1USDT≠1USDC? An Analysis of the "Dark Forest" Behind Stablecoin Swaps

Author: Barter

Compiled by: Tim, PANews

Stablecoin Swap: The Good and the Bad

The total supply of stablecoins is expected to nearly double in 2024, increasing from $129.8 billion to $203.4 billion, with more than half existing on the Ethereum chain. In the face of dozens of stablecoins circulating in the market and the continuous emergence of new ones, ensuring that liquidity swaps are as close to a 1:1 exchange rate as possible is crucial. The Barter team conducted in-depth research and found: practice

Stablecoin swaps often deviate from a 1:1 exchange rate. This post will analyze this issue.

seems ordinary, but in fact, it is worth its weight in gold.

According to DEX trading data, the proportion of stablecoin trading volume to total trading volume remains in the range of 20-30%, while the proportion of its transactions is always less than 5%. During April 2025, stablecoins accounted for 31.5% of transactions ($16.6 billion in absolute terms) and only 4.6% of transactions. This means that the average size of a single stablecoin transaction is 9.5 times that of a regular DEX transaction.

The lower the TVL, the higher the efficiency.

The TVL of the stablecoin liquidity pool fell from a peak of $12.3 billion in January 2022 to $600 million in May 2025. However, since the beginning of 2022, the trading volume of stablecoins has continued to grow, resulting in a 34-fold increase in liquidity turnover, reaching a maximum of 824% in a single week as of April 2025. This means that the market structure is shifting towards greater capital efficiency, with liquidity pools now supporting significantly larger trading volumes.

Stable exchange ≠ Stable execution

In the retail trading over the past year, $8.1 billion in stablecoin exchanges experienced slippage losses exceeding 0.1%. Among these, $930 million of trades had slippage exceeding 1%, which is an unusually high situation in stablecoin exchanges, and 78.5% of the high slippage trades were concentrated in trading pairs with lower liquidity.

Although a 1% slippage may seem trivial at first glance, it exposes deeper scale efficiency issues in high-volume stablecoin exchange scenarios. As a result, stablecoin exchanges currently account for 53.8% of all sandwich attack transactions, while MEV (Miner Extractable Value) and arbitrage transactions represent 47.0% of the total trading volume of stablecoin exchanges, amounting to $1.61 billion weekly.

Low cost but high price

The root cause of the high proportion of harmful transactions in stablecoin swaps is fee compression. In the past two and a half years, the average fee for stablecoin swaps has plummeted 5.5 times to just 0.011%, and the volume-weighted fee is as low as 0.005%. While low fees can attract order flow, they also lead to an unusually high proportion of harmful transactions. For example, on the Uniswap V4 platform, which offers ultra-low fees of 0.001%, up to 80.2% of the stablecoin swap volume has seen harmful MEV transactions.

Numerical Analysis of Friction Costs in Stablecoin Exchange

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