PayPal’s stablecoin PYUSD lost nearly 30% of its market cap over the last 30 days, sliding from over $1 billion to $712 million as of Sept. 25, according to on-chain data.

The decline was primarily caused by a significant reduction of its market cap on Solana, which accounted for roughly 65% of the total market cap on Aug. 26.

The PYUSD in circulation or locked within the Solana ecosystem has fallen from $662 million to $364 million as of Sept. 25. Comparatively, its market cap on Ethereum has remained stable over the period at $340 million.

Nevertheless, the daily average transfer volume for PYUSD stood relatively strong in the past 30 days, based on Artemis data. The stablecoin registered $242.2 million in average daily transfer volume, just $11.6 million below the daily average between July 28 and Aug. 25.

Although it is not uncommon for stablecoins’ market caps to fluctuate, the PYUSD market cap negative deviation occurred in tandem with a growth of nearly 1.6%, or $3 billion, in the overall stablecoin market.

Reduced incentives

The drop was likely the result of DeFi yields falling nearly 50% over the period. The yield offered for providing PYUSD as collateral on Kamino is down almost 50% to 7.6% as of Sept. 24, compared to 14% in late August.

As a result, the total amount of stablecoins locked within the protocol slumped 30% to $296 million from $430 million.

Despite the fall, PYUSD is still the third-largest stablecoin by market cap within Solana’s ecosystem, behind Tether USD’s (USDT) $728 million share, and USD Coin’s (USDC) $2.6 billion size.

Notably, the shrinking incentives might be tied to the array of partnerships PayPal is closing regarding PYUSD. As reported by Fortune on Aug. 22, PayPal partnered with Anchorage Digital to offer stablecoin rewards.

Thus, PayPal might be dividing its incentive allocations into different fronts, expecting to capture interest in various areas related to crypto.

Additionally, PayPal announced on Sept. 25 that it will allow U.S.-located business accounts to buy, sell, and hold crypto, as reported by Bloomberg.