PayPal’s PYUSD Expands to Solana with LayerZero Integration

PayPal’s USD-pegged stablecoin, PayPal USD (PYUSD), has taken a significant step in cross-chain functionality by integrating with LayerZero’s bridging protocol. Announced on November 12, the integration enables PYUSD holders to transfer their stablecoins between Ethereum and Solana networks using LayerZero’s Omnichain Fungible Token (OFT) Standard. This integration offers users more control over their assets, allowing for seamless cross-chain transfers without depending on centralized services like PayPal or Venmo.

According to LayerZero, the integration is part of a broader trend towards interoperability in the blockchain ecosystem, allowing users to self-custody and move assets flexibly across networks.

Shifts in PYUSD’s Market Capitalization and Network Distribution

PYUSD’s market dynamics have fluctuated significantly in recent months. In August, the stablecoin reached a peak market cap of $1 billion, with Solana dominating distribution with $660 million of PYUSD circulating on its network, while $340 million resided on Ethereum. However, current data from DefiLlama shows PYUSD’s market cap has since dropped nearly 50%, now standing at $513 million. The distribution balance has shifted as well, with $384 million circulating on Ethereum and only $166 million on Solana.

This change underscores how PayPal’s ongoing efforts to expand accessibility through partnerships and infrastructure developments impact the stablecoin’s user base and adoption.

PayPal’s Push for PYUSD Accessibility

PayPal has been actively working to broaden PYUSD’s reach and utility. In collaboration with Anchorage Digital, the company has introduced a rewards program for users who custody their PYUSD stablecoins with the crypto custodian. Additionally, PayPal has integrated with Crypto.com, Phantom, and Paxos to facilitate on-ramping to Solana, while a partnership with MoonPay has enabled PayPal account holders to purchase cryptocurrency directly.

This initiative extended to the betting platform Polymarket, with MoonPay assisting users to access crypto-based markets through their PayPal accounts.

Stablecoin Competition: PYUSD vs. USDT and USDC

Despite these expansions, PYUSD still trails significantly behind leading dollar-pegged stablecoins Tether (USDT) and USD Coin (USDC). According to CoinMarketCap, Tether and USDC boast market capitalizations of approximately $118 billion and $35 billion, respectively, dwarfing PYUSD’s current $513 million.

Coinbase, which has an equity stake in USDC’s issuer Circle, further incentivizes users with a 5.2% annual percentage yield for holding USDC on its platform. This level of institutional support and liquidity offers USDC and USDT a substantial advantage in terms of adoption and market share.

The LayerZero integration marks a notable step forward for PYUSD, enhancing its utility by enabling cross-chain transfers between Ethereum and Solana. As PayPal continues to broaden its crypto partnerships and expand PYUSD’s accessibility, the stablecoin’s market share may continue to grow. However, it still faces formidable competition from established players like Tether and USDC. This development reflects a growing trend toward interoperability in the crypto space, empowering users with more flexible and decentralized options for managing their assets.