Yield and Stablecoins: Why Is Everyone Launching Their Stablecoins? | ETHSofia 2025

[Music] Great. Um, super glad to be here and discussing exactly this topic because I think stable coins are really the hottest thing in crypto and actually in ThreadFi this year. And uh I'm happy that we are continuing the discussion from the previous presentation where stable coins were kind of explained. So we don't have to go through that you know the types of the different types of uh stable coins. Um and we can just directly jump into the discussion of you know why are stable coins so hot right now?

Why is everybody launching their stable coin? And we also have the secretary of finance basically uh of the US saying that he expects dollar denominated stable coins to reach three $3 trillion in the next two or three years. Um so why is that? Why are stable coins successful? And then we can move a little bit to towards the risks.

So who wants to go first? Um I I think I'm going to start just because I'm closest to you, I guess. Um I think there are like I would say there are like three reasons why stable coins are becoming I mean they've been the the main use case for quite a while. Um die like the maker stable coin the white paper was actually published before the Ethereum network went live. So it's a use case that kind of predicates Ethereum in a way.

Um but so there are three reasons. One is you know cheap international transfers. Uh two a lot of there's a lot of demand for stable currencies in which in a global context you typically means u US dollars or like onetoone redeemable assets and then the third one is yield and uh I would say yield is the product and stable coins are the use case.

Cool. I I would add that uh an overtone window kind of opened recently because the president of the United States signed a an act that basically officialized that the US would not pursue a CBDC and instead they would push for private money which means that uh it's basically a open bar for any private company to build their own banking system and to scale the dollar privately. It's going to be a trillion dollar business. Multiple trillion dollar business is going to are going to appear. I think a proof of that is that Tether just uh just just leaked that they're raising at half a trillion dollar valuation.

It's probably the biggest private company in the world. Um so it's very important to understand that the reason why everyone is talking about this is because of the opportunity that it represents on the market. It's not like most of crypto was illegal or illegal. It's very much enshrined in the US because the United States is using private money as a way to scale the dollar dominance to the internet. The other thing to understand about this opportunity is that I haven't mentioned the yield.

Uh money at least stable coins and deposits. Banking deposits have two functions. One is savings and the other one is payments. Savings is very much captured by banking. It's a huge industry.

It is being disrupted by stable coins. But the other one is payments. payments is slightly smaller than uh savings today. So people have been focusing a bit less on it up until now. The reason why you might have seen a lot of fundraises around payment chains over the past few weeks uh is because the potential for payments is 10 to 100 times bigger than uh than savings over the medium term.

So it's both regulatory opportunity and economic opportunity that makes this so big. So why is everybody launching their stable coins? U you have to imagine that banks they want to attract your money. They want you to deposit money within their uh bank. And why they do this?

Because as you know they make money with your money. When you want to create your own stable coins basically you don't need to advertise it. You don't need to create credit card or all those products to attract people because everybody wants stable coins because every everybody wants to make money because yeah I just speak about the yield now stable coins you know that with it you can make y in defy with different protocols with the issuer itself. So they are basically a liquidity sinkhole. So many companies they wake up and they say okay how can I make money easily?

I just launch a stable coin I back it with some bonds from the US or whatever. people will just come. I again don't need to advertise. I don't need to create a lot of services. I don't need to hire hundred or thousand of people to run my my machine and people will just send me money.

I will buy bonds. I will keep a big part of it if no all of it and I will redistribute part of it to my users. And this is why we have the explosion of stable coins because at the end of the day, if we forget about all the nice things like the payment and so on and so on, it's also a pure cash machine for the companies issuing stable coins. Great. Thank you.

Um I I really liked your uh replies to this one. Um so we already spoke spoke about yield and we know there are so many different types of stable coins. So where is the yield coming from? Like I would say in the most common way like where is the yield that the user gets? I would I would focus on the user in this in this respect.

