Should native stablecoins pass yield back to ecosystems?
Starting with USDH and USDM, yield sharing stablecoins could dominate.
I asked @Sei_Labs Research to model this out.
Our conclusion: yield sharing stablecoins are inevitable IF they can clear the regulatory hurdles.
Stablecoins generate massive amounts of yield based on the underlying assets they hold as collateral
For some blockchains, this amount could be billions of dollars, with Ethereum and Tron the biggest drivers of this.
A game theory analysis shows that as stablecoins with yield sharing proliferate, issuers will have to increase the share of yield passed through to users.
As more competitors enter the the market, pressure on issuers mounts even further.
Even if all issuers act to minimize yield passed to users, the amount of required pass through will still increase and issuer margins will trend towards zero.
Stablecoin yield is non-trivial when compared to the fees earned by blockchains.
In 2024, the Ethereum blockchain earned $2.48 billion dollars from user fees.
As we saw above, stablecoins on Ethereum could have yielded as much as $6.72 billion, almost double that.
55.46K
107
The content on this page is provided by third parties. Unless otherwise stated, OKX is not the author of the cited article(s) and does not claim any copyright in the materials. The content is provided for informational purposes only and does not represent the views of OKX. It is not intended to be an endorsement of any kind and should not be considered investment advice or a solicitation to buy or sell digital assets. To the extent generative AI is utilized to provide summaries or other information, such AI generated content may be inaccurate or inconsistent. Please read the linked article for more details and information. OKX is not responsible for content hosted on third party sites. Digital asset holdings, including stablecoins and NFTs, involve a high degree of risk and can fluctuate greatly. You should carefully consider whether trading or holding digital assets is suitable for you in light of your financial condition.