Data & Insights: Stable Supply

Ripple in the Sky

• Sky Protocol's USDS stablecoin reached a new all-time high supply of ~6.9 billion last Friday, up 48% year-over-year (YoY).
  • USDS supply grew by over $290 million in the last month alone, with its growth trajectory aligned with Sky Protocol's broader institutional push
  • For example, Keel, its onchain capital allocator, launched a $500 million campaign in December 2025 to attract RWA issuers to Solana, while Sky entered as a Morpho Vault Curator in January with dedicated USDS lending markets.
• At the same time, Ripple's RLUSD also reached a record 1.5 billion in supply on February 20, up from a measly 83 million just a year ago
  • As opposed to other stablecoins, RLUSD's growth is rooted in Ripple's regulatory positioning.
  • Issued under a New York DFS Limited Purpose Trust Company Charter, RLUSD received OCC conditional approval for a national trust bank charter in December 2025, making it one of five crypto firms approved in the same batch alongside Circle, Paxos, BitGo, and Fidelity Digital Assets.
  • Dubai's DFSA also recognized RLUSD alongside USDC and EURC under its new crypto framework.
  • The Binance listing a few weeks earlier also created the liquidity infrastructure for scale, as it gave market makers and high-frequency desks further incentive to build RLUSD into their routing.
• Despite USDT and USDC still commanding a combined ~88% of the total stablecoin market, they have not been growing as fast as they previously were in recent months.
  • With this in mind, and the growth in both USDS and RLUSD, the direction of the stablecoin market may be hinting at the next layer of growth belonging to stablecoins that offer either yield or regulatory differentiation.

Signs of Trench Life..

• The percentage of tokens graduating on Pump.fun hit 1.05% last Tuesday, the highest daily figure since July 2025.
  • The graduation rate represents the share of newly launched tokens that migrate from Pump.fun's bonding curve to DEX.
  • There were three days in February so far where this figure has crossed the 1.0% threshold, the first time it has done so after a seven-month drought.
    February’s recovery may be a signal of renewed risk appetite and the innings of the revival of the “trenches”.
• A part of this revival may be Pump.fun's new Cashback Coins feature, an attempt at trying to improve incentive alignment.
  • This new mechanism forces creators to choose at launch between keeping creator fees or redirecting all fees to traders as cashback, which is an irreversible, permanent decision.
  • Beyond the new feature, pump.fun had also acquired trading terminal Vyper in early February to add to its cross-chain infrastructure.

ETH Steak Dinner

• The Ethereum validator entry queue has continued its upwards trajectory this week, surging to 4 million ETH with wait times now exceeding 60 days, the highest demand for staking entry since 2023.
  • By mid-January 2026, the entry queue had already risen more than fivefold in a single month to 2.6 million ETH, while the exit queue simultaneously collapsed to near zero from its September 2025 peak of 2.67 million ETH. 
• A portion of that demand can be traced to institutional accumulation. BitMine, which now holds approximately 4.37 million ETH or roughly 3.6% of circulating supply, has continued aggressive buying, with the firm's stated goal of reaching a 5% share of the total supply. SharpLink, the second-largest corporate ETH treasury at ~867K ETH, stakes nearly 100% of its holdings.
• On the ETF front, BlackRock recently began seeding its iShares Staked Ethereum Trust (ETHB), which is still pending approval, but its filing adds a forward-looking layer to the picture. The fund will target staking 70-95% of assets at an estimated ~3% annual yield. 
  • If approved and launched in H1 2026 as widely anticipated, it would funnel additional institutional ETH directly into the validator queue.
• The near-zero exit queue alongside a 4M+ ETH entry backlog suggests little desire among existing validators to leave, while new capital competes for entry. The continued inflow has pushed the total percentage of ETH staked to 30%.

Base Goes Solo

• Last week, Base announced that it will be leaving Optimism’s OP stack and migrating to its own codebase. The change ends its three-year dependency and, more consequentially for token holders, reshapes who captures its fee revenue.
  • Base fees have been split between Coinbase and the Optimism Collective, with Coinbase taking the larger share and Optimism receiving a smaller but meaningful cut, often in the tens or hundreds of thousands of dollars. That arrangement is now set to change. 
  • As Base transitions to its own unified codebase called base/base its consolidating the sequencer, client releases, and core infrastructure previously maintained across Optimism, Flashbots, and Paradigm. The resulting revenue-sharing dynamic shifts decisively in Coinbase's favor
• The Optimism Collective had recently passed a governance proposal directing 50% of Superchain sequencer revenue toward monthly OP token buybacks, a mechanism designed to create direct value accrual for holders. 
  • Base currently generates over 90% of Superchain's revenue, making that proposal meaningful. With Base moving toward an "OP Enterprise" customer model rather than a core Superchain participant, the revenue base underpinning that buyback program shrinks considerably.
  • OP fell nearly 36% over the past week on the back of the announcement, one of the sharper single-catalyst drawdowns in the L2 space in recent memory. The Layer 2 Index, GML2, has fallen 75% over the last 12 months.

Market Taking Stock

• The total crypto market capitalization has slipped to $2.37 trillion, a 12-month low and roughly 52% below the cycle peak of $4.38 trillion set in October 2025. 
• The drawdown has not been evenly distributed, however, as Bitcoin, while down meaningfully from its highs, has held up on a relative basis as capital has rotated into it over smaller assets. 
  • The broader altcoin market has absorbed the steeper losses, with many mid and small-cap tokens well into double-digit percentage declines year-to-date. Per Pantera Capital, the non-bitcoin token market has been in a grinding contraction since late 2024, with the median token down roughly 79% from peak.
• Sentiment indicators have tracked the price action closely. We talked about the Crypto Fear and Greed Index last week, which reached a reading of 5. Retail search interest has followed suit, with Google Trends data showing global searches for "crypto" near one-year lows.
• Bitcoin is on track for one of its worst Q1 performances since 2018. Whether the current level represents a floor or a pause will likely depend on how quickly the macro picture shifts and whether institutional demand through ETF channels continues to provide a baseline bid.