Stablecoin Market Analysis: Diversification Trends and Innovative Models

The total market value of stablecoins has exceeded $205 billion. Although USDT still holds a dominant position, its market share continues to decline. Meanwhile, various innovative stablecoins are emerging, enriching the market ecosystem. This article will delve into the characteristics and operational mechanisms of traditional stablecoins and emerging stablecoins.

Traditional Stablecoin

USDT (Tether)

• Issuer: Tether
• Launch time: 2014
• Value peg: pegged to the US dollar at a 1:1 ratio, backed by reserve assets
• Market Position: The world's first and largest stablecoin by trading volume
• Controversy: The issue of reserve transparency has always been a matter of concern.

USDC (USD Coin)

• Issuer: Circle and Coinbase co-founded
• Launch date: 2018
• Features: Strong compliance, audited monthly with public reports.
• Value Pegging: 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 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
• Blockchain Support: Compatible with Ethereum and Binance Smart Chain

DAI

• Issuer: MakerDAO
• Launch date: 2017
• Features: Decentralized, over-collateralized stablecoin
• Value pegging: Maintains a 1:1 ratio with the US dollar through smart contracts and collateral mechanisms.
• Operating Network: Ethereum and other EVM-compatible blockchains

New Stablecoin

The new type of stablecoin not only maintains price stability but also provides additional returns to holders through innovative models. The main 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 financial instruments

1. USDe

• Developer: Ethena Labs
• Operation 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% (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 (formerly MakerDAO)
• Features: Can be exchanged 1:1 with DAI, SKY token serves as a governance token.

4. USDD

• Issuer: TRON DAO Reserve
• Features: Multiple mainstream digital assets over-collateralized endorsement
• Circulation Network: TRON, Ethereum, BNB Chain and 11 other public chains

5. BlackRock USD (BUIDL)

• Issuer: BlackRock
• Launch date: March 2024
• Operating mechanism: Issuing tokenized shares through Ethereum, investing in low-risk financial instruments
• Source of income: Daily accrued earnings, approximately 4.5% annualized return rate

6. Ondo US Dollar Yield (USDY)

• Issuer: Ondo Finance
• Operating mechanism: supported by short-term US Treasury bonds and bank demand deposits
• Sources of income: returns from underlying assets and compound interest returns
• Current yield: 4.65% APY

7. USDX Money (USDX)

• Issuer: Stables Labs
• Operating mechanism: Generating income through a Delta-neutral investment strategy.
• Features: Offers a variety of coin options with higher income potential

8. Frax (FRAX)

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

9. Resolv USD (USR)

• Operating Mechanism: Using ETH and derivatives as collateral, maintaining stability through hedging operations.
• Source of income: ETH staking rewards and spread from hedging operations

10. M By M⁰ (M)

• Issuer: M⁰ Protocol
• Operating mechanism: Minting M tokens through collateral, with an arbitrage mechanism to maintain stability.
• Sources of income: collateral earnings, minting fees, penalties

11. yala

• Features: Stablecoin protocol based on the Bitcoin ecosystem
• Operating mechanism: Users deposit BTC and lend stablecoin $YU
• Source of income: Earn additional income through DeFi protocols

Stablecoin Market Outlook

The stablecoin market is massive and is the cornerstone of DeFi and future payment finance. In the short term, stablecoins backed by fiat reserves like USDT/USDC will continue to dominate. The development of new stablecoins depends on their recognition by exchanges and DeFi protocols.

Currently, new types of stablecoins are mainly divided into two categories:

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

For investors, attention can be paid to early opportunities in emerging stablecoin protocols, earning rewards through staking or participating in airdrops. However, caution should be exercised regarding platform coins to avoid becoming a bag holder.

With the continuous innovation and development of the stablecoin market, we can expect to see more interesting application scenarios and products emerge. At the same time, investors also need to remain vigilant and fully understand the risk and return characteristics of various stablecoins.