Chainfeeds Summary:
As countries and institutions rush into the stablecoin arena, the stablecoin market has the potential to be worth trillions of dollars. SevenX Ventures researcher Rui has compiled 8 opportunities for building successful stablecoins.
Source:
https://x.com/Ruisnakes/status/1859284928866775258
Author:
Rui
Viewpoints:
Rui: 1) High-yield DeFi stablecoins: Expanding yields from pure inflation, Ethena arbitraging volatility, CAP introducing MEV and arbitrage profits, Usual and Agora using their own tokens to compound treasury bond yields, Reservoir using a diversified high-yield basket, and placing cyclical strategies on Morpho and Pendle. However, the constantly growing TVL will dilute returns, and projects must find sustainable yields and true utility. 2) On-ramps for emerging markets: In emerging markets, USDT has a strong liquidity network as people rarely cash out USDT, but view it as the US dollar. Projects like Zar and Mento use grassroots GTM strategies through local agents and payment systems to onboard more users. 3) Licensed stablecoin issuers: Institutions rely on trusted stablecoin issuers to avoid the complexities of technology and regulation. Key players include Paxos (PYUSD, BUSD), brale (USC), and Bridge (B2B API). 4) Integrated stablecoin application APIs: In the future, we will face complexities across currencies, chains, and assets. AMMs like Curve and Uniswap provide the most flexible and efficient ways. Companies like Perena are actively building infrastructure to abstract away deployment, swapping, and liquidity or business logic. 5) Distributors issuing stablecoins: Issuing stablecoins provides an unparalleled business model. Tether has profited billions by investing its reserves, JP Morgan and PayPal have launched their own stablecoins, Stripe's acquisition of Bridge shows interest in owning a stablecoin stack, and Visa and Mastercard are experimenting with stablecoin integration. 6) FX platforms: Traditional FX trading has counterparty settlement risk, multi-bank system costs, global settlement time lags, and limited access. On-chain solutions leveraging Chainlink and AMMs provide the best transparency and efficiency. Citi is actively building their on-chain FX trading in Singapore, and Binance has their p2p order book product. 7) Cashouts, asset management, and margin deposits: Banks are the gatekeepers for fiat-backed stablecoins, with Standard Chartered already accepting cashout transactions, and more banks will join. Banks provide asset management services for institutions and expect to use stablecoins for stock margin deposits. 8) Stablecoin reserve yield RWAs: Tether has profited billions annually by investing its reserves like a bank. Now, most stablecoin reserves are invested in short-term Treasuries managed by BlackRock, while RWA products from Securitize, BlackRock, and Franklin Templeton provide more composable on-chain financial products, with the expectation of more risk-controlled complex high-yield on-chain products in the future.
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