World Liberty's USD1 stablecoin loses $400 million in market cap in two weeks
USD1 market cap falls by about $401 million
USD1, a stablecoin (a crypto token designed to hold a steady value of one dollar) issued by World Liberty Financial, has lost more than $400 million in market capitalization over two weeks. Market capitalization is the total value of all coins in circulation.
Data from CoinGecko on Monday put USD1's market cap at roughly $4.02 billion, down from $4.43 billion on Oct. 6. That is a drop of about $401 million, or 9.1%. World Liberty Financial's own proof-of-reserves dashboard, which shows the assets held behind the token, listed approximately $4.01 billion in reserves.
The decline came from large redemptions, where holders return tokens in exchange for the underlying money, mainly on the Ethereum and BNB Chain networks.
What the on-chain data shows
- Ethereum recorded $184.60 million in net USD1 redemptions across 63 token burns between Oct. 6 and Oct. 15, according to blockchain research firm Onchain Benchmark.
- BNB Chain recorded $200.43 million across 12 burns in the same period.
- Nearly $200 million of the BNB Chain redemptions came from a single unidentified address, sent in batches of $30 million to $50 million.
- On Ethereum, more than 99% of tokens sent for redemption passed through a wallet labeled as BitGo, USD1's current issuer and custodian.
- Transfers between Ethereum and BNB Chain totaled less than $1 million, suggesting the supply was not simply moved between the two networks.
- On Solana, USD1 supply stayed at about $1.42 billion and did not offset the reductions elsewhere.
The dollar peg held
Despite the redemptions, USD1 kept its dollar peg throughout the period reviewed by Onchain Benchmark, trading between $0.998 and $1.000. The research firm said it found no evidence of a sustained depegging event, meaning the drop in circulating supply was not matched by a lasting loss of the token's dollar value.
USD1's supply decline on Ethereum was steeper than that of several other dollar-backed stablecoins over the same nine days. USD1 supply on the network fell 11.45%, compared with 4.93% for USDe, 2.18% for USDC and 0.76% for circulating USDT.
Who is behind the redemptions remains unknown
Onchain Benchmark said it could not establish who controlled the unidentified BNB Chain address or why the tokens were redeemed. World Liberty Financial has not given a public explanation for the redemptions in the supplied material.
A change of issuer is coming
Onchain Benchmark said the next test will come with a change of issuer. It noted that when World Liberty's trust company opens, it will take on a token whose size depends on the decisions of a few large holders, under a charter whose legal footing is being argued in court. The research firm said whether fresh minting of new tokens on Solana or elsewhere rebuilds the total, or October marks the size USD1 carries into its new issuer, will be answered by supply data in the coming weeks.
That assessment is the research firm's analysis, not a confirmed outcome.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.