Overview of the Stablecoin Market and Diversification Development Trends

The total market value of stablecoins has surpassed 205 billion dollars, while USDT's market share continues to decline. This article will delve into the current diversified landscape of the stablecoin market.

Traditional Stablecoins

USDT (Tether)

• Issuer: Tether
• Launch date: 2014
• Value pegging: pegged 1:1 to the US dollar, backed by reserve assets
• Market Position: One of the earliest and largest trading stablecoins in the world
• Controversy: The transparency of reserves has been a major concern.

USDC (USD Coin)

• Issuer: Founded by Circle and Coinbase
• Launch time: 2018
• Features: Strong compliance, audited monthly with public reports
• Market position: the second largest stablecoin after USDT

FDUSD (First Digital USD)

• Issuer: First Digital Labs
• Launch date: 2023
• Pegging mechanism: 100% US dollars or equivalent cash equivalents as reserves
• Compatibility: Supports Ethereum and Binance Smart Chain

DAI

• Issuer: MakerDAO
• Launch date: 2017
• Operating Mechanism: Decentralized, Over-collateralized Stablecoin
• Features: Generated by collateralizing crypto assets, pegged 1:1 with the US dollar

New Stablecoin

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

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

1. USDe

• Developer: Ethena Labs
• Operating mechanism: Maintaining 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%

2. USD0

• Issuer: Usual Protocol
• Features: Issued 1:1 with RWA assets as reserves
• Mechanism: Users deposit assets to obtain LDT synthetic assets

3. Sky Dollar (USDS)

• Issuer: Sky ( original MakerDAO )
• Features: Can be exchanged 1:1 with DAI, SKY token serves as a governance token.

4. USDD

• Issuer: TRON联合储备
• Features: Over-collateralized endorsement of various mainstream digital assets
• Transparency: The official website provides real-time staking rate inquiry.

5. BlackRock USD (BUIDL)

• Issuer: BlackRock
• Operating mechanism: Issuing tokenized shares through Ethereum
• Investment targets: cash, US Treasury bonds, and repurchase agreements, etc.
• Current yield: approximately 4.5%

6. Ondo US Dollar Yield (USDY)

• Issuer: Ondo Finance
• Operating mechanism: Supported by short-term U.S. Treasury bonds and bank deposits
• Current yield: 4.65%
• Features: 40-day lock-up period, exclusively for non-US investors

7. USDX Money (USDX)

• Issuer: Stables Labs
• Operating mechanism: Generate income through Delta neutral investment portfolio strategy.
• Features: Offers multiple coin options with higher potential returns.

8. Frax (FRAX)

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

9. Resolv USD (USR)

• Operating mechanism: Using ETH and derivatives as collateral, maintaining stability through hedging operations.
• Source of income: ETH staking rewards and hedging operation differences

10. M By M⁰ (M)

• Issuer: M⁰ Protocol
• Operating mechanism: Minting M tokens through off-chain collateral.
• Sources of income: collateral gains, minting fees, and penalties

11. yala

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

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 and USDC will continue to dominate. The development of new stablecoins mainly falls into two categories:

1. Use traditional financial assets as reserves to provide stable but lower returns.
2. Maintain stability through arbitrage, but there are transparency and regulatory issues.

The market capitalization of stablecoins has the potential to further expand, with projects like BUILD mapping off-chain assets to on-chain, creating new sources of reserves. For investors, it is worth paying attention to emerging stablecoin protocols to seize early layout and staking reward opportunities, but one should be cautious regarding platform tokens.