Where is the yield coming from? I mean so so if we talk about like the so the blue chip or the the safe or real yield um basically conventionally or traditionally that has been coming from lending marketplaces that are on chain like a moro oiler etc. Um and then you know to what Pascal mentioned uh a ton of companies over the past couple of years have started doing like oh we're going to have TPLS and TPLS are paying 5% so like we we'll give that to the to the um holder of the stable coin. Well, if you dig a bit deeper on the lending marketplaces, usually the yield comes from demand for leverage, right? Like one one of the things that um sometimes people especially people who have been exposed to like a singular cycle in the market forget is like ultimately um a part of the industry that is kind of frowned upon of like oh like it's it's all about speculation and blah blah blah and like but you can have lending and I'm like like yes the lending it is it is an amazing um product and and innovation but it ultimately the demand for it comes from someone somewhere wanting leverage.

Um, and with that like it it scales with the market cycle as well, right? Like when we're in a upward trend, yields go up to like 12 15% and that's that's safe end of the spectrum and then you know we can get into the longtail assets later. There's a cynical part in me that uh tends to think that it's all lending in a sense because uh if you look at uh T bills for example, so bonds as Pascal just mentioned, you're basically lending to nation states. U most of the actual yield sources are different types of lending. So you have crypto um overback lend uh overback lending.

You have corporate lending called private credit. You have T bills which is basically state financing. Uh and then you have a few other like uh swap uh swap fees that you can get on AMMs. Basically uh the yield comes from either lending swap trading and then the third option is incentives. That's uh you have to be honest today that a big part of all of the the industry is being pushed by all of these incentives, airdrops, token incentives, uh cashbacks.

So it's always been like this in a sense, but I think that where we have to be careful is that not all stable coins are equal. This is a big part of why the regulation has been pushing a lot for what is the underlying of a true stable coin. So if you look at the genius uh regulation in the US uh it's only going to be US bonds or cash deposits. Uh if you look at what Micah wants to do, it's kind of similar. Um so not all stable coins are created equal.

It's very important to understand that. But the yield sources uh are kind of what defines the yield and what we're saying is the higher the yield, the higher the risk, which is not surprising. Mhm.

So it's a it's a very good and important question because when you want to buy a stable coin, the first question you have to ask is from where comes the yield. So you have to do a bit of due diligence. For example, we just spoke about a stable coin called USD AI. So when you first stumble onto the stable coin, you're pretty happy because it pays a very high yield. So you may just want to get into it.

But again you need to know from where the Y come from. So you have to do some research and you realize that the stable coins is basically again like a bank. You give money to this company. This company gives you a stable coins and the Y comes from them lending money to AI company data centers and so on. Which means that if you lend money to someone there is a risk that this someone will not pay you back.

So for example for this specific stable coin me I prefer to to don't use it because my risk tolerance will reach its limit. But uh yes so you have some stable coins from the y comes from lending the money to someone else. Of course you have what we discussed the y coming from the bonds and so on but in general the yield is always coming from the backing. So the collateral so your work as a defy user as a protocol builders is to make your research to understand what is the collateral is it risky and so on and if you can't find it it means that the yield comes from you which means that it could be a ponzi or or it just a token printed out of thin air and and so on. And I I think like um this hits on a on a very important aspect of the industry that somehow is because it's not quantitative enough yet sometimes gets overlooked, but there is always implied risk premiums on like longtail type of stable coins, right?

like like if if USDC pays 5% and you have something like like the the AI thing, it's like the the they cannot get away with less than 20 plus just because people are like looking at it and like okay like the chances of this not existing until the next market cycle are pretty darn high. So it should be a lucrative opportunity at the moment on like a shorter time frame. So, so we'll have this sort of separation of here are some some some assets that are trusted although we're aiming to build trustless systems etc. like trust plays a huge role in it, right? So there is a a part of the of the asset space that is pretty trusted and you know like the yield required there is not as high and then you have on the other end of the spectrum you have you know this like more aggressive opportunities.

