Author: Raymond Yuan
SINGAPORE, Aug. 13,
2024 /PRNewswire/ -- Stablecoins have been in
existence for over a decade, but their prominence surged after 2017
when governments worldwide started restricting or even shutting
down fiat-to-Bitcoin trading channels. Since then,
stablecoins have consistently acted as a crucial bridge between
fiat currencies and cryptocurrencies. Today, with
daily trading volumes approaching $100
billion, stablecoin pairs make up over 80% of
the market's activity, far outpacing fiat-to-crypto
trading volumes.
As the benefits of stablecoins—like anonymous transfers, low
transaction fees, rapid processing, irreversibility, and 24/7
global peer-to-peer transactions—become more widely recognized,
these digital assets are increasingly being integrated into
everyday payment scenarios, broadening their range of use cases.
However, despite these advancements, the stablecoin
products available today still face several critical limitations
that impede their growth and broader adoption.
The Stablecoin Conundrum: Tackling Key
Challenges
- Lack of User Incentives: Most leading stablecoins
in the market today offer little to no incentives for users, with
issuers and operators capturing all the profits. Consequently, when
customers hold funds in stablecoins, they miss out on earning
basic, risk-free returns. During periods of high interest rates and
subdued market activity, users are less inclined to retain
stablecoins, resulting in significant outflows. While users can
generate returns by lending stablecoins or engaging in high-risk
investments, they must assume additional risk to do so. To sustain
stablecoin circulation growth and compete effectively
with traditional payment wallets and demand deposits, there must be
enhanced incentives to retain customers and foster loyalty.
- Lack of Community Governance and Transparency: As a
blockchain-based product within the Web3 ecosystem, stablecoins
should more closely adhere to the fundamental principles of this
space—specifically by introducing community governance and
utilizing on-chain asset proofs to increase transparency.
Currently, the success of stablecoins is largely dependent on the
integrity, discipline, and decision-making of the management team.
However, without community governance, this control remains highly
centralized, leaving the management team vulnerable to the
temptation of pursuing higher returns by taking on excessive risks.
Moreover, relying on traditional auditing firms for verification is
inconsistent with Web3 principles. Many large-scale financial
collapses have been caused by the failures of conventional auditing
practices. In the digital future, trust must be grounded in the
reliability of technology and established rules, rather than the
ethics of individuals or institutions.
- Lack of User-Friendly Interfaces and Convenient Access to
Funds: A straightforward street survey of 100 adults on
their use of cash, bank cards, mobile payments, and stablecoins
would likely show that stablecoin payments are still
in their early stages. Despite their growth, stablecoins have a
relatively small user base compared to traditional payment methods,
and their adoption remains limited. Many potential users are
unaware of how to easily and affordably acquire and redeem
stablecoins. To advance stablecoin payments, expanding
the user base is crucial. Currently, most stablecoin
transactions rely on over-the-counter (OTC) trades, which not only
facilitate fraud but also restrict legitimate use. For
stablecoins to succeed, they need to establish more accessible
distribution and exchange channels. This underscores the need for
improved education and more efficient infrastructure.
- Lack of Diversified Product Lines, Use Cases, and Value
Ecosystems: Most stablecoins today are limited to a single
product line, and many do not provide their own wallets. This
creates challenges for new users, who must navigate issues such as
seeds, gas fees, and cross-chain transactions. Institutional users
face additional hurdles, including inadequate support for
stablecoin custody and internal transfer approvals,
which often forces them to build their own infrastructure from
scratch. Furthermore, the lack of diverse use cases means that many
users see stablecoins primarily as a medium for value transfer,
rather than holding them long-term. This results in a really short
value chain, requiring frequent switching between stablecoins and
fiat currencies to meet various needs. A more robust value
ecosystem is essential to address these issues and support
sustained use and adoption.
WSPN: Crafting Stablecoin 2.0
WSPN (Worldwide Stablecoin Payment Network) is at
the forefront of crafting Stablecoin 2.0, setting the
standard for the next generation of stablecoins. Our mission is to
design and develop infrastructure that embodies the essence of
Web3, with a focus on enhancing the robustness and transparency of
stablecoin systems. We emphasize user and community
engagement, striving to offer a diverse range of products and
expand use cases. By integrating stablecoins into more real-world
applications, we aim to serve a broader audience and scale to a
billion users. Our vision is to revolutionize digital payments,
positioning stablecoins as the leading payment method in the future
digital economy.
