Fearless of bulls and bears, let's take stock of emerging stablecoins

Author: WOO X Research

Background: Stablecoins Have Become a Battleground

Cryptocurrencies have long been associated with high volatility, with tokens easily experiencing dramatic rises and falls, seemingly having little to do with "stability." Stablecoins, on the other hand, are mostly pegged to the US dollar, serving not only as a medium for exchanging other tokens but also for payment functions. This sector has an overall market capitalization exceeding $200 billion, making it a relatively mature segment of the crypto market.

However, the most common stablecoins on the market today, USDT and USDC, are both centralized entities, with their combined market share approaching 90%. Other projects are eager to grab a piece of this pie. For instance, the Web 2 payment giant PayPal launched its own stablecoin, pyUSD, in 2023 to secure its position early; recently, XRP's parent company Ripple also issued RLUSD in an attempt to challenge the stablecoin market.

These two cases primarily focus on the payment functionalities of stablecoins, which are mostly backed by US dollars or short-term government bonds. In contrast, decentralized stablecoins emphasize yield, pegging mechanisms, and composability with DeFi.

The market's desire for decentralized stablecoins has never waned. From DAI to UST, the evolution of decentralized stablecoins has gone through several iterations, with Ethena pioneering the use of futures arbitrage and staking to generate yield with USDe, opening users' imaginations regarding yield-bearing stablecoins. The market capitalization of USDe stablecoin ranks third in the entire market, reaching $5.9 billion. Recently, Ethena partnered with BlackRock to launch the USDtb stablecoin, which generates yield from RWA, avoiding the risk of funding rates turning negative, ensuring stable income during both bull and bear markets, and completing its overall product line, making Ethena a focal point in the market.

In light of Ethena's success, more yield-bearing stablecoin-related protocols have emerged, such as Usual, which recently announced a partnership with Ethena; Anzen, built on the Base ecosystem; and Resolv, which uses ETH as collateral. What are the pegging mechanisms of these three protocols? Where does their yield come from? Let's take a look with WOO X Research.

Source: Ethena Labs

USUAL: Strong Team Background with Ponzi-like Token Design

The RWA yield-bearing stablecoin has short-term government bonds as its underlying yield-generating assets, with the stablecoin pegged at USD0. After staking USD0, users receive USD0++, using $USUAL as staking rewards. They believe that current stablecoin issuers are overly centralized, similar to traditional banks, and rarely distribute value to users. USUAL aims to make users co-owners of the project, returning 90% of the generated value to users.

Regarding the project's background, CEO Pierre Person has served as a member of the French National Assembly and as a political advisor to French President Macron. The Asia-Pacific executive Yoko was responsible for fundraising during the French presidential election. The project has strong political and business relationships in France, and the key to RWA is transferring real assets onto the blockchain, where regulatory and governmental support is crucial for the project's success. Clearly, USUAL has good political and business connections, which serve as a strong moat for the project.

Returning to the project mechanism itself, USUAL's tokenomics has Ponzi-like attributes; it is not just a mining coin with no fixed issuance. The issuance of USUAL is linked to the TVL of staked USD0 (USD0++), forming an inflation model, but the issuance will vary based on the protocol's "revenue growth," strictly ensuring that the inflation rate is less than the protocol's growth rate.

Whenever USD0++ bond tokens are newly minted, a corresponding proportion of $USUAL is generated and distributed to various parties. The conversion ratio, known as the Minting Rate, will be highest at the beginning after the TGE, following a gradually declining exponential curve, aimed at rewarding early participants and creating token scarcity later, driving the intrinsic value of the token up.

In simple terms, the higher the TVL, the less USUAL is emitted, and the higher the value of a single USUAL.

Higher USUAL price -> Incentivizes staking USD0 -> Increases TVL -> Reduces USUAL emissions -> Increases USUAL price

USD0's market capitalization increased by 66% over the past week, reaching $1.4 billion, surpassing PyUSD, with USD0++ APY also reaching 50%.

