At the launch of StakeStone's USD1 liquidity distribution product, we engage with Charles to understand the new variables and dividend windows in the stablecoin market's biggest Alpha in 2025.
Written by: Web3 Farmer Frank
What is the core competitiveness of the stablecoin business?
"Credit."
The response from StakeStone founder Charles is straightforward and frank. In the stablecoin battleground, the typical embodiment of 'credit' is the backing of credibility like that of the Trump family as seen with USD1. In less than 100 days since its inception, USD1 achieved a phenomenal 'from 0 to 1' growth and full coverage on top exchanges.
Since March, the issuance has soared to $2.1 billion, surpassing FDUSD and PYUSD to become the fifth largest stablecoin globally (according to CoinMarketCap data), and has fully landed on top CEXs such as HTX, Bitget, and Binance. In contrast, PYUSD, backed by PayPal, has struggled to gain traction over the past two years.
In Charles's view, "The essence of currency issuance is credit." The stronger the credit, the faster the application will be. Therefore, he is confident that USD1 will be the most promising stablecoin for growth in 2025.
So, why did StakeStone secure this first ticket?
"The development logic of USD1 is different from USDT/USDC." USD1's unique credit backing allows it to have greater cross-domain adoption and resource integration capability in the real world compared to traditional stablecoins.
Therefore, the greatest growth potential for USD1 does not lie within the Web3 circle, just as a larger proportion of USDT and USDC's current applications are in traditional finance, including but not limited to: large financial institutions, cross-border trading companies, small and medium enterprises, individual entrepreneurs (such as freelancers, content creators), and regions with underdeveloped financial services. These areas will greatly benefit from the popularization of this round of digital stablecoins (Digital Money).
The widespread adoption of USD1 on-chain must be achieved through a hub of full-chain liquidity. Therefore, according to Charles, as early as the second half of 2024, StakeStone began discussions with World Liberty Finance (WLFI), the issuer behind USD1, regarding cooperation on full-chain liquidity.
The key factor that truly prompted WLFI to choose StakeStone was StakeStone's demonstrated multi-chain operational capabilities in previous products like Berachain, particularly the functional performance exhibited in building 'full-chain liquidity distribution.' Thus, in the ecosystem of USD1, StakeStone actually assumes a dual role: the official minting channel and the full-chain liquidity hub, providing USD1 with a one-stop portal covering minting to full-chain and full-scenario.
From this perspective, StakeStone taking on USD1 can be seen as a tacit understanding between WLFI and USD1. This interview also hopes to understand the cooperation logic between WLFI/USD1 and StakeStone through Charles's perspective, as well as the fundamental changes occurring in the stablecoin landscape, revealing the key puzzle of this new stablecoin narrative.
At the end of last year, during discussions, why did WLFI choose StakeStone?
When asked why StakeStone became the first DeFi minting provider for USD1, Charles first explained the issuance mechanism of USD1:
Institutional users, after completing KYC verification and other compliance processes, need to deposit dollars into a designated custodial bank account. After WLFI verifies that the funds have arrived, institutions can mint USD1 in minimum units of $100. However, the USD1 balance in this process remains in the account system and has not yet gone on-chain; it must be 'withdrawn' to enter the public chain world. Currently, USD1 officially only supports Ethereum and BNB Chain (with the latter accounting for over 98% of total issuance).
In other words, in the current on-chain environment, USD1 has not achieved native multi-chain deployment. If USD1 is to achieve circulation and use on other chains, there are currently only two methods. One is to rely on the cross-chain bridge launched by the official, but this is far from sufficient; it can only solve the 'cross-chain existence' of assets but cannot construct a complete application scenario. The second is to build an independent full-chain distribution system through partners.
StakeStone is stepping in at this crucial juncture, utilizing its multi-chain distribution and scenario operation capabilities to distribute USD1 across more than 20 chains, achieving native landing and application in multi-chain DeFi scenarios.
According to Charles, StakeStone and the WLFI team began multiple rounds of discussions at the end of 2024. The decision to cooperate was closely related to the asset distribution system that StakeStone has established in the multi-chain ecosystem, as well as its rich experience in blue-chip asset yield integration, which allows USD1 to be quickly introduced into real DeFi application scenarios. This also means that from the moment USD1 was born, StakeStone was not just a 'minting party', but more like a strategic partner for its entry into the multi-chain ecosystem—responsible for achieving the full-chain distribution of USD1 as a core hub, as well as building yield products on various DeFi chains, providing yield certificates, and cultivating the on-chain usage soil for USD1. In the future, we will realize an integrated connection of 'fiat deposit → minting → multi-chain distribution → on-chain and off-chain scenario docking' to build a true one-stop liquidity closed-loop service for USD1.
Here are the related interview questions:
Frank: We see that StakeStone is the 'official full-chain liquidity support partner for USD1 stablecoin'. Can you introduce the specific content of your cooperation with WLFI? What core support and services will StakeStone provide for USD1?
Charles: Currently, we are both the minting service provider for USD1 and deeply involved in its governance ecosystem, taking on the task of constructing full-chain liquidity. Future cooperation plans include:
Payment products: Launch USD1-based payment tools that allow global enterprises to directly receive USD1 through Visa/Mastercard, and connect to traditional banking systems as stablecoins become legal.
Full-chain DeFi yield products: Launch a one-stop full-chain yield product for USD1 on-chain called USD1 LiquidityPad Vault.
CeDeFi products: Simultaneously build USD1CeDeFi products that combine traditional financial institutions' dollar wealth management products with quantitative trading yields.
Compliance channel construction: Apply for payment licenses in multiple countries to create a one-stop exchange path from fiat to USD1, gradually replacing OTC channels.
