First Digital USD (FDUSD) is once again shrinking its supply, potentially pointing at a market slowdown. FDUSD retired another 75M tokens on Tuesday, extending its series of withdrawals from Binance.
First Digital USD (FDUSD) diminished its supply in the past week, from 3.11B tokens down to 2.72B tokens. For FDUSD, this is the third episode of correcting its supply. After the March-April market peak, FDUSD performed a similar operation, retiring up to 50% of tokens.
The latest round of token withdrawals was done with the assistance of Wintermute, using one of its known wallets to move the stablecoins. The FDUSD moved back to a First Digital Labs wallet. Wintermute and Cumberland have been identified as the whale wallets with significant control over liquidity flows in the past few months.
The latest withdrawal of FDUSD from Binance follows a month of rather aggressive expansion. In August, FDUSD grew its supply from 1.9B tokens up to a peak of 3.11B. More than 90% of all FDUSD volumes are concentrated on Binance, with almost no distribution to other markets or DEXs.
The recent deleveraging of FDUSD coincided with a crash in the stablecoin’s premium. At the end of August, FDUSD once again stepped back to $0.99, signaling that a new deleveraging may be coming. The token withdrawals were not much delayed, and they immediately started to cut into the supply.
At the same time, Tether (USDT) continued to increase its supply slightly, adding around $100M since August 26.
Market slide coincides with FDUSD deleveraging
FDUSD seemingly does not even appear among top stablecoins, and its relative novelty means tracking is still difficult. Even Arkham is just discovering most of the counterparty addresses linked to FDUSD minting and redemptions.
The latest round of minting and redeeming FDUSD coincided with the price moves of Bitcoin (BTC) in August. After the August 5 market correction, the newly added FDUSD coincided with the BTC climb and recovery to $64,000.
The recent cuts to the supply coincide with a BTC drawdown, as the asset is back in the $58,000 range. With USDT printing also slowing down, the leading coin has received a bearish signal based on available liquidity.
FDUSD changed its reserves profile
In its initial stages, FDUSD was fully fiat-backed. The composition of reserves was settled about a year ago, and now FDUSD claims backing by both cash and US treasuries. Cash backing fell to under 40%, with the rest in short-term T-bills or overnight debt. FDUSD claims to be redeemable directly from First Digital Labs, though through a specific process requiring prior agreements and monitoring. For other redemptions, buyers will need to use the open market.
FDUSD aims to tailor its supply to the market demand. The asset is among the most widely used stablecoins on Binance’s markets, serving as a replacement for Binance USD (BUSD). A shrinking supply may once again coincide with a market drawdown.
The FDUSD stablecoin is minted by FD101 Limited, also known as First Digital Labs. The company is founded and based in Hong Kong. The digital asset is issued in more than 99% of cases based on Binance’s internal demand.
The stablecoin receives smart contract monitoring from Peckshield, while Prescient Assurance audits its reserves. FDUSD claims to be backed by liquid assets and fiat, publishing its first reports since the summer of 2023.
The stablecoin is also programmable, with built-in escrow functions, insurance, and other features allowing First Digital Labs and Binance to control the asset directly without resorting to third-party contracts. The most controversial feature of FDUSD is its ability to be frozen. Most of the FDUSD supply is still on Ethereum, while the coins available on BNB Smart Chain fell by 50% in the past four months.
Around 1.8B of the available FDUSD can be tracked to the Binance Hot Wallet 20. Recently, the wallet increased its holdings, while another high-balance wallet divested its holdings from above 1B tokens to around 120M. With the concentration in the hands of whales, FDUSD manages to be even more efficient than other stablecoins. The inflows of FDUSD in the market had a more direct effect compared to the expansion of other niche stablecoins.
In 2024, the overall supply of stablecoins is above 167B, though the profile of each coin is also tied to its final effect on centralized or decentralized exchanges.
Cryptopolitan reporting by Hristina Vasileva
FDUSD started to contract its supply, potentially sending a bearish signal. The stablecoin by First Digital has an outsized influence on Binance markets.
Amazon’s journey from a modest online bookstore to the world’s largest online retailer is a narrative of innovation, disruption, and relentless ambition. Today, Amazon dominates the e-commerce landscape, setting the standard for online shopping with its vast product selection, lightning-fast delivery, and customer-centric approach. This article explores the evolution of Amazon’s leadership in online shopping, examining the key strategies, innovations, and challenges that have shaped its rise to the top.
The Early Days: From Bookstore to Everything Store
Amazon was founded by Jeff Bezos in 1994 as an online bookstore, capitalizing on the internet’s potential to reach a global audience. The decision to start with books was strategic; books were easy to ship, did not require much storage space, and had a universal appeal. From the beginning, Bezos envisioned Amazon as more than just a bookstore. His long-term goal was to create the “everything store,” a one-stop-shop where customers could find and purchase anything they needed online.
The initial success of Amazon was driven by its innovative approach to e-commerce. While traditional bookstores were limited by physical space, Amazon offered an extensive catalog of books that was virtually limitless. The company’s early focus on customer satisfaction, with features like customer reviews, personalized recommendations, and a user-friendly interface, set it apart from competitors.
By 1997, Amazon had gone public, and its rapid growth continued. The company began to expand its product offerings beyond books, gradually adding categories like music, electronics, and toys. This diversification was essential to Amazon’s strategy of becoming the go-to online retailer for all consumer needs. The company’s ability to offer a wide range of products, combined with its commitment to customer service, established it as a leader in online shopping.