So it's you know it's it's a spectrum and ideally over time we'll see who who sticks around and that the projects that manage to sustain um like operations they will probably see the yield required by the market for their asset go down with time as they acrew Lindy

I think that's a very important point um yield doesn't scale as much as we think in the sense that the more demand you have, the bigger you get, the more yield are going to get constricted. Traditionally in finance, we tend to see that very competitive opportunities where risk is progressively uh seen as lower tend to compress around 4 3 2%. So uh when you're seeing over 10 over 20 over 100% yield, there's two options. Either it's a scam or it's very new and it's very quickly going to contract. So you're not actually going to get that yield that's advertised because most of what most of what you're seeing in crypto is real-time yield.

So the it can get contracted really high if the riskreward is too is too interesting for people. Um

yeah, that's true. Someone can just come in with 300 million and like a hedge fund because people are specialized in doing this and they just arbitrage the yield very quickly. So it's it's never too good to be true in a sense and I think the whole challenge is when you're getting these yield new yield sources up to where can they scale to relative size. If you look at Ephina for example, which has been the breakout success of the past year or two um they are kind of um constricted by the actual size of per in general in the market which is uh I think they're at the maximum size right now. So most of the projects that get to such size what they do is they diversifies into tus because these can scale into trillions.

And talking about pers, I would like to get your opinion on one of the hottest projects u from I think even from the last cycle but uh currently one of the projects in defi that are actually generating revenue and that's Athena and they have a very interesting model and they are now entering the thread scene or trying to enter threadfi. So just quickly I would like to understand like where would you put Athena on the risk spectrum having in mind you know the way it's collateralized. So I think it depends on how you assess the risk in my viewpoint have already been battle tested. They have been through some storm. there was the issue with the hack of the exchange they were using but we saw that they were prepared for that because their funds were not in the exchange and so on part of the execution of the risk management I will say that they are on the highest uh curve of the low risk I can't say they're risk I mean more risky or less risky I mean they are not less risky than USDC but let's say they will be on my on my second uh uh level Okay.

Yeah, I tend to agree with that. I think like

on a scale from one to five, let's say. I guess in your scale it's like okay, two would be

okay.

Yeah, I I I would probably place them in the same place like I think um they because of their sheer scale they have to rely on a large network of of partners and venues and custodians and exchanges etc etc. So a single like even if it's a counterparty of theirs collapses just the exposure that they have to each counterparty is relatively constrained because yes they might be the largest uh business relationship of that counterparty but that counterparty for them represents like a small fraction of what they what they are doing and um you know let's say you have like 10% of your of your of your business is with a single counterparty even if that fails um there is enough equity in the business that you know I I I can see them like keep to keep they'll keep going and they'll like over a couple of years through the yield they'll just recover the you know they they'll plug the hole which is something that um so Tether had another business called Bitfinex back in the day and like that's sort of a situation that they had there right they were they got hacked and then people that suffered losses they they were just issued a receipt that over time through um fees generated by the exchange they got paid back and I think Athena is in a position where like even if there is an event they have enough cash flow and they're like a profitable enough business that they'll be able to plug that in.

Yeah,

if they want to. My assumption is that they do.

Oh, I think your assumption is right. They wouldn't kill their business for this. uh the part where I don't agree is to classify USD if it has as digital uh synthetic as a stable coin. Um stable coins legally speaking are basically the equivalent of banking deposits. What Ephina does is closer to what a hedge fund does.

So the risk is I think it's better uh to think that Ephina started as a tokenized yield source and they've progressively been getting closer to what a bank looks like because they're allocating to multiple yield sources. Right now they're into the SUSDS from Sky and that used to be called Maker and into their own yield source. So the thing is if you compare it to risk of a traditional stable coin uh you basically conflating the fact that they are they are fundamentally taking more risk. Their team has proved operational excellence. They have an insurance system.

They have an equity buffer. So they are very different from projects who might want to do similarly to them because they've passed a threshold in a sense. But comparing them to actual stable coins is a very dangerous slope which has opened an overton window for a lot of projects to get into it. And that's why I mentioned previously that there was stable coins and uh synthetic dollars in a sense because the truth is uh the risk profile is very different even if it's low in a sense uh it's still very far and I would say by an an order or two orders of magnitude from something like circle or tether. Yes, I completely agree.

