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World Liberty Financial’s USD1 stablecoin dropped roughly $401 million in market cap over nine days. Fast. And without much noise.
Why It Matters
The move is notable because it highlights how quickly stablecoin supply can change when activity is concentrated in a single wallet or a small set of wallets, which can complicate perceptions of circulation, liquidity, and reserve transparency. For the market, the key issue is less the headline decline itself than what it suggests about user behavior and whether large, opaque flows could affect confidence in the token’s stability and on-chain footprint.
The token sat at $4.43 billion on Oct. 6. By Monday, CoinGecko data put it at about $4.02 billion — a fall of approximately 9.1%. World Liberty Financial’s own proof-of-reserves dashboard separately showed reserves of around $4.01 billion, a figure that’s close to the CoinGecko number but not identical. Nobody has explained the gap, small as it is.
The culprit, pretty much, was a wave of redemptions on two networks: Ethereum and BNB Chain. Blockchain research firm Onchain Benchmark reviewed the on-chain data and found hundreds of millions of dollars in USD1 burns across both chains during that window.
BNB Chain’s Mystery Wallet
BNB Chain carried the heavier load. Onchain Benchmark tracked $200.43 million in redemptions across just 12 burns between Oct. 6 and Oct. 15. Nearly all of it — close to $200 million — came from a single, unidentified address. Onchain Benchmark couldn’t figure out who controlled the funds or why they pulled out. No details there.
The address worked in batches. Chunks of $30 million to $50 million went out at a time, methodical and quiet. Whether that’s one institution, a fund unwinding a position, or something else entirely isn’t clear. The data doesn’t say.
Ethereum told a different story — more burns, smaller individual sizes. Net USD1 redemptions on Ethereum totaled $184.60 million across 63 token burns in the same nine-day stretch. More than 99% of those tokens passed through a wallet labeled BitGo, which the data identifies as USD1’s current issuer and custodian. So on Ethereum, at least, the redemption path is traceable. On BNB Chain, it’s murky.
Cross-chain movement between the two networks? Basically nothing. Transfers between Ethereum and BNB Chain totaled less than $1 million during the period — a tiny figure beside the combined $385 million in redemptions recorded across both chains. There was no large offsetting flow moving assets from one network to the other.
Peg Held. Supply Didn’t.
Here’s the thing that probably matters most to holders: USD1 didn’t break its dollar peg. Onchain Benchmark found the token traded between $0.998 and $1.000 throughout the reviewed period. No sustained depegging. The price stayed close to $1 even as supply shrank.
That’s a meaningful distinction. A stablecoin losing market cap because people are redeeming it is not the same as a stablecoin losing its peg. One is normal behavior. The other is a crisis. USD1, at least by the data available, went through the former.
Still, the supply contraction on Ethereum was steeper than what several other dollar-denominated stablecoins saw over the same stretch. USD1’s supply on Ethereum fell 11.45% between Oct. 6 and Oct. 15. USDe dropped 4.93%. USDC fell 2.18%. USDT slipped just 0.76%. Those figures are Ethereum-specific — not overall market cap for each token — but the comparison is stark. USD1 moved faster and further than its peers on that network.
Meanwhile, USD1’s supply on Solana held roughly steady at about $1.42 billion across the nine days Onchain Benchmark examined. Solana didn’t pick up the slack. No surge of new minting there offset what was burning off on Ethereum and BNB Chain.
Issuer Change Adds Uncertainty
Onchain Benchmark said USD1’s next real test comes with a change of issuer. World Liberty’s trust company hasn’t opened yet, and the legal standing of its charter is still being argued in court. That’s not a small detail — it’s probably the central question hanging over the token’s near-term trajectory.
The concentration of redemptions makes it harder to read the signal. When one unidentified address accounts for nearly $200 million in BNB Chain burns, it’s tough to know whether that reflects broad holder sentiment or one big player making a specific decision for reasons nobody outside can see.
Onchain Benchmark was careful not to overinterpret. The firm said the available data didn’t establish whether new issuance on Solana or elsewhere would rebuild USD1’s total supply. It also raised the possibility that October’s supply level could simply carry over into the token’s new issuer period — meaning the contraction might not reverse quickly, or at all.
BitGo remains the current custodian. The next weeks of mint data will say a lot.
Hub: BNB price, news, and analysis
Frequently Asked Questions
How much did USD1’s market cap fall between Oct. 6 and Oct. 15?
USD1’s market cap fell roughly $401 million, dropping from $4.43 billion on Oct. 6 to about $4.02 billion by Monday, a decline of approximately 9.1%.
Did USD1 lose its dollar peg during the redemption wave?
No. Onchain Benchmark found USD1 traded between $0.998 and $1.000 throughout the period and found no evidence of a sustained depegging event.
Who was behind the large BNB Chain redemptions?
Nearly $200 million in BNB Chain burns came from one unidentified address that sent funds in batches of $30 million to $50 million; Onchain Benchmark could not determine who controlled the wallet or why the redemptions occurred.
