A recent analysis explores five stablecoin payment networks, evaluating their capacity to navigate emerging challenges. Typically, Tether- and Circle-centric initiatives gravitate towards distinct clusters of shared characteristics.
Foresight Ventures also provided exclusive insights on this topic to BeInCrypto. For detailed information regarding each project, refer to the firm’s report.
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A New Stablecoin Report
The stablecoin landscape is reaching unprecedented levels, with numerous industry leaders anticipating significant advancements ahead.
In this environment, Foresight Ventures published a report on the potential of stablecoins, asserting that they may evolve into “the backbone of a global payments network.”
This report indicates that two primary factors are converging to propel the stablecoin sector. Web3 companies are aiming to merge with TradFi to capture corporate investments, while financial institutions are exploring blockchain for innovative functionalities and applications.
As a result, the market is driving demand for these tokens from both ends.
Nevertheless, the report emphasizes that not all stablecoins are equal. Technology has faced specific practical challenges under intense new stress tests, prompting developers to explore diverse methods of innovation.
Alice Li, Investment Partner at Foresight Ventures, exclusively shared her thoughts with BeInCrypto:
“The market is becoming aware that general-purpose blockchains may not be ideal for all use cases. What makes this field particularly fascinating is how various projects are tackling the same issue from different perspectives. It remains to be seen which strategy will emerge victorious,” Li expressed.
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Differences Between USDT and USDC Approaches
Some of these drawbacks, such as fluctuating gas fees and sluggish transaction speeds, are notably prevalent in general-purpose blockchains like Ethereum. Foresight’s report scrutinized five new stablecoin projects: Plasma, Stable, Codex, Noble, and 1Money, assessing their achievements and shortcomings.
Without delving too deeply into specifics, this report highlights some compelling general trends in stablecoins. Essentially, irrespective of the L1 blockchain framework, users will favor one of the leading established tokens.
Consequently, these firms must cater to assets like USDT or USDC, with a pronounced leaning towards the latter.
The networks focused on Tether largely concentrate on DeFi-centric economic systems, appealing to retail users, while those aligned with Circle emphasize institutional investment and regulatory adherence.
1Money, which does not conform to either of these patterns, aims for corporate adoption even more than the USDC-aligned projects.
The report thoroughly evaluates all five of these stablecoin settlement layers, and those interested should explore the raw data for their own analysis.
At present, it is challenging to predict which of these initiatives will enjoy the most enduring success, but a wide variety of differences exists among them.
