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How are Stablecoins fundamental for the future of finance?
Recorded: June 5, 2025 Duration: 0:55:48Space Recording
Short Summary
In a recent discussion at Stable Summit, industry leaders explored the pivotal role of stablecoins in the future of finance, highlighting significant developments such as Circle's IPO, the upcoming Genius Act, and innovative projects like Curve and Euler Swap. The conversation underscored the importance of regulatory clarity and the potential for massive growth in the adoption of stablecoins and DeFi solutions.
Full Transcription
Thank you. Thank you. GM, GM, how's everyone doing?
Pretty good.
I think we're waiting for one more person and then it started.
It's a hot day here in New York. I think it's like the first day i was walking around and i was sweating yeah it's starting to get nice it's been pretty bad for the past few days weeks or weeks
actually yeah yeah it was like i'm actually just really raining cold at the
oh you're leaving oh where are you going, now that the nice weather is here,
I've decided to leave.
No, I'm going to Toronto.
Okay.
That's still a nice spot.
Yeah.
Hello.
Hi, everyone.
Hello, hello. Hello. Hi, everyone. Hello. Hello. Hello.
All right. I think.
I think we'll get started in like a few seconds.
Just waiting for more people to join.
OK. All right. We'll get started.
I'm now the co-host.
All right. Welcome to the space hosted by Staple Summit.
How are stable coins fundamental for the future of finance?
of finance. Thank you, Stable Summit, for having all of us. A reminder, Stable Summit
Thank you, Staple Summit, for having all of us.
is happening in Comm this coming June 27th, so everyone should get tickets to that. We
love Stable Summit. Really, some of the best events along the conference circuit, so wanted
to plug that in there. Before we get started, for those unfamiliar with our prestigious guests on stage, guys,
you can do a little intro to yourself and what you're working on.
Martin, you're free to go first.
Okay, yeah.
I'm Martin.
I'm working for Curve, the AMM and also like CDP, StableCoin. We have Curve USD. I'm doing BD work and also like representing Curve in these kind of discussions, basically. Yeah, that's from my side.
Sam, you want to go next?
Sam, you want to go next?
Sure. Hey everybody, I'm Sam,
CEO, co-founder of Phoenix Labs,
and we're working on Spark,
which does lending within the Sky ecosystem,
formerly known as MakerDAO.
Hey everyone. Yeah, I'm Michael, co-founder of Euler Labs.
We're the builders of Euler and more recently a new protocol called Euler Swap.
All right, thank you everyone for being here.
To start things off, today was a big day for stable coins circle had its ipo uh it launched uh i think it exceeded
expectations and opened at 31 a share um and just tons of hype really a seminal moment for stable
coins so so to start things off what are everyone's thoughts on this event and what do you think it
means for stablecoins?
I guess I'll take a stab and go first.
Yeah, I think it's huge to have more and more publicly listed crypto companies.
Yeah, on stock exchanges, it's absolutely massive.
It brings huge amounts of exposure to the industry,
especially good faith, well-behaved actors that have, you know,
probably done a great job in crypto.
I think it's good for all of us. I think this also is going to be really big for fintechs and their sort of
approach to the industry, especially with changes in regulation,
which I guess we might cover as well.
Yeah, I think it's going to really open the door for a lot more people to to get involved and I
think we're just gonna see huge huge surge in growth after this or the other
projects will obviously be looking around looking at their success and the
success of some of the other stablecoin issuers and yeah and wanting to
replicate that and get a piece of the pie.
So I think it's going to become even more competitive after this and the success that they've had.
So yeah, it's a very exciting, pivotal moment,
probably for stable coins and the wider industry.
Yeah, I'll echo that.
I mean, I don't really have too much to say about the IPO in particular,
but just the change in attitude with US regulations has been
really really awesome to see. I think the industry is finally starting to get a
tailwind at its back and so yeah I'm just like really bullish on the future
and this IPO is just like another thing that's you know it's it's it's it's been
very popular so you know that's a good sign people are very bullish on crypto so that's great
Yeah, from my side I just think it's like the perfect timing so if not like yeah easy to do basically so they
de-postponed it and now uh yeah they are on the spot yeah it's really crazy how things switch
because at this time last year um things were quite hostile in the us you had all these different
lawsuits against crypto companies um i guess you can say we're still reeling from the ramifications of things that happened in in
the years prior but now for the past few months things have just completely turned 180 uh which
has been great to see and it looks like stable coins are really at the tip of the sphere of it
all especially with the genius act which is near passing. A few weeks ago, a very important procedural vote, it got past it.
Now it will have to go through like a formal vote in the Senate, then House.
