With the continuous development of the Block ecosystem, the market's attention to its future development direction and value distribution is increasing day by day. This article will analyze the various tracks of the Block market and their potential value from multiple dimensions.
Compared to the traditional framework, this analysis adopts a more refined classification method, which stems from the complexity and subtle differences in the payment field itself. For investors, it is particularly important to accurately grasp the role positioning and ownership structure of each participant. The main classifications include:
- Settlement Rails
- Stablecoin Issuers
- Liquidity Providers
- Value Transfer / Currency Services
- Aggregated APIs / Messaging Platforms
- Merchant Onramps
- Stablecoin-Driven Applications
Someone may ask: why do we need so many categories, especially without covering core infrastructure such as wallets or third-party compliance? This is because each field has its unique "moat" and different ways of value capture. Although there is overlap between suppliers, understanding the uniqueness of each level is crucial. The following is an analysis of the value distribution in each field:
1. Settlement Rails
This is a typical network effect-dominated field, with core competitiveness reflected in:
- Deep liquidity
- Low-cost structure
- Fast settlement
- Stable system availability
- Native compliance and privacy protection
This is likely to form a winner-take-all market. General-purpose Blocks are difficult to meet the scalability requirements of mainstream payment networks, and Layer 2 or dedicated solutions may have more development potential. The winners in this field will be highly valuable and are likely to focus on the Stablecoin / payment field.
2. Stablecoin Issuers
Currently, issuers such as and Tether have achieved remarkable success thanks to strong network effects and a high-interest rate environment. But future development requires:
- Building efficient and reliable infrastructure
- Improving compliance standards
- Optimizing minting/redemption processes
- Strengthening integration with central banks and core banking systems
- Enhancing overall liquidity (e.g., ARPA)
While SaaS (Stablecoin as a Service) models like Paxos may spawn more competitors, neutral non-bank institutions and FinTech-issued Stablecoins may have an advantage, as transactions between closed systems require a trusted neutral third party. Issuers already have a lot of value, and some issuers will continue to dominate, but they need to develop more comprehensive businesses beyond just issuance.
3. Liquidity Providers (LPs)
Currently, the market is mainly dominated by OTC and exchanges, exhibiting a high degree of commoditization. Competitive advantages primarily depend on:
- Low-cost capital acquisition
- System stability
- Deep liquidity and trading pair support
In the long run, large institutions will dominate the market, and specialized Stablecoin LPs will find it difficult to establish lasting advantages.
4. Value Transfer / Currency Services (Stablecoins' "PSPs")
The "moat" of these Stablecoin orchestration platforms (such as Bridge and Conduit) comes from:
- Proprietary payment rails
- Direct banking relationships
- Global coverage capabilities
- Sufficient liquidity
- High-level compliance capabilities
There are relatively few platforms that truly own proprietary infrastructure, but successful ones are likely to form oligopolies in regional markets and complement traditional PSPs (Payment Service Providers) to become very large enterprises.
5. Aggregated APIs / Messaging Platforms
These market participants often claim to provide the same services as PSPs, but in reality, they are only packaging and aggregating APIs. These platforms do not bear compliance risks or operational risks, and more accurately, they should be seen as market platforms for PSPs and LPs.
Although these platforms can currently charge higher service fees, as they do not truly address the core challenges in the payment process or participate in infrastructure building, they ultimately face the risk of profit compression and even complete elimination.
These platforms often brand themselves as the "Plaid of the stablecoin space", but they overlook a key fact: blockchain technology has already solved most of the pain points that Plaid addressed in the traditional banking and payments space. Unless they can expand their suite towards the end-user side and take on more responsibility in the technology stack, it will be difficult for them to maintain their profit margins and the sustainability of their business.
6. Merchant Gateways
These platforms help merchants and businesses accept stablecoin or cryptocurrency payments. While there is sometimes overlap with PSPs, they primarily focus on providing convenient developer tools, integrating third-party compliance and payment infrastructure, and packaging them into a user-friendly interface. They hope to emulate Stripe's growth path - gaining market share through easy integration, and then horizontally expanding their suite of services.
However, unlike Stripe's early market environment, developer-friendly payment solutions are now ubiquitous, and channel distribution capabilities are the key to success. Incumbent payment giants can easily partner with payment orchestration companies to add stablecoin payment options, making it difficult for pure crypto gateways to find their market positioning. While companies like Moonpay or Transak have enjoyed strong pricing power in the past, this advantage is expected to be difficult to sustain.
In the B2B space, particularly in large-scale fund management and scalable stablecoin applications, there may still be opportunities, but the B2C space is highly competitive and faces significant challenges.
7. Stablecoin-Driven Fintech and Applications
Establishing a "digital bank" or "fintech" product based on stablecoins is easier than ever, leading to intense competition in this space. Success will depend on distribution capabilities, marketing strategies, and differentiated product insights - not much different from traditional fintech.
In developed markets, established fintech giants like Nubank, Robinhood, and Revolut can easily integrate stablecoin functionalities, while startups need to find unique value propositions.
In emerging markets, there may still be opportunities for unique products (such as Zarpay), but it will be difficult to succeed in developed markets if the only differentiating factor is stablecoin-supported financial services.
Overall, pure crypto/stablecoin consumer startups in this category may face an extremely high failure rate and continue to face challenges. However, enterprise-facing businesses may still find their niche markets.
Conclusion
While this framework does not cover all edge cases and overlapping domains, it provides a useful framework for investors looking to delve deeper into this space. As the market continues to evolve, new opportunities and challenges will emerge, and understanding these market dynamics is crucial for industry participants.
