Vol Commentary: PYUSD On Solana

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!