Author: Blue Fox Notes
Some have raised the question of whether the emergence of public chains by stablecoin issuers like Circle (USDC) and Tether (USDT) would lead to Ethereum's downfall. Initially, I didn't intend to respond to this, but several friends have privately asked about it. So, let's discuss it briefly.
To conclude, Ethereum will not face downfall because of this. Overall, it will even benefit.
In the future battle of stablecoins, the most important factor will be the distribution channels at the front end, which include Meta, MrBeast, and others (Tom Lee's Bitmine has invested $200 million), as well as Robinhood, Aave, polymarket, lighter, uniswap, exchanges, and wallets... Stablecoin issuers are not the strongest link in the entire chain, and the public chain they build does not inherently have network effects.
Large players like Meta will not only support Circle's chain but will support multiple chains; channels like MrBeast, which are expected to be deeply bound to the Ethereum ecosystem, will prioritize supporting Ethereum; Robinhood is building its L2 network based on Arbitrum (within the Ethereum ecosystem) and may evolve into an independent L2; polymarket also has plans to build Ethereum L2...
The areas that reach users are the true sources of network effect formation. As long as the fees and speed of Ethereum L1/L2 are low enough/fast enough (at the same tier), its advantages in security and decentralization are unique. Currently, Ethereum L1 is advancing towards 10,000 tps, and L2 is progressing towards over a million tps, so future fees/speed won't be an issue.
Issuers building their own chains will not lead to large-scale migration of traffic; instead, they may eventually become Ethereum L2.
Arc is an L1 chain developed by Circle that supports USDC as a native gas fee, sub-second settlement, and enterprise-level privacy/compliance, expected to launch later this year. Even so, USDC is still issued on multiple chains, including Ethereum, Solana, etc., with the Ethereum ecosystem continuing to hold the majority share. There are still many uncertainties regarding how it will develop once launched. Tether’s USDT also operates on multiple chains.
Each stablecoin issuer building L1 chains will create competitive pressure among them, making it difficult to operate on each other's chains, while the Ethereum ecosystem's inclusiveness will continue to make it the most important chain for hosting different stablecoins.
The multichain issuance of stablecoins is the norm, which means that even if ARC launches, it will only be a complement to the existing offerings, not a replacement. It will have its own institutional trading scenarios, but ultimately the market share it can capture does not solely depend on the stablecoin issuer, but rather on the distribution channels and high-frequency application scenarios of stablecoins. For distribution channels, fees/speed/security are all crucial, and currently, Ethereum holds the best balance among these three factors. Distribution channels cannot ignore and are unable to ignore Ethereum.
Currently, Ethereum dominates the stablecoin market share, and its share continues to grow.
In February 2026, the total market value of stablecoins is approximately $3,100-3,200 billion (DefiLlama/TRM Labs data), including:
• Ethereum: 52-60% (~$1,530-1,650), projected to grow 40% in 2025 (from $115B to $153B). It holds the largest share, processing over half of stablecoin activities.
• Tron: 25-30% (~$830-840), with USDT dominating but growth slowing (fees rising to $0.50 per transaction).
• Solana: 4.5% (~$130), with USDC accounting for 77%, benefiting from low fees ($0.01 per transaction).
• Others: BNB Chain grows by 133% (2025), but with a small share; Arbitrum/Base and other L2s account for ~100, with Ethereum ecosystem (L1+L2) exceeding 70%.
Additionally, by currency type, USDT is ~1840 (59%), and USDC is ~750 (24%). USDC is growing rapidly (+6.39% in February 2026), primarily on Ethereum.
In terms of transaction volume, stablecoin transfers exceeded $10.5 trillion in January 2026 (a historical high), with Ethereum handling the majority of institutional/DeFi traffic (forecasted to exceed ~40 trillion for the year), far surpassing PayPal (20 trillion) and nearing Visa (15 trillion). These all carry network effects, do you believe that because of the birth of a stablecoin chain, users will naturally migrate there?
Ethereum still possesses the largest developer ecosystem, the most prosperous DeFi ecosystem, and operates stably without outages, prompting institutions to place their trading scenarios on L1 chains that may potentially fail?
Ethereum's competitors have always been itself, rather than any other chain. As long as its fees/speed are on par with any other L1 chain, its advantages in security and decentralization will be unmatched.
The future of Ethereum, aside from stablecoins, also includes asset tokenization, DeFi, and AI agent economies; these are all major trends. The L1 chains built by stablecoin issuers are not enough to bring about Ethereum's downfall.
By the way, how is the biggest stablecoin issuer Tether supporting the Plasma chain now?
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