Here is the English translation of the text, with the terms in <> retained and not translated:
Although it is still uncertain whether 2025 will be a turning point for stablecoins, one thing is certain: we have never been closer to this moment.
Author:
Robbie Petersen
Compiled by: TechFlow
While the total supply of stablecoins is steadily increasing, this surface-level growth figure masks a more noteworthy trend. Although the trading volume of has not yet recovered to historical highs, the number of monthly active addresses using stablecoins for transactions has been continuously increasing. This contrast indicates that the role of stablecoins is undergoing a transformation. They are no longer just the lubricant of speculation in the crypto market, but are gradually fulfilling their core promise:
to become the solid foundation of a new digital financial system.
Data source: Artemis, The Tie
(Excerpt from Delphi's
2025 DeFi Outlook Report)
Perhaps more noteworthy is that the driving force behind the mass adoption of stablecoins may no longer depend on emerging startups, but on enterprises that already have strong market coverage. In the past three months, four top fintech companies have announced their official entry into the stablecoin space: Robinhood and Revolut are developing their own stablecoins; Stripe, through the acquisition of Bridge, aims to achieve faster and lower-cost global payments; and Visa, despite knowing it will reduce its own profits, has begun to assist banks in issuing stablecoins.
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This series of actions marks a significant shift in the application of stablecoins: their proliferation is no longer dependent on ideology or technological ideals, but on winning market favor by providing clear business value. Stablecoins bring obvious benefits to fintech companies - lower operating costs, higher profit margins, and new revenue streams. It is for this reason that stablecoins are gradually integrating deeply with the core driving force of capitalism: the pursuit of profits.
As leading fintech companies use stablecoins to increase profit margins or control more payment channels, other competitors will inevitably follow suit to maintain their market competitiveness. As I mentioned in
The Stablecoin Manifesto, from a game theory perspective, the adoption of stablecoins will no longer be an option, but a necessary condition for fintech companies to maintain their market position.
## Stablecoin 2.0: Revenue-Sharing Stablecoins
Intuitively, the most obvious beneficiaries in the stablecoin ecosystem are the issuers. This is because the stablecoin market has a "winner-take-all" characteristic, which stems from the network effects of money. Currently, this network effect is mainly manifested in the following three aspects:
1.
Liquidity: USDT and USDC are the most liquid stablecoins in the crypto market. Using some of the emerging USDT fork versions may result in higher trading slippage.
2.
Payment functionality: In many emerging economies, USDT has become a common payment tool. As a digital transaction medium, its network effect is very strong.
3.
Pricing effect: Almost all major trading pairs (whether on centralized or decentralized exchanges) are priced in USDT or USDC.
In short, the more users USDT has, the more new users it will attract. This self-reinforcing network effect has helped Tether continuously expand its market share and profitability.
Although Tether's network effect is difficult to be massively disrupted in the short term, a new emerging stablecoin model - revenue-sharing stablecoins - is gradually emerging. This model is particularly suitable for the new stablecoin ecosystem driven by fintech companies. To understand its potential, we need to first understand the basic structure of the stablecoin ecosystem.
Currently, the stablecoin ecosystem can be divided into two main roles: (1) stablecoin issuers (such as Tether and Circle) and (2) stablecoin distributors (such as various applications).
At present, stablecoin issuers are earning over $10 billion in revenue per year, a figure that even exceeds the total revenue of all blockchains. However, this status quo actually has a huge structural problem: the value of stablecoins is actually driven by the distributors. In other words, if there were no trading platforms, DeFi applications, payment platforms, and wallets as distribution channels, USDT would lose its actual use case and naturally be unable to capture any value. However, the distributors are currently unable to benefit from these economic activities.
To solve this problem, revenue-sharing stablecoins have emerged. This model fundamentally changes the existing stablecoin ecosystem by redistributing the economic benefits originally belonging to the issuers to the applications that provide liquidity to the network. In simple terms, revenue-sharing stablecoins help applications profit from their distribution capabilities.
If this model is widely adopted, it may become an important, or even the primary, revenue source for applications. As profit margins gradually shrink, we may enter an era of "Stablecoin Distribution as a Service" (SDaaS), where crypto applications use the distribution of stablecoins as their core business model. This trend is very reasonable, as the value currently captured by stablecoin issuers has already exceeded the total of blockchains and applications.
Although there have been countless attempts to challenge Tether's monopoly in the past, the revenue-sharing stablecoin model is more promising for the following two reasons:
1.
