Blockchain Investor Analysis

USD Coin

USDC
Current Price $1.00 (-0.02%)
Coinbase and Circle joined together to create USD Coin, a dollar-backed stablecoin that enables anyone in the world to use a digitized dollar on the Ethereum blockchain.

Our Rating:

Market

Problem that it solves

USD Coin take the volatility out of digital currencies through its one-to-one backing with US dollars in a regulated bank account. USDC operates as an ERC-20 token on the Ethereum blockchain enabling anyone across the globe to use dollars in digital form.

Customers

The customer base for stablecoins vary greatly, but USDC has solid footing already with the backing of Coinbase. Coinbase has millions of users across the globe, which means that USDC has a built-in customer base. Having said that, the most frequent users of stablecoins are digital asset traders.

Value creation

USDC is fiat-collateralized, meaning that each USD Coin is pegged to one US dollar. It makes the conversion easy and implies a level of security to the inherent value of USDC. Lastly, users can send money instantly, globally, securely, and at low cost with stablecoins.

Market structure

The current market for USDC exists heavily in the trading space. USDC is one of the marquee stablecoins used to hold funds on exchanges. As mass adoption continues, sectors of the market will expand with stablecoins leading the way in forms of transaction and store of value.

Market size

Stablecoins impressed the blockchain community from the very beginning. Since the launch of Tether (USDT), numerous stablecoin projects have emerged that were met with ample demand.

Regulatory risks

USD Coin is arguably the most regulated digital currency in the world as it is backed by dollars held in a regulated US financial institutions and its holdings are audited regularly.

Average Market Score

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Competitive Advantage

Technology/blockchain platform

The USD Coin represents US dollars on the Ethereum blockchain. Therefore, it can be used on any decentralized app that operates on the Ethereum blockchain.

Lead time advantage

USDC was launched in 2018 as the stable boom began. Although it started off slow, USDC has picked up tremendous momentum since inception and is now the second-largest stablecoin by market capitalization.

Contacts and networks

As two of the most promiment forces in the blockchain industry, Circle and Coinbase have a combined network envied by all in the community. Tech giants like Dell and Google are just a few on the long list of 'partners and affiliates' for Circle and Coinbase.

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Management Team

Entrepreneurial Team

USD Coin was developed by Centre Consortium, a join venture between Circle and Coinbase. Jeremy Allaire and Sean Neville founded Circle in 2013, while Brian Armstrong and Fred Ehrsam founded Coinbase in 2012. Both Circle and Coinbase have proven beyond doubt that they're capable of pushing an idea into reality.

Industry/technical experience

Centre Consortium consists of former Circle/Coinbase employees along with new additions. Assuming executive leadership is heavily involved, Centre should clear the industry experience expectation by a mile.

Integrity

USD Coin looks to create transparency and trust within the stablecoin space. Both Circle and Coinbase have shown that they can successfully operate a digital currency venture.

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Token Mechanics

Token required

As USD Coin is a stable digital currency, the token is absolutely required in this blockchain project.

Value added

While USD Coin is not the first stablecoin to hit the market, it is arguably the most transparent and one of the most trust in the industry. Moreover, the strong demand for stablecoin in the digital asset trading community proves there is substantial value in stablecoins.

Decentralized

USD coin is centralized. In fact, all fiat-collateralized stablecoins are centralized by design, so there is no escaping this particular feature.

Token supply

USD Coin has an unlimited token supply as users can convert dollars into USD Coins and redeem them again at will.

Public exchange

USDC trades on nearly every major exchange including Binance, Poloniex, and Coinbase, and many more.

MVP

Circle and Coinbase have issued over $1.67 billion worth of USDC since inception. The coin has been operation since late 2018.

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User Adoption

Technical difficulty

The value for stablecoins stems from the size of the network that utilizes the coin. Ensuring a user-friendly stablecoin is essential for business, so Circle and Coinbase have taken additional measures to ensure a non-technical person could use USDC.

Halo Effect

Coinbase and Circle boost the 'halo effect' for USD Coin. The majority of listed altcoins have limited funding and no name recognition, but USDC enjoys the benefits of millions of dollars in funds and brand recognition through its parent companies.

Buzz

The buzz surrounding stablecoins has been prevelant and consistent since their inception. USD Coin is no different.

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Overall Score

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Blockchain Investor Analysis

USD Coin has put itself in an excellent position to win the battle of the stablecoins. Both Coinbase and Circle understand that investors are timid towards Tether due to the mishandling of funds from its parent company Bitfinex. This leaves a gap for USDC to fill as the go-to trustworthy stablecoin anyone can use.

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