Actually on the side of Athena, they they present themselves as a synthetic dollar, but I know that a lot of users don't really, you know, um see the difference or understand the difference. Um okay so I've like when I was opening the conference today I mentioned that you know the whole financial system through tokenization through stable coins because stable coins basically is tokenization of dollars is going onchain and vitali had a piece recently called um well it wasn't called lowrisk defy but he introduced this concept of lowrisk defy which I assume is um you know this compression of yield due to the increased degrees of trust in time and Ethereum being the place where you know uh stable coins can get away with lower yields because you know trust in them is uh is kind of higher. Um so what do you see happening with stable coins uh in the future? Do you expect most of those to be collateralized with traditional assets? Do you expect more, you know, synthetic dollars uh happening?

Uh and yeah, like what do you see happening with with regulations? You mentioned the Genius Act and um it was kind of as far as I understand the Genius Act was uh kind of agreement between the DeFi or crypto sector and the incumbents the banks of you know allowing these stable coins to exist but then not having yield connected to them and uh um so so regulation kind of shapes the future of where stable coins are going. So what do you think is going to happen uh in the next two three years with stable coins? Uh what kind of stable coins do you think will be mostly used? So my viewpoint is um that cryptocolateralized stable coins will be like defy.

It will remain a niche for us for crypto people for people who are okay to put some crypto assets as collateral. But most of the of the stable coins will be collateralized by real world assets either bonds or just cash in a bank or whatever. And it's just because who will be the users? It will be companies. It will be you and me.

It will be your families and so on. And they don't want to take the risk of the volatility of the collateral. So this is what I think about D5 in general like there will be two D5 now D5 for us the nerd and so on or D5 power users and we are okay to take the risk and to do very weird stuff on chain but then there will be the D5 that should power real use cases payment and so on and this we can't take the risk to have even though I love D and liquidity and so on no they will be using USDC tet and and and other things

I think it's pretty obvious it's also a shame because we've kind of lost over the past two three years the weirdness that used to be built out. I really hope it's going to come back. But um what we can expect is a major shift. Uh the Genius Act, you mentioned MA in general, they're pushing for stable coin issuers to be very similar to banks. They're basically opening the door for almost exclusively only banks to be able to afford to build these out.

Um unfortunately, a lot of these projects will quickly die out, the ones who are specifically uh T builds back, etc. because uh we are off from a high of what interest rates were for T bills especially in the US but everywhere in the world. So we had the first rate uh hike down of 25 bps last week 10 days ago and it's going to keep going down and basically all of these projects are going to see their margin being contracted very hard and they're going to have to be much more creative with their business model. I think a lot a lot of them won't be able to do it. uh a lot of projects will go with more exotic collateral which by the way is not legal as of now and by doing so they're going to take more risk.

It's going to lead into uh uh something where people were led to believe they were in very safe stable coins then these are probably progressively going to get riskier and riskier. Uh in essence the only edge that an asset manager an asset issuer has and is going to keep having outside of the network effects that are being built out is basically risk management. So we talked about Ephina before but projects who have built very heavy risk management um are going to be the winners.

Yeah I I think you know um the way you introduced the question the question of like the genius act being an agreement between DeFi and TRA like I I disagree. I think the genius act is like how Trati is trying to kill DeFi in the shape that we have today. Um it's basically like they they're trying to um create a legal mode where it doesn't exist yet to like make sure that they're the the sole issuer of um stable coins. Actually, it's uh so uh 2021 um like the German Minister of Finance on a on a G7 summit said that we should do everything possible to um keep the power to issue currencies within nation states as a response to what was happening in in DeFi at the time. Um and basically this is like the concession of governments now is like okay we'll allow private money but private money will be issued only by entities that are you know tightly coupled with government governments like it's unclear who controls who but like they're very tightly coupled and the the nerds that are doing stuff on chain will try to like put them in a corner.

