World Liberty Financial’s USD1 saw its market cap decrease more than $400 million over two weeks of large redemptions on Ethereum and BNB Chain, according to analysis by Onchain Benchmark.
USD1’s market cap fell from $4.43 billion on October 6 to $4.02 billion by October 19, a 9.1% decline. The stablecoin maintained its dollar peg throughout the period, trading between $0.998 and $1.000 with no evidence of sustained depegging, according to CoinGecko market data.
Onchain Benchmark tracked $184.60 million in net USD1 redemptions on Ethereum between October 6 and 15, distributed across 63 token burns. More than 99% of those tokens sent for redemption passed through a wallet labeled BitGo, USD1’s current issuer and custodian, the research firm found.
BNB Chain redemptions totaled $200.43 million across 12 burns during the same period. Researchers identified that nearly $200 million of those redemptions originated from a single unidentified address, transferred in batches of $30 million to $50 million. Onchain Benchmark could not establish who controlled the funds or why they were redeemed.
Transfers between Ethereum and BNB Chain totaled less than $1 million, suggesting the missing supply was not shifted between networks. USD1’s supply on Solana remained unchanged at $1.42 billion across a nine-day review period.
USD1’s supply contraction on Ethereum was steeper than other major US dollar-denominated stablecoins during the same period. USDe supply declined 4.93%, USDC declined 2.18%, and circulating USDT declined 0.76% on Ethereum over the same timeframe.
BitGo, which serves as USD1’s issuer and custodian, reported $4.01 billion in reserves on its proof-of-reserves dashboard.
Onchain Benchmark noted that the redemptions occur as World Liberty Financial prepares to transition USD1 to a new issuer. “The next tests come with the change of issuer. 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 firm said. “Whether fresh mints on Solana, or anywhere else, rebuild the total, or October marks the size USD1 carries into its new issuer, is the question the next weeks of supply data will answer.”
