Stable Coin is the future of the industry! Analysis of "seven key indicators", who is the real winner?

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With the continuous development of the stablecoin ecosystem, the market's attention to its future development direction and value distribution is increasing day by day. This article will analyze in depth the various tracks and value potentials of the stablecoin market from multiple dimensions.

Compared to the traditional framework, this analysis adopts a more detailed classification method, which stems from the complexity and subtle differences of the payment industry itself. For investors, accurately grasping the role positioning and ownership structure of each participant is particularly important. The main categories include:

Settlement Rails

Stablecoin issuer

Liquidity Provider

Value Transfer / Currency Service

Aggregated API/Message Delivery Platform

Merchant Gateway

Stablecoin-driven applications

Some may ask: why do we need so many categories, especially without covering core infrastructure such as wallets or third-party compliance? This is because each industry has its unique defense "moat" and different ways of value acquisition. Although there is overlap between suppliers, it is crucial to understand the uniqueness of each level. The following is an analysis of the value distribution in each industry.

1. Settlement track

This is a typical industry dominated by network effects, and the core competitiveness is reflected in:

Deep Liquidity

Low fee structure

Quick Settlement

Stable system availability

Native compliance and privacy protection

This is likely to form a winner-takes-all market. General-purpose blockchains may not meet the scalability requirements of mainstream payment networks. Layer 2 or dedicated solutions may be more promising. The winner in this industry will be very valuable and may focus on stable coins/payment industry.

2. Stablecoin Issuer

Currently, issuers like Circle and Tether have achieved significant success with their strong network effects and high interest rate environment. However, future development requires:

Building efficient and reliable infrastructure

Improve compliance standards

Optimize Casting/Redemption Process

Strengthen integration with central banks and core banking systems

Improve overall liquidity (e.g., Agora)

Although SaaS models like Paxos may give rise to more competitors, stablecoins issued by neutral non-bank institutions and financial technology may have more advantages because transactions between closed systems require a trusted neutral third party. Issuers already have a significant value, and some issuers will continue to dominate, but they need to develop more comprehensive businesses, not just issuance.

3. Liquidity Providers (LPs)

Currently, it is mainly dominated by OTC and exchanges, presenting highly commercialized characteristics. The main competitive advantages rely on:

Low-cost funding acquisition

System Stability

Deep liquidity and trading pair support

Long term, large institutions will dominate the market, making it difficult for LPs focused on stablecoins to establish a lasting advantage.

4. Value transfer / currency service (Stablecoin's 'PSPs')

The moat of such 'stablecoin arrangement' platforms (such as Bridge and Conduit) comes from:

Exclusive payment track

Direct bank partnership

Global coverage ability

Sufficient liquidity

High-level compliance capability

There are few platforms that truly have proprietary infrastructure, but successful ones are expected to form an oligopoly in regional markets and complement traditional PSPs (Payment Service Providers) to become very large enterprises.

5. Aggregated API/Message Delivery Platform

These types of market participants often claim to provide the same services as Payment Service Providers (PSPs), but in reality, they are only packaging and aggregating APIs. These platforms do not take on regulatory risks or operational risks. More accurately, they should be seen as market platforms for PSPs and Liquidity Providers (LPs).

Although these platforms are currently able to charge higher service fees, they will ultimately face the risk of compressed profits or even complete elimination due to their failure to truly address the core difficulties in the payment process or participate in infrastructure construction. These platforms often label themselves as the "Plaid of the stablecoin industry," but overlook a key fact: blockchain technology itself has already solved most of the pain points solved by Plaid in the traditional banking and payment industry. Unless they can expand functionality towards end users and take on more responsibility in the technical stack, it will be difficult for them to maintain their profit margins and business sustainability.

6. Merchant Gateway/Entrance

These platforms help merchants and businesses accept stablecoins or cryptocurrencies as payment. Although there is sometimes overlap with PSPs, they primarily focus on providing convenient developer tools while integrating third-party compliance and payment infrastructure, packaged into a user-friendly interface. They hope to emulate Stripe's development path - gaining market access through an easy integration method and then expanding horizontally with functional business.

However, unlike Stripe's early market environment, developer-friendly payment solutions are now everywhere, and channel distribution capabilities are the key to success. Existing payment giants can easily cooperate with payment aggregation companies to add stablecoin payment options, making it difficult for pure cryptocurrency gateways to find their market positioning. Although companies like Moonpay or Transak have had strong pricing power in the past, this advantage is expected to be difficult to sustain.

In the B2B industry, there are still opportunities, especially in large-scale fund management and the application of stablecoins, but the B2C industry is fiercely competitive and faces severe challenges.

7. Stablecoin-driven Financial Technology and Applications

Creating a 'digital bank' or 'fintech' product based on stablecoins is now easier than ever, making the competition in the industry exceptionally fierce. Success will depend on distribution capabilities, marketing strategies, and differentiated product insights—no different from traditional fintech.

In developed markets, traditional fintech giants like Nubank, Robinhood, and Revolut can easily integrate stablecoin functionality, while startups need to find unique value propositions.

In emerging markets, there may still be opportunities for some unique products (such as Zarpay), but it is difficult to succeed in developed markets by relying solely on stablecoin-supported financial services as a differentiating advantage.

Overall, consumer startups in this category of pure cryptocurrencies/stablecoins may face extremely high failure rates and ongoing challenges. However, enterprise-focused businesses may still have opportunities to find their niche market.

Conclusion

Although this framework does not cover all edge cases and overlapping industries, it provides a useful thinking framework for investors deeply involved in this industry. As the market continues to evolve, new opportunities and challenges will continue to emerge, and understanding these market dynamics is crucial for industry participants.

【Disclaimer】There are risks in the market, and investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investing based on this is at your own risk.

This article is authorized to be reproduced from: "PANews".

Original author: Rob Hadick, Dragonfly General Partner

"Stablecoins are the future of the industry! Analyzing the 'seven key indicators,' who is the real winner?" This article was first published in "Crypto City"