Um, it's not a very aspiring view for the future, but like that's probably what's going to be the 80% of the market and the remaining 20 are going to be like niche things that we do on chain. Um, and you know that's that's uh I think that's the most likely outcome of the future and we're seeing like the importance of distribution even beyond legal modes, right? like um Stripe launching their own network and it's it's it's a play to circumvent Visa and Mastercard, right? because they they they have a big enough network that they can deploy their own blockchain and they can deploy their own stable coin and you like like tap into the payments use case without ever touching DeFi or like honestly like like

arguably not even using like a real blockchain. I just want wanted to add something also. Even though most of the stable coins will be uh created by by Tati, there is something very very interesting and funny that is happening right now and will keep happening. If those stable coins issue, they want to have some success. They still need D5 power users and and it's very funny to see them that they come on Pendle or or I'm pretty sure you saw like few two weeks ago there is hyperlquid.

They wanted someone to to to deploy a native stable coins on Hyperlquid and you had very respectable Tratfi guy with a suit and Kravat and so on who come on the discord of Hyperlquid speaking with a cat uh you know with the NFT and so on and and even though it will be maybe Trafi who will mainly issue stable coins, they will still have to comply to deal with a pure defy nerd and and this is why there will be this interesting and funny overlap. just because I have a few more but the time is running out. Uh do you think the Genius Act is a positive step or is it negative? Positive or negative for the for the DeFi space for the DeFi user?

Uh honestly it depends what your bags are.

Okay. I I think that's the best answer you can get.

Okay. Um and then finally because I wanted to ask you about you know in this uh low the in this space or state where the tibial yield is going down what do you think is going to happen uh with with stable coins on chain but you kind of reply to that question uh but do you expect a large influx of stable coins into D5 maybe like just quickly uh in the next couple of years like where are the these $3 trillion dollars of new stable because coins going

um well right now we are when you look at innovation cycles we're entering the synergy era so it's basically we have working tech we can actually do things with it uh so how do we uh make it compatible with what works today an example uh there's a chain launching tomorrow called plasma who announced plasma one which is basically a neo bank and what these guys are trying to do is uh creating savings accounts for countries that want dollar but don't have access to it. So countries with very high inflation like Turkey, like Argentina and their whole point is okay, people who are earning their wage, they're struggling to get dollar. So they could just unramp very quickly and get all of their savings into dollars far away from banks in their country that could just seize or freeze the dollars they would have because these are highly valuable assets in countries where money has a hard time in being managed properly. So you can just start by doing this then you have all of the payments all of the remittances that are done from uh western countries into any other countries in the world for example from the US to South America. Uh it's going to go very quickly.

Then you have all of the lending. Uh earlier this year the US announced that they would allow Fanny May Freddy Mack who are the mortgage mortgages don't really call them companies but institutions that enable mortgages in the US that they would allow uh EH and BTC to be used as collateral to buy a house. Uh you have a project that's called Pawn who just announced that they would do mortgages onchain. So just progressively bringing all of that financial system uh onto crypto onchain uh will enable trillions of dollars of stable coins to appear and in other currencies.

Yeah. Uh and yeah I like that any other currencies or and other currencies and in relation to that uh or Pascal do you want to take this a little bit more to expand? Okay. So, I'm going into the area of central bank digital currencies. Um, because we know that there is a digital euro coming up.

I think it's going to happen in like the first issue digital tokens of the euro like digital euro tokens will most probably happen uh to 2027 or something like that. So, there is time. But when we're talking about central bank digital currencies and stable coins in this era of you know the genius act of heavy regulation you know what what is better is the fact that uh the US have said that they want to they don't want to issue uh uh central bank digital currency a good thing uh on the background that they're going to be issuing so many stable coins. So are you know stable coins better than central bank digital currencies? Uh and why or why not?

