I hope all 7975 of you are having a great week so far 🔥
If you're enjoying my writing, please share Terminally Onchain with your friends in Crypto and join the /toc channel on Farcaster 🤝
Sections Below
Good software takes 10 years
Stablecoin framework
Stablecoin resources (metrics & key links)
Let's dive in 🚀
Good Software takes 10 years
In July 2001, Joel Spolsky (co-founder of Stack Overflow) wrote a blog post titled Good Software takes 10 years. In it, he discusses a few problems many early internet entrepreneurs were falling for such as believing in Internet Time and suffering from the Get big fast syndrome. At a high level, these mistakes he highlighted honed in on the misconception that because it's easier to ship software quickly, these companies will get big and go mainstream faster.
"This is a chart showing the number of installed seats of the Lotus Notes workgroup software, from the time it was introduced in 1989 through 2000...from the first line of code written in 1984 until the hockey-stick part of the curve where things really started to turn up, about 11 years passed."
The reason I'm bringing Joel's article up is because I saw this tweet exchange between Brian Armstrong and Jeremey Allaire (founder of Circle) yesterday.
In it, both CEOs discuss how stablecoins & payments are just now finding their footing after starting on that journey 10 years ago. Remember, Tether, the first and most dominant stablecoin, launched back in 2014. And Circle started in 2013 and ended up launching USDC in 2018.
This felt similar to the same concept above in Joel's essay - the case for stablecoins has always been straightforward and probably one of the easiest applications to explain...borderless, permissionless, scalable, etc. But as Brian mentioned in his tweet, the UX & infra was simply not there for the product to realistically go mainstream.
The last decade started with Realcoin (what Tether initially was), involved major scandals from Tether's parent company iFinex, a slow adoption curve for USDC due to U.S. regulations, issues with Ethereum gas fees, complicated wallet onboarding, and much more. But still, the crypto industry relentlessly cranked along trying to fix one thing at a time.
"Anyway, getting good software over the course of 10 years assumes that for at least 8 of those years, you’re getting good feedback from your customers, and good innovations from your competitors that you can copy, and good ideas from all the people that come to work for you because they believe that your version 1.0 is promising." - Joel
But now...after 10 years of development, iteration, back and forth with governments, etc. stablecoins are finally seeing integration into a variety of people's lives in a meaningful way.
In fact, this week was a big win for the industry as stablecoins hit a new market cap all time high of $168.4 billion 🥳
Total stablecoin market cap, excluding algorithmic stables, is now at the highest point ever, surpassing its previous high from early 2022.
New money is entering crypto.
501
In the bear market these past two years, one thing has become increasingly clear: stablecoin usage is continuously growing regardless of how the rest of the crypto industry is performing.
What has been arguably the most "safe & boring" software innovation in crypto since Ethereum launched is now becoming the goto narrative for crypto's high utility use case.
For that reason, I thought it would be smart to put together a quick framework on how I'm thinking about stablecoins as well as a cheat sheet of resources I've found in the last few days to help give all of you a pulse check on stablecoins.
Stablecoin Framework
For stablecoins, it's best to think of adoption as a two-pronged approach. Both paths are providing high utility in their own ways.
Finance
On the financial side, countries such as Turkey, Argentina, & Venezuela are leading the way by using stablecoins to bypass currency exchange limits and keep the value of their hard earned savings. It also becomes 10x easier to send money to family members in developing countries. People can do so on demand without having to worry about exorbitant fees.
"in Latin America, stable cryptocurrencies play a more dominant role in transaction volume, exceeding 60% in most countries. In Argentina, for example, 80% of crypto purchases in exchanges during 2023 corresponded to stablecoins." - Lemon State of Crypto in Latam
If you're interested, the Daimo team did an interesting case study in Istanbul where they went around the city to several exchanges & merchants to better understand payment processes and stablecoin adoption in a country plagued with hyperinflation.
This thread by Artemis also has examples of stablecoin uses that many of us in America and Europe still probably have a tough time grasping.
We spoke with a user in Lebanon who gets paid and saves ENTIRELY in crypto and stablecoins.
He mentioned merchants ONLY accept in USD as the LBP inflation rate >100%.
Issue: user was crypto native and worries lack of trust + complexity will hold people back.
Other examples are paying out bounties to folks not in the same country as you. I've personally enjoyed the beauty of this use case twice in the last few months. Once, when I worked with @yesyes for a Dune bounty and another where I made weekly payments to a developer in India with USDC.
A new resource I came across today was a map of coffee shops around the US where you can use USDC to pay! This map makes it so clear as to how early we are to all this - it'll be so exciting to see the number of stores that pop up as it becomes easier for merchants to onboard as well.
In fact the site also has a "free starter kit" to help stores get started.
One last thing to mention here in terms of stablecoin payments infra changing is Apple's recent announcement that they're opening up NFC transactions which will enable "tap to pay with USDC". Jeremy Allaire gives details in this post about how he thinks it will play out any why wallet providers need to implement this asap.
Lots of chatter and questions about my tweet. A bit more clarity so that people don't make this into something it is not. Why is tap to pay using USDC on iPhones incoming soon, and what does it mean for Wallet devs to get going?
- Circle has…
Tech
And on the technology side, it's a matter of using stablecoin and blockchain payment infrastructure to enhance the products we have today.
I enjoyed this section from a recent post by Gaby and Bridget discussing how Polymarket (which uses USDC) is a perfect example of this:
Another example I noticed was just announced yesterday by the Merkle team. They introduced $5 daily payouts to the top 100 creators as an experiment to increase quality content on the platform.
I made this cast earlier today - truly amazing when you compare it to traditional creator funds.
And the last news I wanted to mention was the fact that PayPal's stablecoin PYUSD hit a $1 billion market cap. This emphasizes the fact that even legacy, traditional finance players are also realizing the importance of stablecoins in their own infra. The amount of overhead this saves fintech companies we all know such as PayPal and Stripe is still yet to be truly discovered in the coming years.
"PYUSD is the only stablecoin integrated into PayPal’s payment systems. This integration makes it accessible to a vast and expanding network of developers, wallets, and Web3 applications. PayPal has designed PYUSD for seamless onboarding by cryptocurrency exchanges, further expanding its utility in the digital economy." - Yahoo News
Note: I haven't gotten a chance to dive deeper into tradfi <> stablecoins or even PYUSD itself, but will definitely do that in a later blog post.
Resources
Metrics
Links
Companies to keep an eye on: Bridge (Stablecoin API) & Sling (sending stablecoins)
Chainalysis Deep dive on stablecoin usage in Argentina & Venezuela
That's all for today's post!
Feel free to post any interesting metrics or resources on stablecoins in the TOC channel! If you have points to make on the framework above, I'd love to hear them.
See you all on Friday, hope everyone has a great rest of the week :)
- YB
In case you missed it...
My last post sent out on Friday covered the new X-crossposting experiment on Farcaster. Here's a quick blurb:
If this crossposting experiment is able to work itself out in the next few months, it could be a huge unlock to bring a wider variety of content and people to Farcaster...not just from Twitter but even other social platforms 👀
My point remains no matter if it's Reddit, Instagram, or Twitter: the goal should be to work with the microinfluencers for crossposting. They can be trusted to bring quality content and are hungry to expand their networks, engage with new people, and create meaningful conversation around their brand. It's tough for the big guys to stick around no matter how much they want to support.
You can check out the full post here!