And hopefully, like fingers crossed, it looks quite likely to be passed by the summer.
Have you guys looked at the bill at all?
What are your guys' thoughts on the Genius Act?
Do you support it?
Are you against it?
Are there things that you really like in the bill?
Are there things you think could be improved?
Yeah, guys, I'll let you guys go ahead.
Yeah, I mean, maybe I can comment.
So I haven't read it in detail, but I know the high-level points.
I think there's a few points here.
So one thing is there's a differentiation in on-chain yield-bearing stablecoins
and stablecoins as outlined in the bill.
And those are referring to more fiat backed ones, you know, your circle, your tether, this kind of stuff.
So there is a difference between types of stablecoins in DeFi.
So I think that's important.
So something like USDS is not covered by this bill.
something like USDS is not covered by this bill. I do, I am for the embracing of crypto and
regulating it where it makes sense. And so I'm kind of like the direction this is going.
Some things I don't like about as much in the bill is this move towards banning yield-bearing
stablecoins, which seems like a move that's entirely being driven by the banking lobby in the US.
So I don't view that particular section as good for anybody except for the owners of
banks, basically.
So it's not perfect, but I think it's a step in the right direction.
What exactly is that section that bans yield-bearing stablecoins?
So like payment stablecoins, they're fine, but they just can't earn yield?
Yeah, exactly.
You can't earn yield.
But I mean, all stablecoins earn the risk-free rate by default, even with 100% reserve, which
is, I mean, makes sense for payment stablecoins.
But there's no reason that like margin should be entirely going to the issuer of the stable coin.
It should be going mostly to the users because it's the risk-free rate.
So users as people using the stable coin, you should be getting most of the yield for holding the asset, in my view.
Yeah, I agree totally on this.
But somehow it's like anti-competition what they did with this.
Because otherwise, if they would allow real being stablecoin, so you as a issue have like an incentive to share this with your holder,
people holding a stablecoin, and now basically they don't allow this. And so it's like, yeah, there's no competition to get lower, you know, to
pass on the most part of the risk free rate based to your retail users. And you still
can do it. You just, you don't do it directly, like a circle, like an integration or use
this integration in Coinbase, where they basically paid you you forward part of the revenue they generate so that you can
basically use it as a tool for business to business because you have to renew so you forward it to
integrators but you're not allowed to have like it being being stable coins which are commonly used
on chain basically and yeah i guess it's heavily influenced by circle or lobbyist by circle this part I did
read the bill like in detail and there's one section and so it's like if you see how Tether
is managing this or not there's a section where it's like if you have over 50 billion in supply
basically you have to open your books you have to report your books every quarter basically
like to the like some official standards so and i guess this directly targeting uh
tenor basically because i'm sure they're not opening their books and also after holding i'm
this this i'm not sure but they have like a section they say you have to hold this and
this kind of things you have to hold to back your um yeah your fiat stable stable coin and basically
i don't see ted of fitting into this and um looking forward what's the move looks like
that will just not be regulated in the us or yeah and other thing to add is what's
very good for us is basically there's a section like two lines basically it's i don't know it's
like definition of asset issuers or like money transmitter license of this and there's like
this line who is especially that protocols on chain protocols
are exempt to don't have to uh to be um yeah compliant basically and also like
develops or works developers who work for this kind of protocols are also like exempt and
i guess that's good for us because it gives us like clarity on the risk they're taking with this kind of technology,
how we do it.
Yeah, that was a great group, both of the speakers.
Yeah, I think the overall, you're never going to like everything in a bill.
But this one, I like quite a lot of it, to be honest.
I think the carve outs for protocols are important
and I'm sure the people at Sky are probably thankful
of that and other places.
Yeah, I think in terms of what it's gonna unlock
is probably massive adoption by a bunch of other finance
related or flat finance adjacent sort of companies.
So I expect like massive adoption by fintechs
once you see this go through.
A lot of institutions are just very hesitant
when there's no guidelines that you can follow.
All the lawyers in the room sort of clamp up
and no one does anything.
But I think that will,
I think it will unlock a lot of growth opportunities.
And yeah, not passing yield back,
I think is again, just very strange.
It does, these kind of
regulations just create really strange incentive structures where of course
like the yields still going to get spent it's just going to get spent
competitively in very different ways now so the stablecoin issuers will you know
the earlier early issues the early adopters were able to profit hugely from
from keeping those you know keeping the yield but i think that
that that there'll be a massive squeeze on that as as competition takes over and they they find
ways to use the use the yield to to grow in other ways and i think that could it's very unpredictable
how they'll do that but i think yeah aggressive marketing or like aggressive like business to
business relationships i don't know it's um It's going to be interesting to see how competition
heats up in the space
as a result of that because it just means
that you'll have probably billions of dollars
a year eventually just funneled into
alternative forms of competition
than benefiting the end
customer directly.