- From the People, For the People: WSPN will
introduce its own governance token to incentivize users by sharing
the ecosystem's value with them, making them the primary
beneficiaries of this infrastructure. True infrastructure "comes
from the people, serves the people," and should not solely cater to
the profit ambitions of a few. Any value system that fails to
prioritize user value and incentives at its core is ultimately
destined to be abandoned by its users. Unlike many stablecoins that
simply distribute interest from underlying assets, WSPN's
governance tokens allow users to share in the ecosystem's long-term
value, liberating them from the limitations of fluctuating LPR.
Over time, this approach will cultivate a strong sense of ownership
among users, ensuring that the infrastructure remains
community-driven and user-focused.
- By the Community, For the Community: WSPN will
adopt community governance, empowering governance token holders to
participate in on-chain voting. The goal is to shift from
traditional corporate governance to a truly community-driven model.
As a blockchain-based infrastructure, stablecoins must align more
closely with Web3 principles. Decisions about the allocation of
underlying assets should be made collectively by the community,
which will vote on various risk/reward proposals. These decisions
will be transparently recorded on the blockchain, enabling
real-time on-chain asset verification and eliminating dependence on
any single audit firm. Community governance seeks to build trust
rooted in technology and rules, rather than in individuals or
institutions.
- Empowering User Accessibility, Redefining Payment
Systems: WSPN will dramatically enhance user interfaces, reduce
entry barriers, and streamline the process for users to freely
access and withdraw funds. The future of stablecoins must
prioritize maximum accessibility, enabling both individual and
institutional users to transition to stablecoin usage
at a lower cost. It's essential to understand that stablecoins
should not be confined to the niche of crypto asset
trading. Their primary mission should be to upgrade existing
electronic payment systems, and even settlement and clearing
processes. This means shifting from traditional bank transfers
based on electronic ledgers to blockchain-based transfers on
distributed ledgers. While stablecoin payment networks
will coexist with traditional payment and settlement/clearing
systems for some time, stablecoin payments are poised
to gradually encroach on the market share of current electronic
payment methods. In doing so, they will better serve the digital
and intelligent economy of the AI era, laying the foundation for
the next-generation global digital payment network.
- Building Value Ecosystem, Expanding Use Cases: WSPN
is committed to developing a comprehensive product line, fostering
a thriving value ecosystem, and creating diverse use cases for
stablecoins. The future of stablecoins should empower users to
manage a wide array of asset allocations, from stocks and gold to
oil and commodity trading, enabling the purchase of any freely
tradable asset worldwide. Stablecoins should also seamlessly
integrate into everyday spending, whether it's for public
transportation, convenience store purchases, or shopping mall
transactions. Moreover, stablecoins should provide multiple income
streams, allowing users to maximize their financial
potential—whether through holding stablecoins, lending, or wealth
management—without the need for constant conversion between fiat
and stablecoins. As a pivotal tool in open finance, stablecoins
should aim to build a more vibrant value ecosystem, drawing in more
participants to engage in various roles within this evolving
financial landscape.
Stablecoin 2.0: A New Era of Globalization
Through Digital Technology
Throughout history, technological advancements have continuously
expanded our possibilities, revolutionizing international
communication and commerce. We are now on the brink of a
transformative wave of globalization, propelled by digital
innovation. In this evolving landscape, stablecoin 2.0
emerges as a powerful catalyst, ushering in a new era of digital
interconnectedness. As we step into this promising future, brimming
with limitless potential, stablecoin 2.0 stands at the
forefront, guiding us toward a world of unprecedented opportunity
and progress.
About WSPN
WSPN is a global digital payments company utilizing Distributed
Ledger Technology ("DLT") to provide transparent, fast, and
efficient payment solutions. Their flagship product, WUSD
stablecoin, is pegged 1:1 to the U.S. Dollar and aims
to optimize secure and licensed digital payments for Web3 users.
WUSD is currently available on more than 30 exchanges,
including industry leaders such as Bitget and MEXC Global, and
across major blockchains including Ethereum,
Solana, Polygon, BSC, Arbitrum and Base. This broad
accessibility makes WUSD one of the most readily available
stablecoins in the market today.
Learn more: www.wspn.io | X | LinkedIn
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SOURCE WSPN