Tether, as a stablecoin, achieved record profits last quarter, making it comparable to traditional financial giants. However, its profit of $5.2 billion has also attracted new competitors who hope to share a piece of this market share.
In my latest article, I conducted an in-depth analysis of the rapidly developing stablecoin field, covering both centralized and decentralized aspects. We divided this field into several main categories.
Centralized alternatives often lack transparency and typically only see high trading volumes when there are clear incentives. PYUSD is one of the few trusted stablecoins with a market value of billions of dollars.
Decentralized, government-backed stablecoins like USD0 have rapidly grown through airdrop incentives and integration with DeFi platforms such as Morpho. USD0 has a market value of approximately $250 million and quickly reached this level.
Synthetic stablecoins like USDe maintain their peg by holding both long-term spot positions and short-term futures positions. As the basis narrows, USDe has lost market share. However, new protocols like Elixir aim to improve the Ethena model by adjusting its collateral support.
Historically, there hasn’t been a high demand for stablecoins focused on maximizing decentralization and minimizing human intervention. GHO may be an exception as it relies on the active user base of AAVE.
Novel designs often attempt to implement mechanisms to improve traditional collateral debt position models. DYAD is one such stablecoin that aims to utilize excess collateral in the system through a second-generation token called KEROSENE. Users can mint more DYAD based on their external capital held in KEROSENE, which is stored in NFTs called NOTES. The more KEROSENE a user holds on their NOTES, the more yield they receive from the liquidity pool.
These new stablecoins in different categories compete in terms of yield, accessibility, liquidity, stability, and capital efficiency. New designs or adjustments to old designs make different trade-offs.
As new players enter the stablecoin field every week, the landscape is undergoing changes.