Recently, Usual also partnered with Ethena to accept USDtb as collateral and subsequently migrate part of the supporting assets of the stablecoin USD0 to USDtb. In the coming months, Usual will become one of the largest minters and holders of USDtb.

As part of this collaboration, Usual will establish a sUSDe treasury for holders of the bond product USD0++, allowing Usual users to earn sUSDe rewards while maintaining exposure to Usual. This will enable Usual users to leverage Ethena's rewards while increasing Ethena's TVL. Finally, Usual will incentivize and enable swaps between USDtb-USD0 and USDtb-sUSDe, enhancing liquidity among core assets.

They have also opened USUAL staking recently, with rewards sourced from stakers sharing 10% of the total supply of USUAL, with current APY reaching 730%.

Current data:

• Current Price: 1.04
• Market Cap Rank: 197
• Circulating Market Cap: 488,979,186
• TVL: 1,404,764,184
• TVL/MC: 2,865

Source: usual.money

Anzen: Tokenization of Credit Assets

Anzen's issued USDz currently supports five supply chains, including ETH, ARB, MANTA, BASE, and BLAST, with underlying assets being a private credit asset portfolio. USDz can be staked to obtain sUSDz, which can earn RWA yield.

The underlying assets are in partnership with the US-licensed brokerage Percent, with the portfolio's risk exposure mainly in the US market, and no single asset exceeding 15%. The portfolio is diversified across 6-7 assets, with the current APY around 10%.

The partners are also well-known in traditional finance, including BlackRock, JP Morgan, Goldman Sachs, Moody's Ratings, and UBS.

Source: Anzen

In terms of financing, Anzen raised $4 million in seed funding, with participation from Mechanism Capital, Circle Ventures, Frax, Arca, Infinity Ventures, Cherubic Ventures, Palm Drive Ventures, M31 Capital, and Kraynos Capital. They successfully raised $3 million in a public offering using Fjord.

Regarding the design of the ANZ token, it uses a ve model, allowing ANZ to be locked and staked to obtain veANZ, which provides a share of the protocol's revenue.

Source: Anzen

ANZ:

• Current Price: 0.02548
• Market Cap Rank: 1,277
• Circulating Market Cap: 21,679,860
• TVL: 94,720,000
• TVL/MC: 4,369

Resolv: Delta-Neutral Stablecoin Protocol

Resolv has two products, USR and RLP:

• USR: A stablecoin minted with ETH as collateral, over-collateralized, and secured by RPL to maintain its price peg. Users can stake USR to earn stUSR for yield.
• RLP: USR has over 100% collateral, with the excess used to support RLP. RLP is not a stablecoin; the amount of collateral required to mint or redeem RLP tokens is determined based on the latest RLP price.

To generate USR, Resolv employs a delta-neutral strategy, with most collateral held directly on-chain and staked. A portion of the collateral is held by institutions as futures margin.

100% of the on-chain collateral is deposited in Lido, with shorting collateral margins between 20% to 30%, using 3.3 to 5 times leverage, with 47% on Binance, 21% on Deribit, and 31.3% on Hyperliquid (using Ceffu and Fireblocks as CEX custodians).

Yield sources: On-chain staking and funding rates.

Base rewards (70%): stUSR + RLP holders.

Risk premium (30%): RLP.

Assuming the collateral pool realizes a profit of $20,000:

• The basic reward calculation is $20,000 * 70% = $14,000, distributed proportionally based on the TVL of stUSR and RLP.
• The risk premium calculation is $20,000 * 30% = $6,000, allocated to RLP.

From this, it can be seen that RLP receives a larger share of the profits, but if the funding rate is negative, funds will be deducted from the RLP pool, making RLP riskier.

Recently, Resolv launched on the Base network and introduced a points program, allowing holders of USR or RLP to earn points, laying the groundwork for future token issuance.

Relevant data:

• stUSR: 12.53%
• RLP: 21.7%
• TVL: 183M
• Collateral Ratio: 126%