Yeah, I'm sure things are going to get quite
creative in the future.
So it will be really exciting to see.
Speaking of yield sources, over the past several years in DeFi, they've evolved quite dramatically.
We've kind of left the world on chain to seek yield outside exogenously.
I'm curious what you guys think on the future of yield for stable coins and
where you guys see it coming from uh generally speaking you've been seeing more private credit
kind of popped up pop up uh but I'm curious like what what your guys's thoughts on like
stable coin future of yield uh where sources may have not been tapped in yet but like could be
tapped in into the future um yeah I'll let you guys go ahead.
Yeah, I can comment on that.
So yield sources in crypto are still quite small.
So TradFi is definitely the most scalable way to get yield.
But within crypto, we are bit by bit unlocking more scalable sources of yield.
So for Maker, it was historically the CDP style over collateralized
on-chain crypto lending that was the first yield source. But since then, we've had really like in
the past year or two, we've had tokenized treasury bill products coming on chain, largely as a result
of the interest rates going up. This introduced a second scalable yield source.
And the third major one is the centralized exchange funding rates.
A lot of people who are speculating on crypto prices go into these Perps products.
And the scale of centralized exchanges is still an order of magnitude larger than DeFi. So with products like Athena, Spark has been able to tap into these yields more directly.
And then actually, I think a yield source that's been, you know, it's kind of related to the on-chain over collateralized crypto lending,
but it's more like through products like Maple, which have introduced OTC lending for like a bridge from DeFi into CeFi,
so that people can custody Bitcoin.
It's primarily Bitcoin has been the large growth driver there,
and people can take out loans, you know, in their own custodians and stuff like that.
So at Spark, we're really interested in just catering to all these markets, but we've seen a lot of new opportunities growing, especially around Bitcoin, CDFI type stuff.
And yeah, I think in terms of like RWAs, I think the token curve and there's going to be more options. And I think there's going to be a wide diversity of stable coins that emerge that have different collateral portfolios.
Because, you know, not everybody wants to have the same collateral portfolio backing your stable coin.
But really, DeFi is all about transparency and auditability in my mind.
And so giving people, empowering people to make their own choices about
where they want to invest their money and not having these opaque black boxes of the past,
I think is a huge win. And I'm very excited about it. So what do you see as future, like you said,
you said tokenized treasuries, where do you see things going? Like, could you see like corporate
bonds in the future? Could you see real estate just spinning off the top of my head?
Yeah, I mean, corporate debt seems like the next level.
But I think I've used stable coins as like, I mean, they've already established strong
product market fit for crypto.
And you see the bull bear cycle going up and down.
going up and down but stable coins are like kind of just going up and to the right in terms of
But stable coins are kind of just going up and to the right in terms of adoption.
adoption so really i view the stable coins as like the black hole that's dragging everything
uh in onto the blockchain i i do view long term that i think everything will be tokenized just
because of the huge efficiency improvements of using blockchains versus like trad fi like i
don't know maybe people don't experience this but but like TradFi is really, really crazy.
Like it's like people sending around spreadsheets and calling each other and like faxing each other.
Like it's so like T1, T2 settlement, like off turned off on the weekends.
It's so inefficient.
And so really, we just have to get to this inflection point where currently most of the activity, most of the network effects are in TradFi.
But we have to get over this hump. And I've used stable coins as the thing that's
dragging everything on chain so it'll be it's tokenized T-bills corporate debt
but we're just gonna move down the risk curve and just onboard more and more and
stable coins are the way are the black hole that's driving that
Michael Martin yep
yeah I mean I would uh I'm sorry Martin uh yeah I would uh would uh completely echo everything
everything Sam said there really I think uh yeah more and more this is more and more things are
coming on chain and people are getting more and more adventurous and uh you know oiler
recently uh nor the market recently accepted uh you know the tokenized uh t-bill market from
blackrock uh spittle into into one of its markets and i think you'll see more and more lending and
borrowing opportunities for tokenized uh assets on chain uh coming on board this year,
and especially after the regulatory changes that we've seen
and future regulatory changes that might come about after this act.
So, yeah, I just speak to people constantly these days.
I'd say when I first got into the industry,
we were mainly looking at essentially supporting lending
and borrowing facilities so that people could go long
and short volatile crypto assets.
So everything was just incredibly reflective back then.
Market went up and rates would go up and market come down, rates go down.
