The stablecoin bubble will probably look a lot like the L2 bubble.
Many companies will chase the “free money” opportunity to launch a stablecoin and we’ll end up with dozens.
Biggest difference to L2s is that there’s limited ways to “farm” adoption, subject to the GENIUS Act.
Large financial institutions’ stables will get traction through brand recognition (think Base L2 growth driven by Coinbase brand without having a farming program).
Incumbents like USDC will have an audience.
But most new stablecoins will fail to scale.
They’ll try different narratives, but the stablecoin market will become so saturated that “technological advantages” like being on a faster or better side chain will be irrelevant.
USD1 will carve out a niche for crypto natives by using WLFI tokens to fuel an adoption flywheel. A portion of the returns on USD1’s underlying fund portfolio will likely be allocated to WLFI via a buy and burn mechanism.
The “free money opportunity” for financial institutions will drive exponential growth of stablecoin adoption that will shock crypto natives, with Ethereum as the critical, unifying infrastructure for the financial system of tomorrow.
And solana will have some good shitcoins.
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