle as tools for value storage. This distinction is also at the core of the “CLARITY Act,” which encourages incentives based on real trading activities and does not support merely holding tokens for profit.

From this perspective, USDC has a significant advantage. Data from 2026 shows that the annualized (adjusted supply) turnover rate of USDC is 741 times, ten times that of USDT (74 times), even though USDT’s market value exceeds 100 billion dollars. This means that, relative to the total circulation, the on-chain turnover frequency of USDC is far higher than that of USDT.

The issuance and turnover rate of stablecoins, data source: Talos Network Data Pro

The implementation of the “GENIUS Act” in 2025 brought regulatory benefits to USDC, continuously strengthening its network effects in the compliant markets of the United States, DeFi, and institutional settlement areas. In contrast, the advantages of USDT stem from first-mover advantages, demand from emerging overseas markets, and deep integration with the Tron chain, where there is a strong demand for dollar assets and cross-border remittances.

USDC, issued by Circle, surpassed USDT in adjusted transfer volume in 2024, and the leading margin has continued to expand this year. As of August 2026, USDC’s cumulative settlement transfer volume reached 32 trillion dollars, accounting for 77% of the stablecoin market; USDT transfer volume stood at 8 trillion dollars, making up 19%. Although USDC remains in the lead, the gap between the two is narrowing, with USDC's daily transfer volume falling below 100 billion dollars.

Adjusted transfer volumes of USDC and USDT, data source: Talos Network Data Pro

According to Circle’s Q2 2026 financial report, USDC's on-chain transaction scale grew by 151% year-on-year in Q2, reaching 14.8 trillion dollars, but the growth rate of circulating supply was far lower than that of transactions. Currently, about 95% of Circle's revenue still comes from reserve interest, not transaction fees. Circle’s self-developed Layer 1 public chain Arc is an important layout for creating a source of transaction fee revenue. Therefore, clarifying the underlying driving factors of USDC transaction volume is of great significance.

The following sections will analyze the composition of USDC on Ethereum and Base networks, as well as USDT transactions on Ethereum and Tron chains, as these chains carry most of the stablecoin transfer activity.

Transfer Composition of USDC and USDT

To determine the reasons behind the massive transaction volumes, we continue the USDC research framework from the Base chain, employing a bottom-up analysis method. For each public chain and each stablecoin, we identify key contracts that generate high-frequency mechanized transfers: top protocols of flash loan borrowing markets, large liquidity pools of mainstream DEXs on various chains, and known wallet addresses of exchanges. All transactions are categorized into three types: flash loans, DEX liquidity provision, and centralized exchange fund flows.

The research is based on Talos’ original transfer data, calculating the proportion of each type of transaction relative to the total transfer volume on each public chain. The categorization is at least an estimate, with the remaining part including unidentified behaviors: payments, cross-chain bridge transfers, treasury fund scheduling, and other various settlement activities.

USDC on the Base Chain

The Layer 2 network Base launched by Coinbase has become the main battlefield for USDC transfers in 2026. Transactions are highly concentrated, with over 90% of USDC transfers on the Base chain completed through three contracts. Throughout the year, Aerodrome decentralized exchange liquidity provision contributed the largest trading volume; in the second half of the year, flash loan arbitrage activities relying on the Morpho protocol rapidly emerged. In June, the single-day flash loan transfer volume once exceeded 500 billion dollars. Base's low fees and ample USDC liquidity are suitable for large-scale high-frequency automated strategy operations.

• Flash loans, 23%: Bots complete unsecured borrowing and repayment within a single transaction, leveraging Morpho's unified contract to execute cross-market arbitrage.
• DEX liquidity provision, 69%: Automated strategies continuously adjust the liquidity of two major funding pools in Aerodrome according to price fluctuations, creating massive on-paper trading volume with almost no change in net funds and positions.
• Others, about 8%: Activities outside the marked flash loans and liquidity pool contracts.

Monthly trading volume of USDC on the Base chain, data source: Talos CM ATLAS

USDC on Ethereum

USDC transactions on the Ethereum chain are more concentrated in flash loans, accounting for 65% of the total transfer volume, nearly three times that of the Base chain. Ethereum's USDC liquidity is deep, with a well-established lending ecosystem, suitable for large-scale flash loan arbitrage; however, gas fees are relatively high, making it difficult to support uninterrupted liquidity repositioning as seen on the Base network.

• Flash loans: 65%
• DEX liquidity provision: 0.3%
• Centralized exchange fund flows: 2%
• Other unclassified activities: about 33%

Monthly trading volume of USDC on Ethereum, data source: Talos CM ATLAS

USDT on Ethereum

Flash loans also account for a significant share of USDT trading volume on Ethereum, but the proportion is lower than that of USDC on the same chain. Centralized exchange fund flows take a higher proportion, aligning with USDT’s long-term role in serving exchange settlements and liquidity allocation. The statistical scope includes known funding wallets of centralized exchanges such as Binance and OKX, covering user deposits and withdrawals as well as internal allocations of exchanges' hot and cold wallets.

• Flash loans, 46%
• DEX liquidity provision, 0.3%: primarily for Uniswap V3 USDT/WETH trading pool.
• Centralized exchange fund flows, 9%: covering withdrawal and deposit flows from over 30 centralized exchange wallets.
• Other unclassified activities, about 45%

Monthly trading volume of USDT on Ethereum, data source: Talos CM ATLAS

USDT on Tron

The usage patterns of USDT on the Tron chain are entirely different. Activities like flash loans and DEX market making, which drive large transaction volumes on Base and Ethereum, are virtually negligible here. Among the identified flows, centralized exchange fund flows occupy the highest share, reflecting Tron’s role as a low-cost channel for handling a large volume of exchange deposits and withdrawals. The unclassified flow accounts for as high as 80%, the highest among all statistical linkages, likely including cross-border remittances and various payment scenarios.

• Flash loans, almost negligible: Lending protocols like JustLend did not generate significant associated transaction volume.
• DEX liquidity provision, 0.2%: distributed across four Sunswap trading pools.
• Centralized exchange fund flows, 19%: covering deposits and withdrawals from 33 overseas exchanges such as Binance, OKX, and Bybit.
• Other unclassified activities, about 80%

Monthly trading volume of USDT on Tron, data source: Talos CM ATLAS

The analysis results clearly show the structural differences in the stablecoin ecosystems across different public chains. The trading volumes of USDC on Base and Ethereum are mainly driven by flash loans and liquidity repositioning; Ethereum’s USDT balances both flash loans and exchange fund movements; while Tron’s USDT has almost no large-scale DeFi transactions, yet possesses the largest unmarked trading volume.

Data source: Talos CM ATLAS, Talos Network Data Pro

Conclusion

The scale of on-chain transfers of stablecoins has reached a considerable level and is often compared to global mainstream payment networks. However, at present, the vast majority of trading volume essentially pertains to internal liquidity scheduling within the crypto market: liquidity deployment and rebalancing, arbitrage execution, and cross-platform fund settlements. These applications are real and effective, enhancing the liquidity, trading efficiency, and global accessibility of the crypto asset market.

At the same time, it is essential not to equate the surface-level massive transaction volumes with personal payments or real economic activities. Currently, stablecoins more often serve as the foundational settlement layer of the crypto asset market, while payments, cross-border remittances, and corporate B2B scenarios are still in continuous cultivation. Looking forward, the importance of stablecoin trading quality will be comparable to that of trading volume. The differences between issuance and turnover rates can intuitively reflect how stablecoin funds circulate and allocate within the crypto market.