Author: Raymond Yuan
SINGAPORE, Aug. 13, 2024 -- Stablecoins have been in existence for over a decade, but their prominence surged after 2017 when governments worldwide started restricting or even shutting down fiat-to-Bitcoin trading channels. Since then, stablecoins have consistently acted as a crucial bridge between fiat currencies and cryptocurrencies. Today, with daily trading volumes approaching $100 billion, stablecoin pairs make up over 80% of the market's activity, far outpacing fiat-to-crypto trading volumes.
As the benefits of stablecoins—like anonymous transfers, low transaction fees, rapid processing, irreversibility, and 24/7 global peer-to-peer transactions—become more widely recognized, these digital assets are increasingly being integrated into everyday payment scenarios, broadening their range of use cases. However, despite these advancements, the stablecoin products available today still face several critical limitations that impede their growth and broader adoption.
The Stablecoin Conundrum: Tackling Key Challenges
- Lack of User Incentives: Most leading stablecoins in the market today offer little to no incentives for users, with issuers and operators capturing all the profits. Consequently, when customers hold funds in stablecoins, they miss out on earning basic, risk-free returns. During periods of high interest rates and subdued market activity, users are less inclined to retain stablecoins, resulting in significant outflows. While users can generate returns by lending stablecoins or engaging in high-risk investments, they must assume additional risk to do so. To sustain stablecoin circulation growth and compete effectively with traditional payment wallets and demand deposits, there must be enhanced incentives to retain customers and foster loyalty.
- Lack of Community Governance and Transparency: As a blockchain-based product within the Web3 ecosystem, stablecoins should more closely adhere to the fundamental principles of this space—specifically by introducing community governance and utilizing on-chain asset proofs to increase transparency. Currently, the success of stablecoins is largely dependent on the integrity, discipline, and decision-making of the management team. However, without community governance, this control remains highly centralized, leaving the management team vulnerable to the temptation of pursuing higher returns by taking on excessive risks. Moreover, relying on traditional auditing firms for verification is inconsistent with Web3 principles. Many large-scale financial collapses have been caused by the failures of conventional auditing practices. In the digital future, trust must be grounded in the reliability of technology and established rules, rather than the ethics of individuals or institutions.
- Lack of User-Friendly Interfaces and Convenient Access to Funds: A straightforward street survey of 100 adults on their use of cash, bank cards, mobile payments, and stablecoins would likely show that stablecoin payments are still in their early stages. Despite their growth, stablecoins have a relatively small user base compared to traditional payment methods, and their adoption remains limited. Many potential users are unaware of how to easily and affordably acquire and redeem stablecoins. To advance stablecoin payments, expanding the user base is crucial. Currently, most stablecoin transactions rely on over-the-counter (OTC) trades, which not only facilitate fraud but also restrict legitimate use. For stablecoins to succeed, they need to establish more accessible distribution and exchange channels. This underscores the need for improved education and more efficient infrastructure.
- Lack of Diversified Product Lines, Use Cases, and Value Ecosystems: Most stablecoins today are limited to a single product line, and many do not provide their own wallets. This creates challenges for new users, who must navigate issues such as seeds, gas fees, and cross-chain transactions. Institutional users face additional hurdles, including inadequate support for stablecoin custody and internal transfer approvals, which often forces them to build their own infrastructure from scratch. Furthermore, the lack of diverse use cases means that many users see stablecoins primarily as a medium for value transfer, rather than holding them long-term. This results in a really short value chain, requiring frequent switching between stablecoins and fiat currencies to meet various needs. A more robust value ecosystem is essential to address these issues and support sustained use and adoption.
WSPN: Crafting Stablecoin 2.0
WSPN (Worldwide Stablecoin Payment Network) is at the forefront of crafting Stablecoin 2.0, setting the standard for the next generation of stablecoins. Our mission is to design and develop infrastructure that embodies the essence of Web3, with a focus on enhancing the robustness and transparency of stablecoin systems. We emphasize user and community engagement, striving to offer a diverse range of products and expand use cases. By integrating stablecoins into more real-world applications, we aim to serve a broader audience and scale to a billion users. Our vision is to revolutionize digital payments, positioning stablecoins as the leading payment method in the future digital economy.
