Depth Analysis of the Stablecoin Market: A Coexistence of Tradition and Innovation

The total market capitalization of stablecoins has surpassed 205 billion USD, with USDT's market share continuing to decline, and a diversified stablecoin ecosystem is emerging. This article will provide a comprehensive analysis of the current mainstream types of stablecoins and their operating mechanisms.

Traditional stablecoin

USDT (Tether)

• Issuer: Tether
• Launch Date: 2014
• Value peg: Pegged to the US dollar at a 1:1 ratio, backed by reserve assets.
• Market Position: The world's earliest and largest trading stablecoin
• Controversy: The issue of reserve transparency has drawn significant attention.

USDC (USD Coin)

• Issuer: Circle and Coinbase co-founded
• Launch time: 2018
• Features: Strong compliance, high transparency of reserve assets
• Value pegged: Pegged to the US dollar at a 1:1 ratio, with reserves consisting of cash and short-term government bonds.
• Market Position: The second largest stablecoin, 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
• Blockchain Support: Compatible with Ethereum and Binance Smart Chain

DAI

• Issuer: MakerDAO
• Launch time: 2017
• Features: Decentralized, over-collateralized stablecoin
• Value Pegging: Maintaining a 1:1 value with the US dollar through smart contracts and collateral mechanisms.
• Operating Network: Ethereum and EVM-compatible blockchains

New stablecoin

The new type of stablecoin not only maintains price stability but also provides additional investment returns for holders. Key features include:

1. Provide returns through low-risk asset investments, 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, and so on.

1. USDe

• Developer: Ethena Labs
• Operating mechanism: Maintains a 1:1 peg with the US dollar through a Delta neutral strategy.
• Sources of income: staking rewards, funding rates, and basis income
• Current yield: approximately 8.64%

2. USD0

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

3. Sky Dollar (USDS)

• Issuer: MakerDAO (renamed to Sky)
• Features: Can be exchanged with DAI at a 1:1 ratio, SKY governance tokens are distributed annually to USDS holders.

4. USDD

• Issuer: TRON Joint Reserve
• Features: Over-collateralized endorsement of multiple mainstream digital assets
• Circulating chains: including TRON, Ethereum, BNB Chain and other 11 public chains.

5. BlackRock USD (BUIDL)

• Issuer: BlackRock
• Features: Tokenized fund, investing in high liquidity, low-risk financial instruments
• Source of income: Returns from the underlying asset, current annualized rate is approximately 4.5%

6. Ondo US Dollar Yield (USDY)

• Issuer: Ondo Finance
• Operating mechanism: supported by short-term U.S. Treasury bonds and bank demand deposits
• Sources of income: returns from underlying assets and compound interest, current annualized rate is approximately 4.65%

7. USDX Money (USDX)

• Issuer: Stables Labs
• Operating Mechanism: Generate income through Delta Neutral Investment Portfolio Strategy
• Features: Provides multi-coin arbitrage and perpetual contract hedging mechanism

8. Frax (FRAX)

• Issuer: Frax Finance
• Operating mechanism: a combination of partial collateral and algorithmic mechanisms
• Sources of income: interest income, liquidity mining, governance token FXS
• Current annualized yield: approximately 10%

9. Resolv USD (USR)

• Operating mechanism: Protect assets through ETH and derivatives collateralized hedging operations.
• Source of income: ETH staking yield and hedge operation spread

10. M By M⁰ (M)

• Features: Decentralized stablecoin protocol that allows users to earn yields from collateral.
• Operating mechanism: off-chain collateral storage, on-chain asset value verification
• 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
• Source of income: Asset appreciation through DeFi protocol products

Stablecoin Market Outlook

The stablecoin market is enormous and serves as the cornerstone of DeFi and the future PayFi. In the short term, stablecoins backed by fiat reserves like USDT/USDC will continue to dominate. The development of new stablecoins can be mainly divided into two categories:

1. Low-yield stablecoin backed by traditional financial assets
2. Maintain stable high-yield stablecoin based on arbitrage mechanism

Investors can pay attention to emerging stablecoin protocols to seize airdrop and staking reward opportunities, but should be cautious about the investment risks of platform coins.