Overview of the Stablecoin Market and Analysis of Innovation Trends

The total market capitalization of stablecoins has exceeded 205 billion USD, and the market landscape is changing. Although USDT still holds a dominant position as the leader, its market share continues to decline. Meanwhile, a variety of stablecoin products are continuously emerging, providing users with more choices.

Traditional Stablecoins

USDT ( Tether )

• Issuer: Tether
• Launch time: 2014
• Value pegging: pegged to the US dollar at 1:1, backed by reserve assets
• Market Position: One of the largest and most liquid stablecoins in the world.
• Controversy: The issue of reserve audit has always been a topic of debate.

USDC (USD Coin)

• Issuer: Founded by Circle and Coinbase
• Launch time: 2018
• Features: Strong compliance, high transparency of reserve assets
• Market Position: The second largest stablecoin after USDT, favored by institutional users.

FDUSD (First Digital USD)

• Issuer: First Digital Labs
• Launch time: 2023
• Pegging mechanism: 100% US dollars or equivalent cash equivalents as reserves
• Features: Compatible with Ethereum and Binance Smart Chain, supported by Binance Exchange

DAI

• Issuer: MakerDAO
• Launch date: 2017
• Features: Decentralized, over-collateralized stablecoin
• Operating Networks: Ethereum and other EVM-compatible blockchains
• Status: The highest market cap algorithm stablecoin

New Stablecoin

The new type of stablecoin not only maintains price stability but also provides additional income for holders through innovative models. Key features include:

1. Provide returns through low-risk asset investments, token staking, or structured financial strategies.
2. Use assets such as government bonds as collateral to maintain price stability and high liquidity.
3. Combine on-chain assets with off-chain funds, bonds, etc.

1. USDe

• Issuer: Ethena Labs
• Features: Maintains a 1:1 peg to the US dollar through a Delta neutral strategy.
• Sources of income: staking rewards, funding rates, and basis returns
• Current yield: approximately 8.64% (sUSDe)

2. USD0

• Issuer: Usual Protocol
• Features: Issued with RWA assets as reserves at a 1:1 ratio
• Operating Mechanism: Users deposit assets to obtain LDT synthetic assets, which can be freely traded.

3. Sky Dollar (USDS)

• Issuer: Sky ( original MakerDAO )
• Features: Can be exchanged 1:1 with DAI, SKY tokens are distributed annually to USDS holders

4. USDD

• Issuer: TRON Joint Reserve
• Features: Over-collateralized endorsement of various mainstream digital assets, highly transparent

5. BlackRock USD (BUIDL)

• Issuer: BlackRock
• Features: Tokenized fund, investing in low-risk financial instruments
• Yield: approximately 4.5%, similar to the yield on U.S. short-term Treasury bonds

6. Ondo US Dollar Yield (USDY)

• Issuer: Ondo Finance
• Features: Supported by short-term U.S. Treasury bonds and bank demand deposits
• Current yield: 4.65% APY

7. USDX Money (USDX)

• Issuer: Stables Labs
• Features: Earn income through multi-coin arbitrage and perpetual contract hedging mechanisms.
• Advantages: Provides a wider selection of coins, potential for higher returns.

8. Frax (FRAX)

• Issuer: Frax Finance
• Features: Combination of partial collateral and algorithmic mechanism
• Sources of income: interest income, liquidity mining, governance token FXS
• Current yield: about 10%

9. Resolv USD (USR)

• Features: Using ETH and derivatives as collateral, protecting assets through hedging operations.
• Source of income: ETH staking rewards and the difference in hedging operations

10. M By M⁰ (M)

• Features: Decentralized stablecoin protocol that allows for the minting of stablecoins using off-chain collateral.
• Sources of income: collateral earnings, minting fees, penalties

11. yala

• Features: Stablecoin protocol based on the Bitcoin ecosystem ( testnet phase )
• Operating mechanism: Users deposit BTC and borrow stablecoin $YU for DeFi operations.

Stablecoin Market Outlook

The stablecoin market is vast and serves as the cornerstone of DeFi and future payment finance. In the short term, stablecoins backed by fiat reserves such as USDT/USDC will continue to dominate. The development of new stablecoins largely depends on the platform's business expansion capabilities and market recognition.

Currently, the new type of stablecoins is mainly divided into two categories:

1. Using traditional financial assets as reserves, the returns are relatively stable but not high.
2. Maintain stability through arbitrage, but there are issues with transparency and security.

The market value of stablecoins has the potential to further expand, but investors should approach platform tokens with caution, primarily focusing on early layout opportunities of new protocols and staking rewards.