“Yield-bearing stablecoins” are not money or stablecoins.
Stablecoins are already a $150 billion market and settle $10T annually. We see them growing to $3T by 2030. “Yield-bearing stablecoins” are not part of this market.
At @AgoraDollar, we believe that digital dollars are going to take over the world, starting with the Eurodollar market. Our own AUSD’s model will be the dominant form in the world by 2030.
Keep reading to learn more about our model with AUSD and the start of Stablecoin 3.0. Coming to Eth Mainnet in June:👇
Stablecoins are already a $150 billion market and settle $10T annually. We see them growing to $3T by 2030. “Yield-bearing stablecoins” are not part of this market.
At @AgoraDollar, we believe that digital dollars are going to take over the world, starting with the Eurodollar market. Our own AUSD’s model will be the dominant form in the world by 2030.
Keep reading to learn more about our model with AUSD and the start of Stablecoin 3.0. Coming to Eth Mainnet in June:👇
Eventually, all other currencies will be digitized too, and FX trading will predominantly occur on-chain. As these on-chain dollars proliferate, businesses will demand payment coins and will look to partner with issuers who share their economics.
Businesses, such as exchanges, trading firms, and applications, are the ones who drive utility and liquidity to these payment tokens network. Agora solves this issue and pays the most important pieces of the monetary network: your business. 🤝
Businesses, such as exchanges, trading firms, and applications, are the ones who drive utility and liquidity to these payment tokens network. Agora solves this issue and pays the most important pieces of the monetary network: your business. 🤝
Let’s briefly cover how we define the Stablecoin evolution over the last decade:
Stablecoin 1.0.
In the early and mid 2010’s Bitcoin was the primary quote token and store of value against other volatile pairs on centralized crypto exchanges. This is suboptimal unless you’re tracking your wealth and paying your taxes in Bitcoin.
The Bitfinex and Tether team were the first to bring centralized, digital dollars to life in a meaningful manner. You sent them fiat, and in return they minted a USD payment token. There was now a dollar-backed alternative that facilitated trading and moving out of risk assets on-chain. USDT was the first-mover and is stablecoin 1.0.
Stablecoin 2.0.
Following the growth of Tether, several new entrants entered the market including USDC, BUSD, etc. These companies built upon the Tether model by introducing greater transparency around reserves, U.S. banking partners, and generally-speaking, a pursuit of some form of license.
Most critically, however, they all had retained USDT’s single-partner model to drive distribution.
Stablecoin 1.0.
In the early and mid 2010’s Bitcoin was the primary quote token and store of value against other volatile pairs on centralized crypto exchanges. This is suboptimal unless you’re tracking your wealth and paying your taxes in Bitcoin.
The Bitfinex and Tether team were the first to bring centralized, digital dollars to life in a meaningful manner. You sent them fiat, and in return they minted a USD payment token. There was now a dollar-backed alternative that facilitated trading and moving out of risk assets on-chain. USDT was the first-mover and is stablecoin 1.0.
Stablecoin 2.0.
Following the growth of Tether, several new entrants entered the market including USDC, BUSD, etc. These companies built upon the Tether model by introducing greater transparency around reserves, U.S. banking partners, and generally-speaking, a pursuit of some form of license.
Most critically, however, they all had retained USDT’s single-partner model to drive distribution.
What are some of the main challenges of Stablecoin 1.0 and Stablecoin 2.0?
1) Single-partner models are rife with conflict of interest for a monetary network. We believe digital dollars are public goods. Coinbase and Binance have their own stables that they distribute. For every other exchange or chain that uses these payment tokens in their ecosystem, half (or more) of the unit economics is going to one of your biggest competitors!
At Agora, we embrace an open model, we don’t pick winners and losers and instead compensate all service partners, ensuring a fairer distribution of economic benefits.
2) Rise in rates and profitability of minters (Eg. Tether + Circle) attracted competitive models. As interest rates rose, these ’minters’ margins improved, attracting more attention. In 2023, $8B was siphoned out of crypto by two primarily rent-seeking players. This highlighted the potential for a new iteration of stablecoins: the “yield-bearing stablecoin”. Several companies have launched these “yield-bearing stablecoins”.
From our perspective, however, this approach feels like jamming a square peg into a round hole.
1) Single-partner models are rife with conflict of interest for a monetary network. We believe digital dollars are public goods. Coinbase and Binance have their own stables that they distribute. For every other exchange or chain that uses these payment tokens in their ecosystem, half (or more) of the unit economics is going to one of your biggest competitors!
At Agora, we embrace an open model, we don’t pick winners and losers and instead compensate all service partners, ensuring a fairer distribution of economic benefits.
2) Rise in rates and profitability of minters (Eg. Tether + Circle) attracted competitive models. As interest rates rose, these ’minters’ margins improved, attracting more attention. In 2023, $8B was siphoned out of crypto by two primarily rent-seeking players. This highlighted the potential for a new iteration of stablecoins: the “yield-bearing stablecoin”. Several companies have launched these “yield-bearing stablecoins”.