It's still a little bit like that.
I mean, some of the biggest money markets, still the rates were a little bit out of sync i think with with how things with how efficient they could be you know we saw when there's a little bit of a depression back in january february
i think it was you know the uh supply rates for usdc and tether on a lot of the money markets were
like around two percent which is below the t-bill rate which is just crazy because no matter how
much we all love d5 protocols there's no way that they should be regarded as lower risk, I think, than just
holding parking money and T-bills off-chain. But I think that will change as these assets come on
board and we'll see things like repo facilities emerging or something analogous to a repo facility.
Yeah, and the risk-free rate will then form a baseline for low risk activity on chain. And then as Sam said, there'll be more exotic opportunities for people with a higher risk appetite.
Yeah, I can just add something to the, yeah, the Draft3 basically having, they'd have paper
processes which are like some kind of digitalized but they're not somehow and now
for me blockchain finalized the digitalization is and so it's like the end point of this
and this means the biggest question I have like personally is basically Strykify has
no instant settlement so it's more like agreement based and then you do
settlement so you need less capital basically for this and if you move into
like on-chain everything is yeah it's instant settlement so the capital is
it's more capital intensive basically and the question is can we beat basically
can be as an industry or technology is the benefit you have that you need
more capital you need more capital at the end at the moment you make transactions and
then like in the traditional finance and the question is do the like the efficiency we win can we basically yeah beat that capital
efficiency in the trade basically. This is like the broader like long-term
question I have based. Even I agree that at the end everything will be tokenized. So it's just that it takes a lot of time to go there because if you imagine coming of the world,
they basically use the simulation of a paper process over digital means basically,
and you have this like our world is very very different it takes a lot of time for
like the traditional financial system to come to the conclusion that we are basically the best
solution and not like the pre yeah it's still like very old process there for this
something i've been hearing from everyone here is how everything will be tokenized.
Everything's going to come on chain and be tokenized.
I'm curious, in a future, in a world, when that happens, what are some problems and challenges that may be faced?
For example, everything will be tokenized, but will everything have liquidity?
How do you solve a liquidity problem there?
Have you guys thought about this?
Where do you guys see this going?
Sam, I'll let you go first.
I don't think you get magic new properties
like liquidity just magically appears.
I think liquidity will largely stay the same as TradFi.
What you do get is by you know, by improving settlement,
I think that's a big one, transparency, auditability. I think like one of the big issues
with the global financial crisis that happened in 2008 was largely due to just the opaqueness
of everything. And like there was just no visibility into what this like crazy complex loan structure
like when where the actual like money was going.
And so I think DeFi really brings an advantage here.
Like the way I view the my ideal future is
RWA is there first of all a necessity
because like otherwise you can't really do anything useful in DeFi.
But once you accept that, the market is going to be quite large for RWAs.
But RWAs, I think, should be very simple constructs,
like a tokenized T-bill money market fund.
It represents a commodity like gold or something like that.
But it should be designed to be as simple as possible
at the interface between the real world and the blockchain such and a regulated uh thing so i think regulation in this
sense is quite good to ensure that the company is doing exactly the issuer is doing exactly what they
should do and custodying the assets and the assets are always there but then once you get into the
blockchain land you can have extremely complex loan structures but since it's all live
and on the blockchain you can audit the entire process so like especially with the tools like
ai coming up where you can ask like i'm investing in this thing and there's this complex structure
behind it uh you know what is the actual hard assets that are backing these loans um and so
this i think is going to bring a new level of transparency
to hopefully avoid the type of situation we had in 2008.
Yeah, I have a...
Sorry, Martin, do you want to go?
Yeah, I think that the transparency part is very important
because at the end we have
a 24 hour system and it's very fast.
So if you have like a situation where I have some kind of panic, it can escalate very quickly.
So this is the reason why transparency is needed to see the risk basically because you
don't have like a weekend where you can basically if things blow up
many times like politicians they use like the weekends to fix it or regulators to find solution
on the weekend and this is not it doesn't exist on on chain so this is why i as i think transparency
is important that we will see the system have to be transparent in one way
in another way sometimes I have to feeling transparency so like hindering this because
yeah you don't want to see everything transparent basically if you think in the dreadfy mindset so
you show like who is buying what who is like exposed to what kind of freeze if you more
think about like um a company's owning like things and these other market signals so
transparency yeah it's important because the system is very fast and if it's not transparent
it can crumble very fast but and also i also see that some times because we could discuss that institutions should like move on chain but
this is a world we don't know how trans how transparent it can be and the risk side should
be very transparent but who is holding what and maybe not so it's like the other thing to solve still, I guess.
