USD1 Stablecoin Loses Over $400 Million in Market Cap as Large Redemptions Hit Ethereum and BNB Chain

World Liberty Financial’s USD1 stablecoin has shed more than $400 million in market value over the past two weeks. Blockto data shows its market cap at about $4.01 billion on Monday, down from $4.43 billion on October 6, a drop of roughly 9.1%. The project’s proof of reserves dashboard separately lists about $4.01 billion in reserves. Despite the outflow, USD1 held its dollar peg, trading between $0.998 and $1.000, and researchers found no sign of a lasting depeg.

Ethereum and BNB Chain Redemptions

According to Benchmark, Ethereum saw $184.60 million in net redemptions across 63 token burns between October 6 and October 15, while BNB Chain recorded $200.43 million across 12 burns. On Ethereum, more than 99% of tokens sent for redemption passed through a wallet labeled BitGo, the current issuer and custodian. Nearly $200 million of the BNB Chain redemptions came from a single unidentified address, moving in batches of $30 million to $50 million. The researchers could not tell who controlled the funds or why they were redeemed.

USD1 Supply Compared With Other Stablecoins

On Ethereum, USD1 supply fell 11.45%, a steeper drop than USDe at 4.93%, USDC at 2.18% and circulating USDT at 0.76%. Transfers between Ethereum and BNB Chain totaled less than $1 million, so the missing supply was not simply moved between networks. Nor was it offset by new issuance on Solana, where supply stayed flat at about $1.42 billion.

World Liberty Trust Company and the Issuer Change

Onchain Benchmark said the next test comes with the change of issuer. When World Liberty’s trust company opens, it will take on a token whose size depends on a few large holders, under a charter whose legal footing is being argued in court. The firm said coming weeks of supply data will show whether new mints rebuild the total or whether October sets the size USD1 carries into its new issuer.