From our perspective, however, this approach feels like jamming a square peg into a round hole.
“Yield-bearing stablecoins” are not money or stablecoins. Why?
What are some of the primary traits that make something money or a stablecoin? Utility, Liquidity, and Means of Transaction.
1. Lower Utility and Acceptance. If you are an American, it is relatively straightforward that “yield-bearing stablecoins” are security products. As a result, they miss out on the largest global capital market and any American-linked business. Moreover, these products are likely to fall under securities legislation in other global markets.
Not only does this deprive you of customers, it also deprives you of liquidity providers, vendors, and a higher utility ceiling. Your product is not freely tradeable.
2. No Margin for Development. This is probably the issue that is less frequently addressed in public discourse. Liquidity stems from both organic and inorganic usage by market participants, including market makers, trading firms, and everyday users or applications. “Yield-bearing stablecoins” often lack margin to sustain their own business, let alone pay for liquidity and to develop an ecosystem. We’ve observed liquidity issues each time these products launch on new chains. 10 basis points of revenue on $1B in AUM translates to $1M in revenue per year, this amount is likely insufficient to even cover legal fees and licenses in one jurisdiction.
What are some of the primary traits that make something money or a stablecoin? Utility, Liquidity, and Means of Transaction.
1. Lower Utility and Acceptance. If you are an American, it is relatively straightforward that “yield-bearing stablecoins” are security products. As a result, they miss out on the largest global capital market and any American-linked business. Moreover, these products are likely to fall under securities legislation in other global markets.
Not only does this deprive you of customers, it also deprives you of liquidity providers, vendors, and a higher utility ceiling. Your product is not freely tradeable.
2. No Margin for Development. This is probably the issue that is less frequently addressed in public discourse. Liquidity stems from both organic and inorganic usage by market participants, including market makers, trading firms, and everyday users or applications. “Yield-bearing stablecoins” often lack margin to sustain their own business, let alone pay for liquidity and to develop an ecosystem. We’ve observed liquidity issues each time these products launch on new chains. 10 basis points of revenue on $1B in AUM translates to $1M in revenue per year, this amount is likely insufficient to even cover legal fees and licenses in one jurisdiction.
Yield products are great compliments to AUSD, USDC, and USDT for those with low-velocity capital specifically aimed at generating yield.
So if “yield-bearing stablecoins” are complements to stablecoins and not a solution to the problems above, how does one create a more equitable business that compensates those that drive liquidity and utility to the payment network?
So if “yield-bearing stablecoins” are complements to stablecoins and not a solution to the problems above, how does one create a more equitable business that compensates those that drive liquidity and utility to the payment network?
Stablecoin 3.0.
AUSD represents the next iteration of stablecoins.
At Agora, we believe businesses are the ones that drive organic utility and liquidity to stablecoins. They are the ones developing applications, enabling trading, and facilitating their use as collateral or payment. They are the ones with millions of users, and they should be compensated for the services they provide to the money network.
We designed AUSD’s model to be the best stablecoin for your business. We compensate businesses based on services they provide, some of which include: listing our token, providing liquidity, marketing, and accepting AUSD as payment or collateral on their platform.
AUSD represents the next iteration of stablecoins.
At Agora, we believe businesses are the ones that drive organic utility and liquidity to stablecoins. They are the ones developing applications, enabling trading, and facilitating their use as collateral or payment. They are the ones with millions of users, and they should be compensated for the services they provide to the money network.
We designed AUSD’s model to be the best stablecoin for your business. We compensate businesses based on services they provide, some of which include: listing our token, providing liquidity, marketing, and accepting AUSD as payment or collateral on their platform.
Because businesses control the user experience. We share Agora’s revenue with our business partners providing them with a meaningful, consistent cash flow to their business. The remaining funds are used to run liquidity programs, ensure compliance, provide security, and operate the business.
This fresh stream of revenue allows businesses to:
- Hire additional developers
- Increase marketing rewards program
- Improve security
- Spend more on user acquisition
This fresh stream of revenue allows businesses to:
- Hire additional developers
- Increase marketing rewards program
- Improve security
- Spend more on user acquisition
Imagine a world where some applications take a small share of the income from Agora and use the majority to benefit users, creating a win-win situation where businesses thrive and users enjoy enhanced services and better user experience. 
Et voila! The majority of the $8B that was siphoned out of crypto in 2023 is being returned to businesses across the crypto ecosystem. Not only is this a more equitable model, but using AUSD strengthens all of crypto and is coming to Eth Mainnet in June.
This is why we started Agora. 💪⛓️
This is why you join the 100+ businesses that have requested to onboard to AUSD.⤴️
This is Stablecoin 3.0.💵
This is why we started Agora. 💪⛓️
This is why you join the 100+ businesses that have requested to onboard to AUSD.⤴️
This is Stablecoin 3.0.💵
Full post:
medium.com/agora-ausd/aus…
medium.com/agora-ausd/aus…
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