Yeah, I think the temptation is always to leverage
and leverage is always what breaks the system.
And leverage always seems to find a way.
People always find a way to recolateralize,
repackage up existing products into higher risk ones
and then leverage them.
I think, yeah, DeFi is not a panacea, right?
Like you can today create real world assets,
which are tokenized funds,
where the source of yield in the fund
is complex leverage strategies in DeFi.
And then people are taking those tokenized funds
and using them to leverage them in DeFi.
And so even though d5 a lot of d5 assets
are um are fairly transparent in the sense you know classic crypto assets uh you can kind of
trace on the blockchain and everything when you when you sort of intermingle d5 native assets and
tokenize real world assets there's not always that transparency so it is really important we get
uh you know clarity and regulation and transparency uh on on how these what what these tokenized
assets represent i think it's going to be very easy for people to to um yeah create overly leveraged
uh risk products otherwise um yeah i mean if you look at as well when in 2008 uh when when all the all the
banks started collapsing and the mortgage-backed securities issue when they tried to trace back
and try and trace through like who owed what and uh try and figure out what was collateralizing
what was an absolute mess and it took years to decipher and like teams of hundreds of analysts
to try and you know piece it all back together i think crypto broadly and defy broadly is much better at that because everything's on
chain but as we start to mix in things that aren't fully on chain there's potential for the same
kinds of issues to to start to to rear their head the other thing that um slightly that i would point
out as well is the issue of uh processing liquidations which historically in
DeFi just you know we we take we take your Bitcoin we sell it on the market in some decks and we
uh swap it into dollars and pay back pay back a loan and um yeah I think exchange markets uh
DEXs in particular aren't as maybe as efficient as they are in TradFi,
and that makes it a little bit, puts some pressure on the available liquidity in the system
to be able to process liquidations in the event of cascading liquidations across the entire system.
So I'm not entirely sure how we're going to solve that.
Effectively, there's kind of a fundamental inefficiency there i would say and that extends even more so to to some of the newer
assets as we're talking about you know collateralizing real world assets a lot of them have
facilities for redemptions and things that you can use them as an alternative to to uh you know to
liquidity and dex pools but those redemption facilities aren't always open.
There's sometimes constraints in accessing them for certain types of users and so on.
So yeah, there's a little bit of a disconnect there, I would say, going forward and a problem to solve.
It's not to say that someone won't solve it, though, because I think whoever manages to
solve it, it will be a very lucrative business, essentially acting as a kind of clearinghouse
for the entire on-chain financial system. So yeah, big opportunities, but big risks as well
potentially as things keep growing.
I want to hone in on that point more about liquidations because I've thought about
that too, especially when it comes to liquidity. I'm curious, how do you think we solve it?
This is an open question for everyone
uh if like there isn't enough liquidity on chain there i mean you talk about like redemptions but
then there's issues with like the whole redemption process um like what are like some possible
solutions you guys think are to the liquidation challenges in the future with rwis
yeah i guess yeah sorry i think they have Dreadfire has to be faster basically, because
if you have like a redeem, you can redeem things and it takes you two days.
So I guess we will speed up on the other side.
We need that otherwise.
Yeah.
Yeah, because that's, that's one of the things we we maybe they will have to be faster.
I guess that's the only solution like,
it's going to be a little bit less of these timing risks and make more efficient.
I'd say the traditional method to liquidation is to just, you know,
take collateral,
swap it on a DEX and then repeat a loan.
I think the alternative that most lending protocol support
is to just take the collateral and debt from the borrower
onto somebody else's balance sheet so that they can hold it.
So that you might then, if there's no ability to close out that position
and swap it through some kind of instant redemption, somebody will be there to absorb it, somebody
with a much bigger balance sheet to absorb it and then hold it over the weekend or over
the period in which they can't close it out.
And they would presumably get paid for that service.
But I think that kind of facility is going to become more and more important with some of these assets where there just isn't DEX liquidity
and possibly even for some of the classic DeFi assets as well.
I think we might start to see more the emergence of a new sort of type of active
in the system that plays that role.
It's, yeah, it's not an easy solution here, short of paying people
to supply massive amounts of liquidity to DEXs,
but we just know fundamentally that DEX liquidity
is fairly inefficiently used.
You know, that's one of the reasons why we've been working on EulerSwap
and trying to create something more efficient,
but solutions like the one we've just bought online with EulerSwap
kind of make the problem a little bit worse in terms of liquidity
because they arguably make it even less appealing to supply DEX liquidity
than people used to.
So, yeah, efficiency always reshapes the market
towards more efficient setups,
and sometimes those just happen to be more centralized.
