Stablecoin Second Wave: 5 New Common Knowledge We Need to Know

Stable coins are tokens whose price anchors fiat currency (basically US dollars), and their essence is a set of standardized smart contracts. Stable coins are not legal currency, nor are they CBDC (central digital currency).

The Trump administration clearly opposes CBDC, believing that CBDC will strengthen public power and undermine the integrity of individual freedoms, and is friendly to stablecoin policy, believing that stablecoins are conducive to enhancing and consolidating the hegemony of the US dollar. The EU and China support CDBD and are not friendly to stablecoin regulation.

Under the US stablecoin regulatory framework, the stablecoin network will be deeply integrated into the existing US dollar system. This will lead to an unprecedented fierce market competition in the stablecoin track. World Liberty Financial and Fidelity Fund have already entered the market.

Currently, the main functions of stablecoins include value storage, trading medium, and payment. The effectiveness of these functions is basically inherited from the legal currency they anchor. The fast confirmation and programmability of stablecoins make the efficiency of stablecoins far exceed that of fiat currency's SWFIT system in cross-border circulation/cleaning. The total annual settlement scale of stablecoins is now twice that of Visa payment network.

Stablecoin 2018-2019 During the first wave, the focus of project parties was on licenses and assets, and ignoring the liquidity network effect and user experience of stablecoin, resulting in almost all of the stablecoin projects except USDC.

In this second wave, as the US stablecoin regulatory framework is about to be clear, licenses are no longer the highest priority. Naturally, the priority of asset side scale, liquidity network effect and user experience is improved.

In addition to the "Son of Destiny" stablecoin projects such as the "Son of Destiny" level of the World Liberty Financial stablecoin USD1 and the stablecoin planned by Fidelity Fund, a large number of new stablecoin projects will emerge.

This second wave of stablecoins gives us ordinary people two main investment opportunities: one is YT Yield Farming, a decentralized CDP stablecoin protocol, and the other is ambush stablecoin infrastructure project.

The former is relatively professional, while the latter is more brainless. Therefore, ambush stablecoin infrastructure projects are more suitable for everyone.

Stablecoin infrastructure projects are divided into two categories: one is liquidity support projects @CurveFinance and @Perena, and the other is the new application scenario project @humafinance