- From the People, For the People: WSPN will introduce its own governance token to incentivize users by sharing the ecosystem's value with them, making them the primary beneficiaries of this infrastructure. True infrastructure "comes from the people, serves the people," and should not solely cater to the profit ambitions of a few. Any value system that fails to prioritize user value and incentives at its core is ultimately destined to be abandoned by its users. Unlike many stablecoins that simply distribute interest from underlying assets, WSPN's governance tokens allow users to share in the ecosystem's long-term value, liberating them from the limitations of fluctuating LPR. Over time, this approach will cultivate a strong sense of ownership among users, ensuring that the infrastructure remains community-driven and user-focused.
- By the Community, For the Community: WSPN will adopt community governance, empowering governance token holders to participate in on-chain voting. The goal is to shift from traditional corporate governance to a truly community-driven model. As a blockchain-based infrastructure, stablecoins must align more closely with Web3 principles. Decisions about the allocation of underlying assets should be made collectively by the community, which will vote on various risk/reward proposals. These decisions will be transparently recorded on the blockchain, enabling real-time on-chain asset verification and eliminating dependence on any single audit firm. Community governance seeks to build trust rooted in technology and rules, rather than in individuals or institutions.
- Empowering User Accessibility, Redefining Payment Systems: WSPN will dramatically enhance user interfaces, reduce entry barriers, and streamline the process for users to freely access and withdraw funds. The future of stablecoins must prioritize maximum accessibility, enabling both individual and institutional users to transition to stablecoin usage at a lower cost. It's essential to understand that stablecoins should not be confined to the niche of crypto asset trading. Their primary mission should be to upgrade existing electronic payment systems, and even settlement and clearing processes. This means shifting from traditional bank transfers based on electronic ledgers to blockchain-based transfers on distributed ledgers. While stablecoin payment networks will coexist with traditional payment and settlement/clearing systems for some time, stablecoin payments are poised to gradually encroach on the market share of current electronic payment methods. In doing so, they will better serve the digital and intelligent economy of the AI era, laying the foundation for the next-generation global digital payment network.
- Building Value Ecosystem, Expanding Use Cases: WSPN is committed to developing a comprehensive product line, fostering a thriving value ecosystem, and creating diverse use cases for stablecoins. The future of stablecoins should empower users to manage a wide array of asset allocations, from stocks and gold to oil and commodity trading, enabling the purchase of any freely tradable asset worldwide. Stablecoins should also seamlessly integrate into everyday spending, whether it's for public transportation, convenience store purchases, or shopping mall transactions. Moreover, stablecoins should provide multiple income streams, allowing users to maximize their financial potential—whether through holding stablecoins, lending, or wealth management—without the need for constant conversion between fiat and stablecoins. As a pivotal tool in open finance, stablecoins should aim to build a more vibrant value ecosystem, drawing in more participants to engage in various roles within this evolving financial landscape.
Stablecoin 2.0: A New Era of Globalization Through Digital Technology
Throughout history, technological advancements have continuously expanded our possibilities, revolutionizing international communication and commerce. We are now on the brink of a transformative wave of globalization, propelled by digital innovation. In this evolving landscape, stablecoin 2.0 emerges as a powerful catalyst, ushering in a new era of digital interconnectedness. As we step into this promising future, brimming with limitless potential, stablecoin 2.0 stands at the forefront, guiding us toward a world of unprecedented opportunity and progress.
About WSPN
WSPN is a global digital payments company utilizing Distributed Ledger Technology ("DLT") to provide transparent, fast, and efficient payment solutions. Their flagship product, WUSD stablecoin, is pegged 1:1 to the U.S. Dollar and aims to optimize secure and licensed digital payments for Web3 users. WUSD is currently available on more than 30 exchanges, including industry leaders such as Bitget and MEXC Global, and across major blockchains including Ethereum, Solana, Polygon, BSC, Arbitrum and Base. This broad accessibility makes WUSD one of the most readily available stablecoins in the market today.
Learn more: www.wspn.io | X | LinkedIn
Photo - https://mma.prnewswire.com/media/2480981/Stablecoin_2_0_pic.jpg
Logo - https://mma.prnewswire.com/media/2429245/4857202/WSPN_logo_Logo.jpg
Previous
Leave a reply: