The market is currently in an "unbundling" phase where numerous tech companies, fintechs, and even consumer brands (e.g., Walmart) are incentivized to launch their own stablecoins to control the user experience and capture economic value. This proliferation will likely lead to a confusing user experience, eventually forcing a "rebundling" or consolidation around 5-7 major brands and service providers.
As regulation standardizes stablecoin safety, they will become increasingly commoditized, forcing issuers to compete on yield and revenue sharing. However, established players like Tether possess a powerful brand moat, especially in the global south where "Tether" is a generic term for stablecoins, giving it a durable, non-economic advantage.
The long-term winners in the stablecoin race may not be those who offer the highest yield, but those who own the end-user distribution channels. Tether's strategy of investing in various chains and applications (like Plasma) to embed USDT is seen as a powerful way to secure its dominance, regardless of its decision not to share yield directly.
Issuers like Circle face significant long-term challenges due to margin compression. Its 50% revenue share with Coinbase and the need to offer increasingly generous terms to other partners will erode profitability, leading one speaker to call it a potential "easiest short" over a long time horizon.
Analysts are highly bearish on the prospect of a successful bank consortium stablecoin. They argue that banks have misaligned incentives, are culturally and technologically slow, and are experiencing a talent drain as their top crypto-focused employees leave for more agile, crypto-native companies.
Keep pulling the thread on Ethena Labs.