The market capitalisation of stablecoin USD1 issued by World Liberty Financial (WLFI), backed by the Trump family, fell by about $400 million over the past 2 weeks.

On Oct. 19, blockchain outlet Cointelegraph reported that USD1's market value fell to about $4.02 billion on Oct. 19 from $4.43 billion on Oct. 6. The decline was about $401 million, or 9.1 percent.

The drop followed large-scale redemptions concentrated on Ethereum and BNB Chain. Onchain Benchmark analysed that net redemptions of $184.6 million occurred on Ethereum from Oct. 6 to Oct. 15 through 63 token burns, while BNB Chain supply fell by $200.43 million through 12 burns.

In particular, about $200 million of the BNB Chain redemptions came from a single unidentified address. Onchain Benchmark said it could not confirm who controlled the funds or why the redemptions were made. The address appeared to have split transfers into $30 million to $50 million increments.

On Ethereum, more than 99 percent of tokens moved for redemption passed through a wallet marked as BitGo, the issuer and custodian of USD1. On Solana, USD1 supply was unchanged at about $1.42 billion over the same period. With no new issuance, the declines on Ethereum and BNB Chain were not offset.

USD1 traded between $0.998 and $1.000 during the period, maintaining its dollar peg. No sustained signs of depegging were identified. Transfers between Ethereum and BNB Chain were also below $1 million, indicating the reduced supply was not simply moved between the two networks.

The decline in supply on Ethereum was larger than that of other dollar-pegged stablecoins. From Oct. 6 to Oct. 15, USD1 supply fell 11.45 percent. Over the same period, USDe fell 4.93 percent, USDC fell 2.18 percent, and circulating USDT fell 0.76 percent.

Benchmark pointed to a change in the issuing entity as the next variable. It said that once WLFI's trust company opens, it will take over a token whose scale is determined by decisions of a small number of large holders, and that supply data over the next few weeks will determine whether overall supply recovers. As a result, the market is expected to watch both whether large holders make further redemptions and whether new issuance resumes.