The Race to Replace Tether

Tether, which aims to keep its token at parity with the U.S. dollar by backing each token with $1 in bank deposits, accounts for the vast majority of the stablecoin market by total value, exchange volume and other metrics.

The market has begun to show signs of anxiety around tether, centering on the firm's access to banking services and its claims to have fully collateralized the outstanding tether supply.

As one might expect in such a perfect storm, tether has begun to lose some market share to these competitors in the week and a half since it broke the buck, data analyzed by CoinDesk shows.

While TUSD and USDC have made the biggest inroads, the data shows no clear winner at this stage, and tether remains firmly on top.

"Tether has definitely lost market share in terms of the supply of USD allocated to different stablecoins," Nic Carter, creator of the blockchain data site Coinmetrics, told CoinDesk.

According to Coinmetrics data analyzed by CoinDesk, tether's market capitalization as a share of the broader stablecoin market has steadily declined, with most of that decline coming from a reduction in tether supply.

"Prior to the run," Carter said, referring to a period in mid-October when tether's exchange rate dipped below $0.93 according to CoinMarketCap, "Tether consisted of about 94 percent of the total supply in stablecoins; that collapsed to 83 percent after the run."

The primary reason for this shift is that Bitfinex - a cryptocurrency exchange that shares executives and owners with Tether - has sent 780 million USDT to a company-controlled wallet known as the Tether Treasury since Oct. 14.

Unsurprisingly, during and shortly after the "Run," a number of exchanges - including OKEx and Huobi - rushed to list alternatives to tether.

All told, tether is still dominant, but competition from its many rivals is heating up.