Anchorage Digital, a leading institutional-grade crypto platform, has launched a reward program for institutional investors holding PYUSD on its platform or in its self-custody wallet Porto, according to an Aug. 22 statement.

The company announced that institutions using its services or Porto can now earn “competitive rewards” on their PYUSD holdings. Unlike other reward programs that involve rehypothecation, staking, or lending, Anchorage Digital’s program allows participants to earn rewards while keeping their assets fully accessible and segregated in their accounts for quick deployment.

The announcement hinted that while the program currently supports PYUSD, other stablecoins might be included in the future.

Anchorage Digital CEO Nathan McCauley stated that the program aligns with crypto innovators’ desire to generate returns on their treasury assets without compromising security or accessibility. He added:

“Anchorage Digital looks forward to working with crypto innovators — including protocols, foundations, VCs, and startups — to unlock the next phase of growth by supporting access to our stablecoin rewards program.”

PayPal’s General Manager of Blockchain, Crypto, and Digital Currency also commented that the initiative will expand PYUSD’s utility and benefit institutional users.

$1 billion milestone

The partnership comes as PayPal’s PYUSD is approaching a $1 billion market cap, driven by the strong adoption of the stablecoin on the Solana network.

PYUSD’s supply surged by around $400 million in the past month, representing a 60% increase. This growth has positioned PYUSD as the fastest-rising stablecoin, reaching $960 million as of press time, according to data from CryptoSlate.

DeFillama data further showed that most PYUSD is on the Solana blockchain, with $590 million on Solana compared to about $366 million on Ethereum.

Market observers have linked PYUSD’s success on Solana to the high yields offered by Solana-based DeFi protocols such as Drift. This platform provides users with substantial rewards, offering nearly 20% annual returns for those who deposit the stablecoin.

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PayPal’s PYUSD stablecoin supply has grown by 90% after it expanded to the Solana blockchain in May, with its market capitalization surpassing the $500 million mark as of July 8.

According to DeFillama data, PYUSD’s total supply on Solana and Ethereum has reached approximately $520 million on July 8.

Solana is driving PYUSD growth

A breakdown of its supply across the two chains shows that $399 million, representing 77% of the total supply, is on Ethereum, while $118.65 million, equivalent to 23% of its supply, is on Solana.

However, further analysis of the data shows that its adoption on the Solana network is rising, with the supply on the network rising roughly 58% during the past week. In contrast, PYUSD supply on Ethereum dropped 6% during the same period.

Unsurprisingly, the increased supply and improved adoption also boosted its trading volume. Data from Visa and blockchain analytics platform Allium Labs shows PYUSD’s weekly transaction volume exceeded $500 million at the end of last month, up from previous averages of around $150 million.

This rapid growth prompted Solana developer Paul Fidika to describe PYUSD as a “sleeper hit on Solana” because it bolsters the blockchain network “as a legit financial alternative.” He added:

“[PYUSD] makes Coinbase and Circle irrelevant; their only utility is a fee-charge bridge between bank-accounts <-> crypto addresses.”

Solana-based DeFi protocols embrace PYUSD

Market observers noted that PYUSD’s integration with leading Solana-based DeFi protocols is helping it build an ecosystem on the blockchain network.

Solana has one of the largest thriving DeFi ecosystems, with the total value of assets locked on it ranking among the top five in the industry, according to DeFillama data.

The stablecoin is available on major Solana-based DEXs Jupiter and Orca, which are reportedly introducing new products designed to encourage its use. Furthermore, the stablecoin has also been integrated into Solana’s largest lending and liquidity protocol, Kamino Finance.

Tom Wan, an analyst at 21shares, pointed out that the DeFi platform offers a 23% annual percentage yield (APY) on PYUSD, which has proven attractive to investors seeking yield opportunities.

He stated:

“A lot of the success can be attributed to Kamino Finance. Over 38% of the supply has been lent on Kamino with a 23% APY. This is also a huge step for the adoption of token extension in DeFi.”

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PayPal said it has expanded its US dollar stablecoin PYUSD to the Solana blockchain network to empower its users with fast, secure, and cheaper stablecoin transactions, according to a May 29 statement.