Uh of course it depends uh how you see the world. Uh my my personal point of view I guess we share the same country have of course the rights to print money and they should do it but they should allow let us play with DeFi and stable coins on DeFi should be like a common good. Everybody should be able to use it. Like Roman was saying, it's awesome that anyone in the world can get access to dollar or any currencies. You just need internet connection and boom, you have dollar, you can have yield.

And this thing, it's it's like one of the biggest innovation and we shouldn't uh uh abandon it. So I'm not against CBDC. Of course, I'm not a huge fan because it's increased control from countries and so on. And of course I would prefer a world where uh we have more freedom and and we have our own responsibilities and no one is dictating what to do with the money. But uh yeah then it will depend of course in Europe we have different way of seeing things.

in the US as you said it's more liberal but uh yeah

I I don't see like bank like private bank issued stable coins to be meaningfully different than central bank stable coin right because because ultimately the central bank arguably should be controlling and like monitoring and in charge of of whatever private banks are doing so it's it's a better distribution model but fundamentally I don't see them as different products Mhm. That's a good point.

I see them as different product, but I agree with everything else you just said before in the sense that in the end, the stable coins who are going to be allowed to thrive will be regulated exactly like the banking system, which means that the end goal for states can be very similar. It's very much an ideological question. So basically liberalism versus state control. Um something that we really have to take into account is even if people are doom posting about CBDC's and the the ECB just announced that they were very serious about uh a euro stable coin they started working on it. There's a very big difference between the speed at which a startup operates and the state at which a state or national institution operates.

Uh I don't think we'll have a digital euro in 2027. We'll have the digital sandbox test mode in 2027. It will not be live before 2028 2029. Considering the speed at which dollar private stable coins are scaling right now, it is very obvious that uh the market will be in a very different place in three four years and it is unlikely um that CBDC's are commercially successful uh in the next decade because of this. They're going to be too slow.

Um I think they are necessary. The arguments that the ECB has in having a digital euro specifically for retail is good for protecting customers and users in general. The problem is we is that we are going to relinquish most of the monetary sovereignty to the dollar in the coming years and it's becoming very clear this is inevitable today. Yeah, that's a a very very good point because the speed of innovation with stable coins that is being unleashed now with the with the Genius Act is going to completely anhilate any chances of uh I would say a European represent like stable coin well not stable coin industry but but the expansion of euros in this new digital world that more and more people are are using. So in my opinion also this idea of the European Central Bank that the digital euro will be the reply of Europe to you know the dominance the the almost complete dominance of the dollar in the digital space is is just completely misguided and it's going to lead for lead to potentially the the euro losing even more market share uh in the next couple Although I'm not sure if it's possible because I think when it comes to stable coins, it's 0.

4 to 0.2% of the entire market cap is digital is is stable coins packed to the euro. So this idea that the digital euro will save save the euro um in the digital world in the upcoming you know blockchain era uh I think this is completely misguided and this lost time of four years that you mentioned is uh is going to come back and kick you up in the ass. Um, so

it's basically the equivalent of like having an argument at work and then in the evening under the shower you're like, "God damn it, that's what I I should have said." Like like that's what it's going to be.

Yes, exactly. Um, I think we have like four minutes, five minutes for questions. So, anyone from the audience, uh, you can scan this and, uh, add a and we have one that maybe, uh, we can give you a microphone there.

Oh, okay. Perfect.

I I I I have them here. Yeah. Yeah. Yeah. Um maybe a microphone to

there and I'll continue on Slido.

Please don't ask us anything that would send us to jail.

I thank you for the great discussion. Now my question is brief and it's mostly a matter of semantics because we've already been through the cycle in traditional finance when where we've seen the um the precedent of negative interest. Would you say that in a stable coin market or a stable coin system uh a negative yield or a negative interest would count as a deep event or it's just going to be rebalance? It's unlikely it happens uh because it would mean that uh people are so confident with uh a country's uh obligations uh T bills that they would basically be ready to pay to give them money. Uh considering the state of the world right now, it's very unlikely any country gets in this situation.

