🧠 2/3
— Case 2: imagine your stablecoin has traction and you want it to grow.
You want the supply to grow, because your relevance & mansion money come from taking a % off that pie.
You look into other non-ETH collaterals. It's WBTC and that's it. Literally, that's it! And what is the competition with stability fees (what protocol makes $$) comparing with other competitors? Wow... You realize, you can't make much money here. You can neither charge more nor can you grow more than X% of the collateral. Why? Take ETH. About 10%+ lost their access, a half doesn't want to ever take any risk at all and simply holds. Another part doesn't want stablecoins but just wants staking. And you end up with MAX possible penetration of low-low double digits at best. That's what the case for SAI and is the case for stables that have multicollaterals (where TAM due to their FDVs & liquidity are 1000x smaller).
This is even before we get into the fact that stability of a $1 peg and depth of the market are not cheap either. You need to pay for that in some way. End of the day, you realize that within crypto assets, you can't grow much if your ambitions are big. Surely, you can wait for $ETH to be $10K+ in which case 10% penetration is fine, but again, your growth is not in your hands = bad. Naturally, you look into other markets…
That's when you discover that "muh gold market and real estate market are x100 bigger and derivatives are x10000 bigger”… Jackpot?!
1️⃣ Fiatcoin-stablecoins & RWA
Enter RWA. Real-World Assets. Or rather, offc-chain assets. Your company equity, factoring), your house equity, gold, debt someone owes you... anything. The TAM of this stuff is literally $trillions of dollars bigger. And in many cases, the user base is prepared to pay good % as fees compared to crypto natives!
Maple, Ondo, Goldfinch, Florence, Centrifuge… there are quite a few RWA related protocols. But when you tell crypto natives that their money goes off-chain... “Gfy bro”, right? So an easier path for them is to (1) either hide those actions behind making a stablecoin (2) ask other stablecoins and lending protocol to print-allow their assets as collaterals. This is already happening, it will happen more, because there is a lot of $$.
See a decent introductory thread: https://twitter.com/jackchong_jc/status/1574745695654797312
And these stats one: https://twitter.com/s0xn1ck/status/1677998728798404611
See this: https://makerburn.com/#/rundown. Holy fuck, right?
DAI is the perfect example of "started with ethos and moving away from it". But aren't we all? It has a token, it wants $$, it must make relevant choices as a business. Ledger - same case somewhat. It's undefeated truth that You Either Die A Hero, Or You Live Long Enough To See Yourself Become The Villain. We don't like seeing it, but money flows dictate how protocols will shape their future. And unless you are a cyberpunk (none of us are, let's be honest), the choice is clear and simple. But then... be careful sitting on both chairs. Aave is also doing this, as an obvious decision.
Mental gymnastics must be an Olympics sport, amiright?
In the post above, we already articulated why so far USDC has fumbled. We also discussed USDT winning and its clear-unclear management of assets backing. Who else is here? There is half-dismantled BUSD from CZ which is lowkey being pressured to fade out, and… TUSD. TUSD was acquired by Justin Sun & Co (not directly, but it all seems close). See a few threads here & here on the recent FUD. There are no clear-clear arguments, but (1) huge unknown growth into x2+ supply (2) related to Justin’s Co (3) pushed via Binance no-fees recently… all seem sus. You decide though.
Apart from USDT, the rest are really fumbling of their own volition. Look at me, Oxford dictionary.
— Case 2: imagine your stablecoin has traction and you want it to grow.
You want the supply to grow, because your relevance & mansion money come from taking a % off that pie.
You look into other non-ETH collaterals. It's WBTC and that's it. Literally, that's it! And what is the competition with stability fees (what protocol makes $$) comparing with other competitors? Wow... You realize, you can't make much money here. You can neither charge more nor can you grow more than X% of the collateral. Why? Take ETH. About 10%+ lost their access, a half doesn't want to ever take any risk at all and simply holds. Another part doesn't want stablecoins but just wants staking. And you end up with MAX possible penetration of low-low double digits at best. That's what the case for SAI and is the case for stables that have multicollaterals (where TAM due to their FDVs & liquidity are 1000x smaller).
This is even before we get into the fact that stability of a $1 peg and depth of the market are not cheap either. You need to pay for that in some way. End of the day, you realize that within crypto assets, you can't grow much if your ambitions are big. Surely, you can wait for $ETH to be $10K+ in which case 10% penetration is fine, but again, your growth is not in your hands = bad. Naturally, you look into other markets…
That's when you discover that "muh gold market and real estate market are x100 bigger and derivatives are x10000 bigger”… Jackpot?!
1️⃣ Fiatcoin-stablecoins & RWA
Enter RWA. Real-World Assets. Or rather, offc-chain assets. Your company equity, factoring), your house equity, gold, debt someone owes you... anything. The TAM of this stuff is literally $trillions of dollars bigger. And in many cases, the user base is prepared to pay good % as fees compared to crypto natives!
Maple, Ondo, Goldfinch, Florence, Centrifuge… there are quite a few RWA related protocols. But when you tell crypto natives that their money goes off-chain... “Gfy bro”, right? So an easier path for them is to (1) either hide those actions behind making a stablecoin (2) ask other stablecoins and lending protocol to print-allow their assets as collaterals. This is already happening, it will happen more, because there is a lot of $$.
See a decent introductory thread: https://twitter.com/jackchong_jc/status/1574745695654797312
And these stats one: https://twitter.com/s0xn1ck/status/1677998728798404611
See this: https://makerburn.com/#/rundown. Holy fuck, right?
DAI is the perfect example of "started with ethos and moving away from it". But aren't we all? It has a token, it wants $$, it must make relevant choices as a business. Ledger - same case somewhat. It's undefeated truth that You Either Die A Hero, Or You Live Long Enough To See Yourself Become The Villain. We don't like seeing it, but money flows dictate how protocols will shape their future. And unless you are a cyberpunk (none of us are, let's be honest), the choice is clear and simple. But then... be careful sitting on both chairs. Aave is also doing this, as an obvious decision.
Mental gymnastics must be an Olympics sport, amiright?
In the post above, we already articulated why so far USDC has fumbled. We also discussed USDT winning and its clear-unclear management of assets backing. Who else is here? There is half-dismantled BUSD from CZ which is lowkey being pressured to fade out, and… TUSD. TUSD was acquired by Justin Sun & Co (not directly, but it all seems close). See a few threads here & here on the recent FUD. There are no clear-clear arguments, but (1) huge unknown growth into x2+ supply (2) related to Justin’s Co (3) pushed via Binance no-fees recently… all seem sus. You decide though.
Apart from USDT, the rest are really fumbling of their own volition. Look at me, Oxford dictionary.