A fierce struggle among the largest stablecoins transpired in February 2025, with some achieving tremendous growth and others suffering devastating outflows. The contest proved to be beneficial for USDS and PayPal’s PYUSD, with both recording large inflows. In a different development, DAI—the decentralized stablecoin—saw its market cap shrink steadily throughout the month after suffering a major withdrawal over the weekend of February 3-4; the pullback appears to have been motivated by intensified competition from USDS and PYUSD, as well as by concerns over DAI’s design and governance that have led some stakeholders to dub it the “unstable stablecoin.” This episode
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