Cumberland is commenting on the recent volatility and potential opportunities to take advantage of it.
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About two months ago, PYUSD launched on Solana, its first new chain since it initially launched on Ethereum a year ago. PYUSD is issued by Paxos, which is under the jurisdiction of NYDFS, so they are required to get approval for each new chain they launch on. The Solana rollout has been extremely interesting, both from an opportunistic standpoint, and from what it tells us about the Solana DeFi ecosystem. PYUSD on Ethereum took a year to get to 350m AUC, but the supply on Solana is already at 550m, taking PYUSD past 900m; PYUSD has increased in supply by 50% in August alone.
The primary driver for the increase is yield. PYUSD currently pays 15% on Kamino (which has 400m supplied) and 18% on Drift (which has 60m). The interesting piece to note here is that there was a yield campaign in Ethereum as well, predominantly on Curve; the Solana DeFi community has just been much quicker to react. The Solana ecosystem is extremely smooth; Orcaswap PYUSD-USDC is the primary liquidity pool (it traded 100m of volume yesterday), but most users don’t engage directly with Uniswap, but rather just execute through Jupiter, the aggregator. The fact that incentives yielded much better results in the Solana ecosystem over Ethereum is an extremely interesting data point.
Last month, PYUSD on Solana could only be accessed by minting directly with Paxos, or by purchasing from an OTC desk like Cumberland. This week, deposits and withdrawals also went live on Bybit, which has further fueled onchain volumes; PYUSD-USDC was the top trading pair on Jupiter for the first time yesterday.
If you’re interested to trade PYUSD (or to talk about it, or even just to discuss stablecoins in general!), please reach out to a Cumberland RM!
Disclaimer
The information (“Information”) provided by Cumberland DRW LLC and its affiliated or related companies (collectively, “Cumberland”), either in this document or otherwise, is for informational purposes only and is provided without charge. Cumberland is a principal trading firm; it is not and does not act as a fiduciary or adviser, or in any similar capacity, in providing the Information, and the Information may not be relied upon as investment, financial, legal, tax, regulatory, or any other type of advice. The Information has not been prepared or tailored to address, and may not be suitable or appropriate for the particular financial needs, circumstances, or requirements of any person, and it should not be the basis for making any investment or transaction decision. THE INFORMATION IS NOT A RECOMMENDATION TO ENGAGE IN ANY TRANSACTION.
If any person elects to enter into transactions with Cumberland, whether as a result of the Information or otherwise, Cumberland will enter into such transactions as principal only and will act solely in its own best interests, which may be adverse to the interests of such person. Before entering into any such transaction, you should conduct your own research and obtain your own advice as to whether the transaction is appropriate for your specific circumstances. In addition, any person wishing to enter into transactions with Cumberland must satisfy Cumberland’s eligibility requirements. Cumberland may be subject to certain conflicts of interest in connection with the provision of the Information. For example, Cumberland may, but does not necessarily, hold or control positions in the cryptoasset(s) discussed in the Information, and transactions entered into by Cumberland could affect the relevant markets in ways that are adverse to a counterparty of Cumberland. Cumberland may engage in transactions in a manner inconsistent with the views expressed in the Information.
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The Monetary Authority of Singapore (“MAS”) requires Cumberland SG Pte. Ltd. to provide this risk warning to you. Before you: (a) pay or transfer your Digital Payment Token (‘DPT’) service provider any money or DPT; (b) enter into an agreement with a third party to buy or sell DPTs upon inducement by your DPT service provider; (c) enter into an agreement with a third party under an arrangement by your DPT service provider for the transmission of DPTs; (d) pay a third party any money or DPT under an arrangement by your DPT service provider for the transmission of DPTs; or (e) transfer any digital payment token instrument to your DPT service provider, you should be aware of the following:
1. Cumberland SG Pte. Ltd. is exempted by MAS from holding a license to provide DPT services while its license application is pending with MAS. Please note that you may not be able to recover all the money or DPTs you paid to a DPT service provider, or any other third party referred to above, if the DPT service provider’s or the third party’s business fails.
2. You should not transact in a DPT if you are not familiar with the DPT. This includes how the DPT is created, and how the DPT you intend to transact is transferred or held by your DPT service provider.
3. You should be aware that the value of DPTs may fluctuate greatly. You should buy DPTs only if you are prepared to accept the risk of losing all of the money you put into such tokens.
4. You should be aware that your DPT service provider, as part of its license to provide DPT services, may offer services related to DPTs which are promoted as having a stable value, commonly known as “stablecoins.”
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