And I wouldn't be that surprised to see specialist actors
emerging to play the role of liquidator
more broadly in the systems.
Yeah, I mean, liquidations are by far the most complex piece
of any lending because you have to be sure
that you can get the capital back somehow. So, right, so far we've had pretty simplistic liquidations, you know,
just basically fire selling the asset when it breaks liquidation threshold.
But this sort of thing, I think, is like as we get more different structures,
especially with RWAs, I mean, you can't just speak broadly about like all the RWAs. I mean, you can't just speak broadly about all the RWAs. You have to really know
what the asset is in order to break down how the liquidation process should work.
But I think I agree with both of my co-panelists that, yeah, there's going to be more exotic
structures, probably more mirroring what TradFi does, where, yeah, somebody transfers it onto
their balance sheet who's you know going to be
collecting the debt and uh this is just yeah this is gonna there's gonna be more options
that become available and this will be big business big opportunity
well that but maybe that's naive but maybe a little bit naive so regulation maybe can help in this because what we did see is in
a sense on chain like if you look at the assets every or tokens every token is like different
very different and so it's very difficult to to compare them and you have to build basically for
every assets you have to build yeah your own mind model and also technology wise some of them you have to adopt to like every one like special solutions or like every asset and maybe if you have more regulatory clarity on some like side how we interact with like the threat fiber from on chain it will help that some of the products we build on on-chain
maybe have more like a clear interface how you basically interact with them and
maybe rules how they have to be that they are like allowed basically to be on-chain
or maybe this kind of thing so maybe a close regulation can help in the sense that you
don't have a circus of very different standards and variations of of assets so you have more like unified assets who everyone is like can like rely to and then it's also more easy to get like things
adopted but i don't see it you know it's not, it's like it takes another maybe five to 10 years.
Can you see this kind of more like standardization,
I guess, who is like maybe better suited
for the on-chain world?
Or do you see anything in this?
Thank you guys.
Switching gears a bit,
something that has been popping up has been these new tether chains. That's what I call them. There's Plasma that came out that was announced.
It looks like they're doing an ICO on Sonar, which is Kobe's Echo's new ICO platform.
And then today, just today, I'm seeing this right now,
there's something called Stable, like literally at Stable,
which is backed by Bitfinex, which is creating another tether chain.
I guess, like, what is everyone's thoughts on these, like,
tether chains that are coming out, like Plasma, Stable?
Yeah.
Sam, let's you start.
Yeah, I think it's great.
We're pretty agnostic at Spark.
So we look at all these chains and we see who's finding product market fit. And then we're happy to add our bridge support and then have a savings product on top of that for either USDC or USCT.
savings product on top of that for either USDC or USDT. So historically we haven't really supported
Tether as much but actually that's changed more recently. We have USDT on Ethereum on our balance
sheet now and we're looking to actively grow this so that we can have better support for
users who are using Tether, you know on Plasma or whichever chain they want to use.
We want the savings product to be available there so that people have, you know, they do payments
and whatever and they have their idle capital can always be resting in a yield bearing stablecoin.
So they're maximizing their capital. So yeah, I mean, I'm always pro innovation growing the pie.
And so I'm happy to see all of these initiatives.
That makes totally sense to make like stable coin focused
chains, but at the end it's like, yeah, the big bet is,
you know, of course, if it's like a chain by made
and created by or invested by Tether, it will only have like USDT on it.
So it's a question where's the usability at the end if you only have one token as a thinking exchange sense.
But for having like your own chain for payment, yeah, it's like it's like it's the move to do basically.
Because why shouldn't you have your own,
it's a strong use case is like stable coins.
And why you should use that use case
and have basically your own chains that you are basically there.
And they don't own it,
but it's like you have heavy influence on the chain.
So this is like, I think it's positive at the end so because
it's also risk reducing for them basically because now yeah i guess not more many
usc is heavily on uh tron and uh somehow they control the stack more they also have like
They control the stack more, they also have less risk reputation based,
this kind of more like non-tech risk.
Yeah, I think I can definitely see why everyone's trying it.
There's obviously a massive opportunity here to be captured.
I can't see a world in which there are hundreds of chains in the future,
to be perfectly honest. I don't think that's remotely sustainable um so yeah i
think we'll see a proliferation now and then the market will uh will pick and choose the ones that
that succeed and there'll be some big winners in the future but a lot of losers too um yeah i think So, yeah, I think chains need to be probably,
I can see that there's the appeal to own the entire stack,
know the network, but I think if you really want vibrant markets and lots of activity, it's important to be neutral.