Innovation and Expansion: The Prime Revolution
One of the most significant milestones in Amazon’s evolution was the launch of Amazon Prime in 2005. For an annual fee, Prime members received free two-day shipping on eligible purchases, a proposition that was revolutionary at the time. The introduction of Prime was a game-changer, transforming customer expectations and further solidifying Amazon’s leadership in online shopping.
Prime was more than just a shipping service; it was a strategic move to create customer loyalty. The subscription model incentivized customers to make Amazon their default shopping destination, as the more they used Prime, the more value they received. Over time, Amazon expanded the benefits of Prime to include streaming video and music, exclusive deals, and other perks, making it an indispensable service for millions of customers.
The success of Prime can be measured by its membership numbers, which have grown exponentially over the years. As of 2024, Amazon Prime has over 200 million members worldwide, a testament to the value it offers. The Prime membership model has been so successful that it has influenced the broader retail industry, with many competitors launching their own subscription services in response.
The Technology Edge: Fulfillment and Logistics
Amazon’s dominance in online shopping is not just a result of its vast product selection and customer-centric approach; it is also rooted in its technological prowess. The company has invested heavily in building a state-of-the-art fulfillment and logistics network, which has been a critical factor in its ability to offer fast, reliable delivery to customers.
Amazon’s fulfillment centers, which are strategically located around the world, are marvels of automation and efficiency. These facilities use advanced robotics, artificial intelligence, and data analytics to manage inventory, process orders, and ship products with unparalleled speed. The company’s ability to deliver products quickly and accurately is a key reason why customers choose Amazon over other online retailers.
In addition to its fulfillment centers, Amazon has developed a vast logistics network that includes its own fleet of planes, trucks, and delivery vehicles. The company’s investment in logistics has allowed it to reduce its reliance on third-party carriers like UPS and FedEx, giving it greater control over the delivery process. This vertical integration has enabled Amazon to offer services like same-day and next-day delivery, further enhancing its competitive advantage.
Moreover, Amazon’s logistics innovations extend beyond its own operations. The company’s delivery service partner (DSP) program has created opportunities for small businesses to operate delivery routes for Amazon, while its crowd-sourced delivery platform, Amazon Flex, allows individuals to deliver packages using their own vehicles. These initiatives have expanded Amazon’s delivery capacity and ensured that it can meet the growing demand for fast shipping.
Expanding the Ecosystem: Marketplace and AWS
Another key component of Amazon’s success in online shopping is its ability to create a comprehensive ecosystem that extends beyond retail. The Amazon Marketplace, launched in 2000, has been instrumental in expanding the company’s product selection and driving revenue growth. The Marketplace allows third-party sellers to list their products on Amazon’s platform, giving customers access to a wider range of goods and enabling Amazon to earn a commission on each sale.
The success of the Marketplace has been staggering. Today, over half of the products sold on Amazon are from third-party sellers, many of whom are small and medium-sized businesses. The Marketplace has also been a critical factor in Amazon’s global expansion, as it allows sellers from around the world to reach customers in different markets without the need for a physical presence.
In addition to the Marketplace, Amazon Web Services (AWS) has played a crucial role in the company’s growth and profitability. Launched in 2006, AWS offers cloud computing services to businesses, allowing them to store data, run applications, and scale their operations with ease. AWS has become the backbone of the internet, powering everything from startups to large enterprises. The revenue generated by AWS has given Amazon the financial flexibility to invest heavily in its retail operations, including its logistics network, Prime, and original content for Prime Video.
Challenges and Criticisms
While Amazon’s leadership in online shopping is undeniable, it has not been without challenges and criticisms. The company’s dominance has raised concerns about its impact on competition, with critics arguing that Amazon’s scale and market power give it an unfair advantage over smaller retailers. There have also been concerns about the treatment of workers in Amazon’s fulfillment centers, with reports of grueling conditions and low wages sparking public outcry and calls for better labor practices.
Amazon has also faced scrutiny over its impact on the environment. The company’s rapid delivery services, which require a vast logistics network, contribute to carbon emissions and environmental degradation. In response, Amazon has pledged to achieve net-zero carbon emissions by 2040 and has invested in renewable energy and electric vehicles to reduce its environmental footprint.
Despite these challenges, Amazon continues to grow and innovate, constantly pushing the boundaries of what is possible in online shopping. The company’s ability to adapt to changing consumer preferences, invest in technology, and create a seamless shopping experience has ensured its position as the leader in e-commerce.
The Future of Amazon in Online Shopping
As Amazon looks to the future, it faces both opportunities and challenges. The rise of new technologies like artificial intelligence, machine learning, and automation will continue to shape the e-commerce landscape, and Amazon is well-positioned to leverage these innovations to enhance its operations and customer experience.
The company is also likely to continue expanding its ecosystem, integrating its retail operations with other services like AWS, Prime Video, and Alexa. This integration will further entrench Amazon in the daily lives of consumers, making it even more difficult for competitors to challenge its dominance.
In conclusion, Amazon’s leadership in online shopping is the result of a relentless focus on customer satisfaction, innovation, and scale. From its early days as an online bookstore to its current status as a global e-commerce giant, Amazon has consistently pushed the boundaries of what is possible in retail. As the company continues to evolve, it will undoubtedly remain a dominant force in the world of online shopping, shaping the future of commerce for years to come.