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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