It might happen if we get another I want to say golden age. But if you look at the state of the global economy in general, we will likely not see negative rates for a very long time. And theoretically, we should not even ever have seen them. But you're right, there's always these kind of things that will break stable coins. When we say they're battle tested, doesn't mean they're tested for every occasion.

And uh in a sense yes the projects would have to dip if they didn't have treasury but probably what the companies would do is they would not allocate to these kind of uh assets if it happened.

Thank you. Uh yeah we have a couple of more here. Um one is again relating to what's going to happen with stable coins in uh in a world of negative interest rates. But that's maybe the same one. Um, and then the next one is Mika and the influence on launching stable coins.

I guess uh Euro focused stable coins. Is it is Mika helping or is it is it actually the opposite making it harder to launch a Euroex?

I think you're probably the only person who've read the whole thing, so maybe you should take this one. Um, I'm not speaking a lawyer as a lawyer. I'm being very clear on this. Uh, and also I heard doing this meant yes here. So, it's very much the French way of saying no.

Uh, we've seen this happen with ICOs that were regulated in France in 2018 with the pack law. Uh, the people were convinced that creating innovative regulation would help and being the first would help. Uh what we're seeing again is no one is incorporating stable coins in Europe. It's just not possible. People are barely succeeding in being compliant for becoming uh what we call PSN CSAP.

Um basically digital asset providers. Um the truth is if regulation is too tough which it is uh it basically leads to not having local actors and then we basically have to rely on external actors. The irony is not just that for example we are dominated by dollar stable coin but the only re relevant euro stablecoin is built by circle which is an American company. So we are so far down that we don't even have sovereignty over our own pseudo sovereign assets. So no there's like two assets that are ma regulated today and they're both Americans.

It's not working.

Yes. Thank you. Um I see one that just came in. Um well there are many coming coming in but I I don't think we'll have time to to re reply to all of those. Uh maybe last one.

What will happen to uh CFI exchanges or D5 liquidity when there are five 10 major stable coins? Would that delusion of pools or pairs on C5 exchanges cause issues? So I guess Bitcoin to 10 different stable coins or Ethereum to 10 different stable coins or any asset to any different like different stable coins. Um I think onchain that problem is going to get solved more easily. Um we're building something around that that sort of solves this.

Um I believe like a lot of projects are tackling this for onchain pairs. I think for for CFI it will basically they they'll just take the approach of have direct redemption with issuers treat those as equal assets and like the user is not going to see 10 different stable coin pairs on the exchange. they'll choose which one they want to do, they want to transfer when they're like offboarding or whatever. But like within the within the interface will reach sort of like fungibility of stables uh where like the the exchange would have direct redemption and the others are not just going to get delisted. So it's going to it's going to get to a consolidation point where you are either big enough to be relevant or you just die out.

And we saw that during like the 20 2022 to 2024 bare market like like a lot of projects that were not at sufficient scale to survive they just died out and we'll probably see that with stables like a lot of the demand that Pascal was mentioning of companies like launching their stable coin like Walmart because they have a big treasury or like like balance sheet they launch stable coin they they might they harvest the 5% yield yield goes to zero they'll be like it it's not worth it

um yes I there many questions that I want to ask you But we are kind of low on time. Uh just final one and just with one sentence if if possible. Logarithmic stable coins. Do you expect more experimentation in this in this area after the collapse of Teral Luna?

Yeah. Algorithmic stable coins. Are we going to see experimentation or Teraluna just kill them all? I mean I want to see experimentation not necessarily around algorithmic stable coin. Uh I want to see more around uh exotic currencies.

So creating what we call floating currencies. I think this is where things get very interesting. I do think it's going to be less intense than it was over the past three four years because of regulation.

Okay. I think algorithmic stable coins had their time when we didn't have other options. Today we have so much yield that we can make with normal stable coins that apart from creating a community and having fun and I don't see a point to have algorithmic stable coin.

Okay. Well guys please thank thank our panelists. [Music] [Applause] Heat. [Music]