Like dollars in the global economy, in digital assets, so-called stablecoins pegged to the US dollar tend to flow between blockchains to where the most interesting opportunities and activities are open for business. As such, cross-chain data on stablecoin transfers can provide insights into activity and growth.

Increasingly, Web3 participants don’t limit their searches for new opportunities and activities to a single blockchain. They’re looking at a range of applications on new and established Layer-2 blockchains and Layer-1 blockchains.

Often, they get involved in these opportunities by transferring stablecoins via cross-chain communication: systems that pass assets and information with some degree of security between independently secured blockchains. Dollar-pegged stablecoins provide an easy place to store liquidity with lower risk of volatility, while looking for these new opportunities.

Stablecoins also benefit from a wide range of cross-chain support — from Turing-complete networks like Axelar GMP that can take any application logic into the interchain, to pairwise lock-and-mint bridges controlled by multisigs.

At Axelar, the core team has been watching cross-chain data on stablecoin movements, by gathering and indexing data on all these cross-chain routes.

Complete cross-chain data on activity over Axelar network can be found at axelarscan.io and the Axelarscan API. The Axelar core team has also developed insights into which cross-chain metrics should be used to measure growth and activity in the interchain.

We’ve been working with ContributionDAO, a group that is active in the Axelar community, to gather cross-chain data from all of the largest cross-chain networks and add it to the data from Axelarscan for a complete picture of cross-chain activity.

Chart: quarterly cross-chain inflows by blockchain

This chart shows quarterly stablecoin net inflows to the top five chains for cross-chain transfers. (The list of top stablecoins includes BUSD, DAI, FRAX, LUSD, SUSD, TUSD, USDC and USDT.) The chains, bridges and networks included in the set of data sources are listed, below.

What shows on the chart is net flows into Avalanche and Fantom declining, in favor of net stablecoin flows into Arbitrum and BNB Chain. Since January, 2022, Arbitrum has gone from 9% of the share of quarterly net cross-chain inflows, to 33%. BNB Chain, meanwhile, grew from 11% to 21%.

What can these numbers tell us? They probably track similar to TVL, on-chain volume or other blockchain metrics now widely understood as indicators of economic activity. However, cross-chain data does have some particularities that may make cross-chain transfers uniquely useful as a signal for those watching the blockchain industry: 1) they may be leading or lagging relative to trends observable in other data; 2) they indicate a specific intent to move so-called dry powder from one ecosystem to the next.

Cross-chain application development and use is at a very early stage, more nascent perhaps than the development of applications and use cases within the boundaries of single chains. Therefore, analysis based on cross-chain activity is even earlier in its development.

We’ll continue to gather this data and develop these methods of analysis. Watch this space for further updates.

Thanks to ContributionDAO for their work making this data research possible.

Cross-chain data sources as of May 24, 2023

Cross-chain systems ingested

Chains ingested

multichain synapse celer harmony_bridge hop wormhole near_rainbow optimism_bridge boba_bridge polygon_bridge nomad connext hyphen layerzero axelar across

Acala Acre Agoric Arbitrum Nova Arbitrum One Astar Aurora Avalanche C-Chain Axelar Network BNB Chain BitTorrent Chain Mainnet Bitgert Mainnet Boba Network CMP-mainnet Canto Celo Mainnet Comdex Cosmos Cresent Network Cronos Mainnet Doge Mainnet EVMOS Ethereum Mainnet Fantom Mainnet Fuse Mainnet Gnosis Chain HECO Harmony One Injective Juno KCC Mainnet Karura Kava Mainnet KiChain Mainnet Klaytn Mainnet Cypress Kujira Metis Andromeda Mainnet Milkomeda C1 Mainnet Moonbeam Network Moonriver Network Near Network OKX Chain Oasis Chain Mainnet (OAC) Optimism Osmosis Polygon Mainnet Regen Network Secret Network Solana Network Stargaze Syscoin Mainnet Telos Blockchain Terra Terra Classic Umee Velas Mainnet XPLA’