Stablecoin growth stalls after October shock as Base leads transaction volume: ARK Invest

Decentralized finance continued to expand its role as crypto’s settlement and trading layer in the fourth quarter of 2025, even as activity rotated across networks and products after an October volatility shock, according to a new report from ARK Invest.

Stablecoin supply ended the year above $300 billion, though growth has largely flatlined since an October “flash crash” that shook yield strategies and triggered a sharp drawdown in Ethena’s USDe, ARK said. USDe fell about 58% from an October peak of $14.3 billion in supply to roughly $6 billion by quarter’s end, which ARK tied to an Oct. 10 liquidation event and a temporary depegging on Binance.

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DeFi’s stablecoin demand

While overall supply growth cooled, the map of stablecoin usage kept moving. ARK said Coinbase’s Base finished the quarter with about $3 trillion in stablecoin transaction volume — a 121% quarter-over-quarter increase — eclipsing Ethereum and Tron on that measure. However, BNB Chain, Tron, and Polygon led the pack for active addresses by chain.

The firm added that Ethereum and its Layer 2 ecosystem strengthened as the primary hub for stablecoin transactions more broadly, accounting for 58% of total volume, up 1,300 basis points from the third quarter. 

USDC also widened its lead as a transactional stablecoin, ARK said, accounting for more than 60% of adjusted stablecoin transaction volume despite representing about 25% of total supply. USDC’s volume-to-supply ratio rose to roughly $88, compared with about $22 for PayPal’s PYUSD, which posted the largest quarterly jump in velocity, growing 2.5x, according to the report.

RWAs

Tokenized real-world assets, a category spanning onchain representations of traditional assets, continued to gain ground. ARK estimated the total RWA value reached about $19 billion by the end of 2025, up 14.8% quarter-over-quarter, with commodities leading the quarter’s expansion. Tokenized commodities rose about 64% to roughly $3.5 billion, driven primarily by tokenized gold products, including Tether’s XAUT and Paxos’ PAXG. Private credit also advanced, with ARK citing Maple Finance’s quarterly growth from about $1.5 billion to $2 billion as a key contributor.

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The network distribution of RWAs shifted as well. ARK said Ethereum and its Layer 2s accounted for about 70% of RWA value on public blockchains, while BNB Chain’s share rose to 10.5% from 3.7% quarter-over-quarter — a move the report linked to Circle’s USYC money-market product, which ARK said grew about 149% on BNB Chain during the quarter. Solana’s RWA value increased 27% to $880 million, with ARK attributing portions of that to BlackRock’s BUIDL and Ondo’s USDY.

DEX trading skyrockets

In trading, decentralized exchanges again cleared the trillion-dollar mark. ARK pegged spot DEX volume at roughly $1.1 trillion for the quarter, above $1 trillion for the fifth consecutive quarter, with stablecoin flows accounting for about 55% of activity through stablecoin-to-native and stablecoin-to-stablecoin trades.

Tokenized asset trading was the fastest-growing category on DEX venues, up roughly 202% quarter-over-quarter, even as memecoin and liquid staking token swaps each fell about 37%, the report said.

October crash cools DeFi revenue

The report also flagged a cooling in network and application revenue metrics as risk appetite faded after October’s liquidation event.

ARK said network “real economic value” declined 27% quarter-over-quarter to about $473 million, while total application revenue ended the quarter at roughly $656 million after a broader 2025 decline. Ethereum generated about $111 million in the fourth quarter, exceeding Solana’s roughly $90 million on a quarterly basis for the first time since Q3 2024, ARK said.

On the lending side, ARK said leverage and deposits pulled back amid risk-off conditions. Total deposits across lending protocols fell about 21% quarter-over-quarter to roughly $92 billion, while active loans across protocols still ended the year higher, rising about 48% in 2025 to roughly $38 billion by the fourth quarter. Aave remains the sector leader here, according to The Block's data.

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ARK’s dataset also pointed to payments maturing at the edge of the ecosystem. Crypto card spending exceeded $100 million in December and rose to about $262 million for the quarter, with Visa processing about 76% of volume and Mastercard about 24%, the report said.