And like Sam, Euler, we're fairly agnostic about chains that we go to
and we expect chains that we go to to be fairly neutral
with respect to how they treat the assets that are issued there
and the types of people that build on the networks and so on.
Otherwise, you're just going to end up with, yeah,
I think a single chain with a single issuer
with a couple of protocols. it's not clear to me
what's the real innovation there in the long run
and whether that's going to be super appealing for most people.
I think what's incredible about Ethereum is that
it's got this massively diverse ecosystem
with all sorts of opportunities.
I think if you, yeah, if you started having same creators king making certain assets and king making certain protocols,
I think it might work in the short term.
I think in the long run it's just not going to be appealing for people.
So yeah, interesting to see how all these guys approach it. I'm not surprised to see it, and hopefully we'll see Euler
helping build infrastructure on a lot of these places soon.
Yeah, and thank you guys for all that.
I have one or two more questions.
Something I want to talk about now is go go to markets for stable coins uh over like
the past year a little bit and change uh we've seen the points meta uh really be used but I feel
like now farmers are exhausted um people are and people still speculating points and points are so
like uh an essential point a part of a lot of, not just stablecoin go-to-markets,
but a lot of protocols go-to-markets.
So I'm curious, what do you guys think of the points meta?
Do you think it's over?
Do you think points can be improved?
What are your guys' thoughts on points and go-to-markets,
especially for stablecoins?
Yeah, so I don't think Points is quite done yet.
It's actually a pretty interesting technique.
I think like bootstrapping protocols with rewards in general is here to stay.
It's a pretty good technique for just kind of getting the kickstart.
Otherwise, I mean, there's otherwise this is cold start problem.
And so Points is just like the latest iteration of that. And it's quite useful for in this sense versus the more direct token rewards, especially with the on-chain distribution can usually be gamed a lot more.
So it just gives you a lot more flexibility, I think, with the points. So I definitely think it's here to stay, at least for now. With regards to your stable coins, I think there's a lot of, I mean, with the success of Tether, you know, everybody's looking at what a great business it is.
You know, there's it's like the most profitable company on earth per employee.
So like naturally, everybody's OK, I want to get in on this game.
But the problem is, is like I'm just extremely bearish on new entrants into the
space. Like it's really because like Tether was first and they've done such a good job that they're
able to have this network effects, but the network effects are extremely hard to overcome. So until
there's like some, maybe some like major player in a more traditional, like FinTech or something
like that can maybe do it. But I'm, to be honest, I'm pretty bearish on all these new entrants
that are just like, yeah, I'll forward the yield in some capacity.
I think it's great, but yield is not enough.
It's a really hard battle.
I really dislike points.
I would say I hate them. I think I agree with Sam, I can see
why projects like them, but I feel like they're a residual artifact of the regulatory environment
that people were building in for the past few years, where there was a kind of weak-wink
sort of approach to things, be like, oh oh it's just points but but everyone really knows
what's going on i think that was just a yeah this regulatory arbitrage approach used to to provide
incentives i think they're horrible for lots of reasons like no one knows what they're worth
they have absolutely the the yeah they get issued at will switched off at will they're very hard to
integrate uh we have you know everybody has a different type of integration process,
so there's no standardization or interface for builders,
which means that they get lost, they get misintegrated,
people get confused all the time.
So I think they're really, yeah, I can see why they existed.
I think they served their time, but I really do hope
they get replaced with something better.
Honestly, I like token incentives.
That's one thing that tokens are very good at,
is they all have a nice standardized interface for the most part.
There are lots of systems for distributing them.
Incentives are good.
Token incentives are great.
Points are garbage, in my opinion.
I don't like the points too much but what I see in points that it very depends when you
enter the market. So if you have a new stablecoin project and you want to basically build up
liquidity and you enter market like in a more bare, then it's easy. Yeah, you don't have to pay that much for your liquidity.
But as soon as the market is going to bullish scenario,
the liquidity cost is going up substantially.
And I guess this one, yeah, it's not good for the growth of the system
that it's so cyclic and what you can do with points in this sense,
if everyone is going into bullish territory and thinking bullish, then the points have imagine a high value.
So it's like it's adopting, it's much more adopting to this cyclic nature than like tokens, because tokens, yeah, they have a real price, most of them. And some of them, they, how I say,
even if you go in a bullish scenario, they have like a lot of pressure, sales pressure.
So they are more, they more adjust to the, to the environment or the current sentiment,
basically the points than, than token i guess that's that's the benefit
of this so i don't think it's it's not that it will it will not die out you know it will be there
for about basically i guess and for the ones who are more on speculative side anyway, they don't optimize for like,
yeah, to have like, they still hope to hit the big pot
basically and the points, you can have just more
imaginary value, maybe so.