The critical role of distribution channels: Unlike previous revenue-generating stablecoins that directly targeted end-users, revenue-sharing stablecoins target the distribution channels that control users. This model aligns the interests of distributors and issuers for the first time.
2.
Ecosystem synergy effect: In the past, applications that wanted to profit from the stablecoin economy usually needed to issue their own independent stablecoins. However, the limitation of this approach is that other applications have no incentive to integrate your stablecoin, as its utility is limited to your own application and cannot compete with the network effects of USDT. In contrast, revenue-sharing stablecoins, by incentivizing multiple applications to integrate simultaneously, can leverage the collective network effects of the entire distribution ecosystem.
Revenue-sharing stablecoins not only inherit the advantages of USDT, such as composability and network effects across different applications, but also further incentivize distribution partners with revenue sharing, encouraging their integration.
Currently, there are three leading players in the revenue-sharing stablecoin space:
Paxos' USDG: Launched in November this year and subject to the upcoming stablecoin regulatory framework from the Monetary Authority of Singapore. Paxos has partnered with several heavyweight partners to integrate USDG, including Robinhood, Kraken, Anchorage, Bullish, and Galaxy Digital.
The "M" of M^0: Built by the former core teams of MakerDAO and Circle, M^0 aims to become a lean and trustlessly neutral settlement layer that allows any financial institution to mint and redeem their revenue-sharing stablecoin - the "M". Unlike other stablecoins, the "M" can also serve as the underlying asset for other stablecoins (e.g., Noble's USDN). Additionally, M^0 employs a unique custodial model composed of a decentralized independent validator network and a Two Token Governor (TTG) system, which provides higher transparency and trustless neutrality compared to other models. More information about M^0 can be found in my article [link to be added].
Agora's AUSD: Similar to USDG and "M", Agora's AUSD also attracts partners by sharing revenues with the applications and market makers that integrate it. Agora has also gained the support of several renowned market makers and applications, including Wintermute, Galaxy, Consensys, and Kraken Ventures. This collaboration has aligned Agora's incentives with these stakeholders from an early stage. Currently, the total supply of AUSD has reached $50 million.
Looking ahead to 2025, I expect these stablecoin issuers to further expand their market influence, and distributors may prioritize recommending stablecoins that can generate more revenue. Additionally, market makers may also be more inclined towards these revenue-sharing stablecoins, as they can also benefit from holding large inventories.
Although "M" and AUSD are currently ranked 33rd and 36th in stablecoin supply, respectively, and USDG has not yet officially launched, I predict that at least one of these stablecoins will break into the top 10 by the end of 2025. Meanwhile, the market share of revenue-sharing stablecoins will grow from the current 0.06% to over 5% (about 83 times). With the entry of fintech companies with strong distribution capabilities, these stablecoins will experience a new wave of mass adoption.
Slow Accumulation, Sudden Explosion
While the adoption of stablecoins is often compared to the historical development trajectory of the Eurodollar, this analogy is too simplistic. Stablecoins are not Eurodollars - they are digitized, globally accessible without barriers, capable of instant cross-border settlement, and can even be used by AI agents; they will form powerful network effects in large-scale applications; and most importantly, they provide clear economic incentives for existing fintech companies and enterprises, as this aligns with the core goal of all businesses: to earn more profits.
Therefore, the view that the proliferation of stablecoins will be a slow process like the Eurodollar ignores a core fact. The only similarity between stablecoins and the Eurodollar may be that they both arise in a bottom-up manner, which cannot be easily controlled by any existing giants or governments, especially those who see this technology as a threat to their interests. However, unlike the Eurodollar, the proliferation of stablecoins will not happen gradually over 30 to 60 years, but will experience a "slow accumulation, sudden explosion" process, as their network effects will quickly reach a critical point.
Currently, the stablecoin ecosystem is rapidly taking shape. Regulatory frameworks are gradually being refined; fintech companies like Robinhood and Revolut have already started launching their own stablecoins; Stripe also seems to be exploring the possibility of controlling more payment segments through stablecoins. More notably, even industry giants like PayPal and Visa, who know that stablecoins will erode their profit margins, are actively positioning themselves in the stablecoin space, as they fear that if they don't, other competitors will seize the opportunity.
While it is uncertain whether 2025 will be the turning point for stablecoins, one thing is certain: we have never been closer to this moment.
Perhaps we have underestimated the potential of stablecoins.