Frank: Currently, USD1 has high qualification requirements for mint service providers. Why did WLFI choose StakeStone as the first DeFi protocol minting service provider? What prompted this cooperation?
Charles: Our cooperation with the USD1 team began in its private placement phase at the end of last year (Q4 2024), where we participated early in its technological path planning. Based on our successful liquidity distribution experience in multiple projects, the USD1 team recognized our capabilities in building multi-chain ecosystems, leading to a strategic partnership between both parties.
Frank: Previously, StakeStone had not launched any business or products directly related to stablecoins. Does this deep cooperation with USD1 mark StakeStone's official entry into the compliant stablecoin field?
Charles: We indeed did not have stablecoin products before. This cooperation is our first step into the stablecoin infrastructure. In the future, we will definitely develop a complete set of products around USD1, including the USD1 LiquidityPad full-chain liquidity distribution vault, USD1 minting, and stable yield products.
These are actually things that StakeStone is already proficient at. Previously, we mainly served blue-chip assets or public chain assets, but now we will provide a complete set of 'stablecoin as a service' solutions for USD1.
Frank: As the 'first DeFi protocol minting provider for USD1', will ordinary users be able to directly mint or cross-chain exchange USD1 through StakeStone in the future?
Charles: We definitely hope to package this mechanism well. For example, users can bind their bank cards through the StakeStone frontend for direct fiat deposits. The system backend then mints USD1 through our institutional account and bridges it to the target chain selected by the user, achieving a one-stop experience from deposit, minting to distribution.
We are currently laying out compliance licenses in this area, especially in regions like Singapore and Hong Kong where compliance licenses are clearer, to open up payment channels. In the future, users might be able to deposit and exchange USD1 through credit cards, SWIFT, wire transfers, etc.
"The larger application scenarios for USD1 are not in the crypto circle," a new growth paradigm of full-chain liquidity × global liquidity.
"The larger application scenarios for USD1 are not in the crypto circle."
StakeStone is also preparing payment products based on USD1, providing compliant and efficient global aggregation acquiring products for small and medium enterprises, digital nomads, and self-employed individuals.
He believes that the market pointed to by this direction is a larger second half of stablecoins that cannot be ignored. StakeStone aims to provide full-stack support for USD1 as 'stablecoin as a service' and also attempts to evolve it into an 'on-chain dollar API' serving real settlement and global circulation.
Here are the related interview questions:
Frank: The full-chain stablecoin distribution product may seem a bit abstract. Can you give an example of how ordinary users can use USD1 across the entire chain through StakeStone, participate in different ecosystems, and earn yields?
Charles: It can be simply understood as a 'three-step approach.' Users first deposit USD1 into StakeStone's liquidity vault, StakeStone issues yield-bearing stablecoin certificates, and users can then participate in target chain blue-chip DeFi scenarios (such as Morpho, Pendle, etc.) to earn yields through the certificates they hold.
At the same time, StakeStone will distribute the underlying USD1 into the entire chain ecosystem, participating in the deployment of cross-chain multi-yield strategies.
Finally, users can confidently receive full-chain yields through the yield certificates they hold.
Frank: From an ecological cooperation perspective, how do you assess the collaborative value of this StakeStone × USD1 partnership? Does this mean that both parties will form a long-term alliance of stablecoin + liquidity protocol, jointly penetrating multi-chain and cross-regional markets?
Charles: In the future, we will be the one-stop portal for USD1 from minting to distribution.
In the crypto field, we have launched a dedicated LiquidityPad vault for USD1 to help it expand into multi-chain DeFi scenarios. We will also release RWA+CeDeFi products based on USD1 to provide stable yield services. In the traditional finance field, we are advancing applications for payment licenses and partnerships, aiming to achieve a compliant, low-friction path for users to mint USD1 directly from fiat, truly opening the entry point for off-chain funds.
For this closed loop to truly take off and operate smoothly, it still depends on the promotion of three key variables: First is regulatory progress, whether policies such as the US (stablecoin bill) can be smoothly implemented will directly determine the legality of USD1's fiat channels; Second is scenario penetration capability, whether small and medium enterprises, cross-border freelancers, and global trade institutions can adopt USD1 on a large scale as a payment tool; Finally, it is the yield product expansion capability, whether the on-chain yield of USD1 can be further expanded to RWA, government bonds, and other off-chain assets, CeDeFi, etc.
The biggest Alpha in 2025 is 'legal stablecoins', and the true realization of the closed loop depends on the joint drive of regulation, scenarios, and products.
What's the next step?
"The stablecoin industry has entered the second half, and the focus of competition is shifting from volume and traffic to compliance capability and scenario penetration."
In addition to product cooperation, Charles also shared his understanding of the future landscape of the industry regarding stablecoins. He believes that legal stablecoins represent a watershed moment in the cryptocurrency industry, specifically:
The emergence of legal stablecoins will gradually erode the market for traditional fiat currencies in cross-border payments. Because it is clear that crypto stablecoins have lower costs for ledger security maintenance and lower costs for global access.
The emergence of legal stablecoins will end the existing P2P deposit and withdrawal structure, eventually being replaced by licensed foreign exchange companies in various countries.
The emergence of legal stablecoins will blur the business boundaries between traditional banks and Web3 stablecoin asset management projects. In the future, there will only be differences in accounting methods (centralized database accounting vs. on-chain accounting) and regulatory requirements, with their business boundaries becoming increasingly close.
Therefore, StakeStone will firmly embrace the stablecoin market in 2025, especially emerging stablecoins like USD1 that have the most potential to become legal stablecoins.