Yeah.
And it's simple, they are very simple, basically.
Even more simple than like a token.
You're having a token reward on a wall.
Also like management basically.
It's just a sheet from there where you quickly tell people how much they will get some point maybe.
point, maybe.
Yeah, I've been looking into points more recently.
And my whole take with it is as long as you give enough information where like
analysts and people can do forecasts on them, not too much, but not too little,
but like just enough for them to forecast, I think points are actually fine.
And they should really award complex actions because those are like the kind of users you want
to incentivize in your protocol or whatever you're building um people that are going to stick around
and do the work uh but that's that's been my points research as of recently i feel like that's that's
the big issue is that they it's very hard to understand how much they're worth and so they
what ends up happening is you end up favoring extremely skilled
and mercenaries with large amounts of capital who come in and then they,
they kind of get redistributed via Pendle and other,
other protocols in that sense. And that's where people like start to be able to
value, value the yield a little bit more.
It's when there's like a more vibrant secondary market for them,
but without a secondary market, it's just what's like a more vibrant secondary market for them but without a secondary market it's just what's the point like they're all never got like this is ridiculous
uh you know total supply or there's not even a total supply in any case so yeah you just you
have no idea how many points are out there what yours are worth uh whether the the numbers you
know good or bad relative to what's happening on other protocols and so on so it's just massive
lack of transparency makes them very hard to work with for everybody, I think.
Yeah, but for the mercenary capital, like that's true of token rewards as well.
And that's just kind of, you know, the nature of the space maturing.
Yeah, I think, I mean, the mercenary capital always find a way,
but I feel like it's even worse for points just because there's even less,
there's just more information asymmetry there at least with token incentives there's you can
just kind of go to the secondary market see what they're trading at check the liquidity and so on
you can come with your own valuation but the the really big mercenaries are able to value the
points much more effectively than your average average jo I think. And that's the problem.
The information asymmetry makes them less valuable,
but more able to reward your mercenaries
rather than real users.
All right.
And on that note, I think we're ready to wrap up. Does anybody have any final
words or anything they want to plug? Feel free to share now.
I have one thing and this is what's like the timing of circle and this like regulation in the US.
For me, like as a guy of Europe, basically, what we did see, what we now see is that
exactly the same time you get regulatory clarity.
It looks like the US dollar is under pressure, basically.
So everyone is like thinking, yeah, it was like for myself was like, okay, we go into hyper-dollarization basically.
But now for me change, you know, what's stablecoin and if you talk stablecoin now, we always assume that we mostly talk about US dollar stablecoin.
And biggest question I have for like what the future brings in this, do we see more adoption for non-US dollar stablecoins?
Because I guess we see more like inflation in the US in the future and
yeah this is like the other stablecoin market which I don't see but we would
like to have like more like also of the US stablecoins.
I think we'll see how this will develop.
Michael, Sam, feel free to...
If you have any last words or want to plug anything, feel free.
No, I mean, I'm good.
Like I would just say stable coins are one of the clear product market fits for crypto.
And so I think, or I hope like we all just continue to double down on this success case
and promoting it.
And yeah, I'm just very optimistic about the future of blockchains.
about the future of blockchains.
Yeah, I think a very quick plug for a new protocol
we launched on the swap,
which is relevant to this discussion.
It's a new swapping protocol,
but on top of Euler that allows you to trade assets
in particular, allows you to create greater depth
for stable coin markets, I think.
So yeah, if anybody's interested, wants to learn more about EulerSwap, get in touch.
Love to tell you more and hopefully we'll see some more stablecoin pools
blended with lending markets launching in the near future.
All right. And I'm DeFi Dave.
When I'm not moderating spaces and panels, I'm working on growing CAP.
We're a stable coin that uses restaking as a primitive to secure yield and protect backing.
We're coming out soon, CM.
So make sure you follow CAP.
Make sure you follow Stable Summit.
Remember, in Khan, we have Stable Summit coming up.
It's probably the best side event of the week.
So you definitely want to sign up for that. thank you michael sam martin for coming on
all true ogs that i've been building through thick and thin in the space uh and really an exciting
time for stable coins uh really an exciting time to be in defy i feel like we really haven't just
we've we did all the groundwork uh in the the world on chain over the past five years or so.
And now with TratFi coming online to access everything, I don't think there's a better place to be in crypto.
So thank you so much for everyone for joining.
We'll see you next time.
Stablecoins.
Yeah, thanks guys.
Thank you. Bye.
Thanks, everyone.
