🪙As countries and institutions rush into stablecoins, a trillion-dollar opportunity emerges.
8 major stablecoin-related opportunities:
8 major stablecoin-related opportunities:
01/ High-yield stablecoin for DeFi
Expanding yield from pure inflation, @ethena_labs arbitrage from volatility, @CapLabs_ introduces mev and arbitrage profit, @usualmoney @withAUSD compound t-bill yield with its own token, @__reservoir employs a diversified high-yield basket, and place looping strategies in @MorphoLabs and @pendle_fi. However growing TVL dilutes returns, projects must find sustainable yield and genuine utility. However, only USDT, UDSC and a small amount DAI are trading pairs, other stablecoins are more like financial products atm.
Expanding yield from pure inflation, @ethena_labs arbitrage from volatility, @CapLabs_ introduces mev and arbitrage profit, @usualmoney @withAUSD compound t-bill yield with its own token, @__reservoir employs a diversified high-yield basket, and place looping strategies in @MorphoLabs and @pendle_fi. However growing TVL dilutes returns, projects must find sustainable yield and genuine utility. However, only USDT, UDSC and a small amount DAI are trading pairs, other stablecoins are more like financial products atm.
02/ On-ramping in emerging market
USDT has a strong liquidity network in emerging markets, as people rarely off-ramp USDT, they view it as the dollar. In Turkey, stablecoin purchases accounted for 3.7% of its GDP. Argentina's stablecoin premium reached 30.5% and Nigeria's 22.1%. Projects like @zarpay_app @MentoLabs use grassroots gtm via local agents and payment systems to onboard more users.
USDT has a strong liquidity network in emerging markets, as people rarely off-ramp USDT, they view it as the dollar. In Turkey, stablecoin purchases accounted for 3.7% of its GDP. Argentina's stablecoin premium reached 30.5% and Nigeria's 22.1%. Projects like @zarpay_app @MentoLabs use grassroots gtm via local agents and payment systems to onboard more users.
03/ Licensed stablecoin issuers
Institutions rely on trusted stablecoin issuers to avoid technical and regulatory complexity. Key players include @Paxos (PYUSD, BUSD), @brale_xyz (USC) and @Stablecoin (B2B API).
Institutions rely on trusted stablecoin issuers to avoid technical and regulatory complexity. Key players include @Paxos (PYUSD, BUSD), @brale_xyz (USC) and @Stablecoin (B2B API).
04/ All-in-one stablecoin API
In the future, we'll face cross-currency, cross-coin, and cross-chain complexity. AMMs like @CurveFinance and @Uniswap provide the most flexible and efficient way. Companies like @Perena__ are actively building infrastructure to abstract deployment, swap, and liquidity or business.
In the future, we'll face cross-currency, cross-coin, and cross-chain complexity. AMMs like @CurveFinance and @Uniswap provide the most flexible and efficient way. Companies like @Perena__ are actively building infrastructure to abstract deployment, swap, and liquidity or business.
05/ Distributor issued stablecoins
Issuing stablecoin provides an unparalleled business model—Tether, a 100-employee company profited billions from investing its reserve, even more profitable than BlackRock sometime. @JPMorgan and @PayPal launched its stablecoin, @stripe 's acquisition of @Stablecoin showed interest in owning the stablecoin stack rather than merely integrating USDC and @Visa @Mastercard are testing the water by integrating stablecoins.
Issuing stablecoin provides an unparalleled business model—Tether, a 100-employee company profited billions from investing its reserve, even more profitable than BlackRock sometime. @JPMorgan and @PayPal launched its stablecoin, @stripe 's acquisition of @Stablecoin showed interest in owning the stablecoin stack rather than merely integrating USDC and @Visa @Mastercard are testing the water by integrating stablecoins.
06/ Foreign exchange platform
This is one of the biggest gaps. Traditional FX facilitates over $7.5 trillion in daily volumes but suffers from counterparty settlement risk, cost of the multi-banking system, global settlement timezone differences, and limited access. Onchain solution provides best transparency and efficiency using oracles @chainlink and AMMs. @Citibank is actively building their onchain FX in Singapore, @binance has their p2p order book product.
This is one of the biggest gaps. Traditional FX facilitates over $7.5 trillion in daily volumes but suffers from counterparty settlement risk, cost of the multi-banking system, global settlement timezone differences, and limited access. Onchain solution provides best transparency and efficiency using oracles @chainlink and AMMs. @Citibank is actively building their onchain FX in Singapore, @binance has their p2p order book product.
07/ Off-ramping, asset management and margin deposit
Bank is the gatekeeper for fiat-backed stablecoins, @standardchartered started to embrace off-ramping, and more will join. Banks offer asset management services to institutions and expecting using stablecoins as margin deposits for stocks.
Bank is the gatekeeper for fiat-backed stablecoins, @standardchartered started to embrace off-ramping, and more will join. Banks offer asset management services to institutions and expecting using stablecoins as margin deposits for stocks.
08/ RWA for stablecoin reserve yield
RWA is still young. Tether profits billions a year from investing their reserve like a bank. Now most of the stablecoin reserves invest into short-dated treasuries managed by @BlackRock, and RWA products issued by @Securitize @BlackRock @FTI_US offer more onchain financial product composability, expecting future more sophisticated high-yield products onchain with manageable risk.
RWA is still young. Tether profits billions a year from investing their reserve like a bank. Now most of the stablecoin reserves invest into short-dated treasuries managed by @BlackRock, and RWA products issued by @Securitize @BlackRock @FTI_US offer more onchain financial product composability, expecting future more sophisticated high-yield products onchain with manageable risk.
Open questions:
· Will regulations compromise "open finance," given that compliant stablecoins can potentially monitor, freeze, and withdraw funds?
· Will compliant stablecoins avoid offering yields to maintain non-security status, and then DeFi can't benefit from their expansion?
· Can any open blockchain truly handle vast sums of money and the IRL TPS?
· Will the separation of currency and jurisdiction introduce more chaos or opportunities?
dive in now ⬇️
mirror.xyz/sevenxventures…
· Will regulations compromise "open finance," given that compliant stablecoins can potentially monitor, freeze, and withdraw funds?
· Will compliant stablecoins avoid offering yields to maintain non-security status, and then DeFi can't benefit from their expansion?
· Can any open blockchain truly handle vast sums of money and the IRL TPS?
· Will the separation of currency and jurisdiction introduce more chaos or opportunities?
dive in now ⬇️
mirror.xyz/sevenxventures…
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