Author: The DeFi Investor
Translated by: TechFlow
A few months ago, the cryptocurrency community was focused on discussing meme coins and celebrity coins, with many enthusiastic about speculating on the next investment. However, the focus has quietly shifted. Stablecoins and Real World Assets (RWA) have become the core topics of industry discussion.
Image source: Kaito
Stablecoins are showing tremendous development potential and are expected to become a trillion-dollar market in the future. In this article, I will share why I am optimistic about the stablecoin sector and explore how to seize the market's growth opportunities.
Why are stablecoins promising?
Currently, the stablecoin sector is experiencing a series of favorable factors:
More Friendly Regulatory Environment
The Trump administration plans to pass stablecoin-related legislation before August and hopes to further consolidate the US dollar's global dominance. This will pave the way for stablecoins' legalization and popularization.
Traditional Financial Giants Entering the Market
Fidelity, with global asset management of $6 trillion, announced this week the launch of its own stablecoin. This marks a significant recognition from traditional financial institutions and injects confidence into the stablecoin market.
High-Yield Stablecoin Products
Some interest-bearing stablecoins offer highly attractive annual yields through decentralized applications (dApps), which can reach 20%-30%. These products not only attract crypto investors but are also beginning to draw attention from the traditional financial sector.
Moreover, stablecoins have significant advantages in cross-border payments. Traditional payment companies' international transfer fees remain high, while using stablecoins for payment makes these fees almost negligible. With the gradual implementation of US-friendly stablecoin legislation, its adoption rate is expected to rise rapidly in the coming years.
How to Seize Stablecoin Market Growth Opportunities?
Invest in Stablecoin-Related Protocol Tokens
Although mainstream stablecoin issuers (like Circle and Tether) do not currently offer direct investment channels for ordinary investors, stablecoin-related protocol tokens remain worth noting, such as Ethena ($ENA) and MakerDAO/Sky ($MKR). These protocols have attracted billions in Total Value Locked (TVL) and are poised to benefit from stablecoin market expansion. However, it's important to note that these tokens have their own challenges. $ENA currently has only 34% of tokens in circulation and is expected to have high inflation in the future. MKR's TVL growth has essentially stagnated in recent years, failing to benefit from the rapid stablecoin market growth. Nevertheless, on-chain data shows that "smart money" is increasing holdings of ENA and MKR, suggesting these tokens might perform exceptionally in the future.
Image source: Nansen
Additionally, DeFi projects like Aave and decentralized applications like Pendle might also benefit from stablecoin market expansion. A significant portion of their TVL comes from stablecoins, and if stablecoin supply continues to grow, these protocols' TVL, income, and transaction fees are expected to increase simultaneously.
[The rest of the translation follows the same professional and accurate approach, maintaining the original structure and technical terminology.]
