Solidus
  • ⭐OVERVIEW
    • Background
  • Introduction
  • 💲The Stablecoin
    • Minting $SUSD
  • Peg Stability
  • Yield Generation
  • ✨Details
    • Features & Advantages
  • Mechanism & Technology
  • 🪙Tokenomics
    • Allocation
    • Utility
  • 🛣️Roadmap
    • Foundation Phase
    • Growth Phase
    • Expansion Phase
    • Maturity Phase
Powered by GitBook
On this page
Export as PDF
  1. OVERVIEW

Background

DeFi has truly transformed the crypto world, changing how we exchange, store, and use value in a trustless way. Central to this change are stablecoins. They are the backbone of all on-chain activity, driving trading, lending, and settlements on both decentralized and centralized platforms.

In Q2 2024 alone, stablecoins powered over $8.5 trillion in on-chain transactions. They accounted for over 90% of order book trades and 70% of all settlements. This clearly shows they are the most used assets in both DeFi and CeFi, connecting volatile crypto with real-world uses.

Despite their crucial role, stablecoins face major hurdles in achieving true decentralization and scalability.

Challenges of Existing Stablecoins:

  • Fiat-backed Stablecoins (e.g., USDC, USDT):

    • They lead the market with stability and efficiency but rely on traditional banks.

    • This brings significant problems: custodial risks (money held in regulated accounts), exposure to government censorship, and a "return-free" setup where issuers keep the yield from backing assets, while users bear the risk of depegging.

    • Recent collapses of centralized firms, causing over $15 billion in losses, highlighted how fragile this centralized reliance can be.

  • Decentralized Alternatives:

    • They haven't found the right balance between stability and scalability.

    • Overcollateralized stablecoins (often requiring 150% or more in collateral, common on Ethereum) are capital-inefficient. Their growth is tied to the demand for on-chain leverage. While secure, this limits their ability to grow into billions without tying up huge amounts of capital.

    • Algorithmic stablecoins, built without external backing, have proven unstable time and again. They often crumble under market stress due to flawed designs.

    • Even earlier synthetic dollars using delta-neutral strategies struggled. They were limited by a lack of liquidity and exploit risks on decentralized trading platforms, hindering their widespread adoption.

The stablecoin market is worth over $200 billion and has over 100 million users, showing strong product-market fit. Yet, it still presents a trillion-dollar opportunity, largely untapped. As DeFi adoption grows and blockchain ecosystems mature, there's an urgent need for a stablecoin that is capital-efficient, censorship-resistant, and generates sustainable revenue.

This gap, caused by the fragility of centralized systems and the inefficiency of decentralized ones, creates the perfect opportunity for a new type of crypto-native money. This new paradigm can truly meet the needs of both individual users and the wider financial world.

NextIntroduction

Last updated 7 days ago

⭐