March Cross-Chain Bridge Recap

Cross-chain bridges tend to reflect the general trends in activity across the blockchain landscape. This remained true in March 2023 amidst a shift in the distribution of stablecoins between the major Layer 1 (L1) ecosystems. As we discussed in our March L1 Landscape Recap, a broad move away from USDC and BUSD toward USDT among market participants in recent months has fueled an influx of liquidity from Ethereum and BNB Chain to Tron, which is now the second-largest stablecoin ecosystem by market cap. 

The supply of stablecoins on-chain fell by about $3.5 billion in March overall, with increasing consolidation of liquidity to the largest L1 ecosystems. This trend is reflected in the decline of total value locked (TVL) in multi-chain bridges over the same period as users moved their funds back to Ethereum.