Solana corroborated this development in a separate statement, adding that PYUSD holders would enjoy a “high throughput and speed of settlement” and a new token extension feature that expands functionality for compliance.

Jose Fernandez da Ponte, PayPal’s Senior Vice President, said:

“Making PYUSD available on the Solana blockchain furthers our goal of enabling a digital currency with a stable value designed for commerce and payments.”

Experts suggested that the move would aid PYUSD adoption among retail crypto users. Phantom, the most popular Solana-focused crypto wallet service provider, said its users can now buy and transfer PYUSD from their wallets without transaction fees.

Meanwhile, this expansion comes nearly a year after PYUSD’s debut on Ethereum in August 2023. Since then, the stablecoin has recorded modest growth and attracted regulatory attention from the US Securities and Exchange Commission (SEC).

According to CryptoSlate’s data, PYUSD’s market capitalization stood at approximately $400 million as of press time.

Stablecoin powerhouse

Since the beginning of the year, the Solana blockchain has quietly emerged as a dominant stablecoin network thanks to its high transaction speeds and extremely low costs.

PayPal identified this as one of the reasons for its expansion into the blockchain. The company noted that Solana has become the leading platform for tokenized transactions and is ideal for PYUSD as it gains traction in payment use cases among its over 30 million merchants.

Data from blockchain analytics platforms Artemis and Visa confirms that Solana was the most used blockchain for stablecoin transfers in the past month. The stablecoin supply on this layer-1 network has surged to over $4 billion, with Circle’s USD Coin (USDC) making up more than 70% of these assets.

Market observers attribute this growth to the significant influx of capital into the network, driven by the memecoin frenzy and the expanding DeFi activity within the Solana ecosystem.

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PayPal, the digital payments giant, says it is ready to enter the Non-Fungible Token market, filing a new patent application for buying and trading NFTs. 

PayPal: patent for buying and trading NFTs and its blockchain ecosystem

PayPal has published a new patent application for buying and trading NFTs as the basis for the creation of its blockchain ecosystem. 

In practice, the digital payments giant says it is ready to enter the NFT market, however, by creating a system where users can buy and sell NFT through a third-party service provider. 

Such a system will be able to handle not only NFTs, but also splits, DAOs and royalties, through a third-party provider.

Not only that, while the text repeatedly refers to the Ethereum blockchain, there is a part where NFT trading outside the blockchain is also considered. 

PayPal and NFT trading even off-chain

In the description of its patent application, PayPal envisions that NFT trading can be customized and done off-chain as well. 

In this regard, here is what it says:

“Off-chain transactions could be handled within an “omnibus wallet” associated with the service provider and containing both the buyer and seller’s wallets:

Therefore, no transfer is registered on the blockchain and there is no need to broadcast the transaction to the blockchain network or pay the gas fees associated with such an on-chain transaction.”

This means that PayPal users who want to do NFT buying and trading do not have to have their own digital wallet. One solution of his would be a third-party broker that could provide a range of storage and checkout services.

Not only that, in its NFT patent application, the payments giant specifies what can be tokenized as follows: 

“The NFT in this example may represent any unique piece of digital data that can be tracked using a decentralized blockchain ledger. […] Examples of such assets include […] digital images and videos, music, collectibles, and other digital art along with deeds to personal property, event tickets, legal documents and other real-world items.”

PYUSD stablecoin expansion

As PayPal is set to enter the NFT market last August, the digital payments giant launched its stablecoin PayPaul USD (PYUSD), in partnership with Paxos. 

PYUSD is an ERC-20 token on the Ethereum network and is fully collateralized in USD USD. 

Since then, PYUSD has been welcomed into the crypto market. And indeed, back in early September, Coinbase announced the integration of PayPal’s stablecoin on its platform. 

Then a few days ago, Bitget’s crypto-exchange also announced the listing of PYUSD. 

But as it turns out, it is Crypto.com that is taking PayPal by storm, forging a new strategic partnership with the payments giant and Paxos to emerge as the leading trading platform for PYUSD stablecoin. 

In this regard, Crypto.com announced that it currently holds the largest global liquidity for PYUSD trading pairs, making it available to both its retail and institutional users.

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