This report by Tiger Research analyzes how Stable, as a blockchain focused on USDT, drives the mass adoption of stablecoins through zero gas fee P2P transfers and sub-second settlements.
Key Takeaways
Stable positions itself as the 'Trojan Horse' of the stablecoin market, aiming for mass adoption through USDT-centric infrastructure.
It offers fee-free USDT transfers, sub-second settlement, and a simplified interface to tackle key barriers such as high fees, slow transaction speeds, and complex user operations.
The anticipated plan is to attract users through free, seamless transfer services, then expand into payment, decentralized finance (DeFi) services, and institutional cooperation.
1. Stablecoins: The 'Trojan Horse' into the Market
Stablecoins stealthily entered the cryptocurrency market like a 'Trojan Horse'.
Stablecoins have now evolved into a dominant force in the ecosystem. Initially, they were primarily viewed as tools to reduce volatility. Over time, stablecoins have become a core component of market infrastructure.
In the USDT-dominated stablecoin market, the circulating supply exceeds $150 billion, with over 350 million users and transaction volumes even surpassing Visa. The circulating supply exceeds $150 billion, with over 350 million users.
Their development embodies the bridging role between traditional finance and digital finance. In centralized exchanges, they are the primary medium for converting fiat currency to cryptocurrency. In decentralized finance (DeFi), they serve as benchmark assets for providing liquidity and lending. For cross-border remittances, they offer a faster and more economical option than traditional banks.
The shift in market behavior is striking. Early cryptocurrency trading relied on direct token-to-token transactions, such as BTC/ETH or BNB/ETH, with value measured in Bitcoin. Today, trading pairs like BTC/USDT and ETH/USDT dominate. The yields of decentralized finance (DeFi) are often priced in USDT. In certain regions of Southeast Asia and Latin America, USDT is increasingly used for direct payments, replacing physical dollars.
The market once relied on volatile token valuations, but stablecoins have now become a universal unit of account.
They were initially introduced due to demand and have now become the central axis of the cryptocurrency ecosystem.
2. The Shadow of Growth: Limitations of Emerging Infrastructure
Rapid expansion has also exposed structural weaknesses. The current stablecoin infrastructure faces three critical constraints.
1. Unpredictable High Transaction Fees
Stablecoins operate across multiple blockchain networks, but when the network is congested, fees soar, making micro-transactions impractical. In some cases, sending $10 could incur $20 in fees. This undermines the core utility of stablecoins as a medium for everyday payments.
2. Slow Settlement Times
On Ethereum, confirmation of stablecoin transactions can take several minutes or longer, depending on network conditions. Real-time settlement is crucial for use cases like online checkouts or physical retail, and such delays are unacceptable.
3. Complex User Experience
Managing gas fees, wallets, and private keys still presents a high entry barrier for average users. For consumers accustomed to simple payment interfaces like PayPal, the current use of stablecoins remains overly complex.
These infrastructural limitations pose significant obstacles to the next stage of stablecoin adoption. Ironically, within the cryptocurrency ecosystem, stablecoins have already become the de facto benchmark asset, yet their everyday usage remains very low for average users.
Stablecoins have completed their initial role as a 'Trojan Horse,' bringing stability to a turbulent market and occupying a central position in the ecosystem.
The next challenge is to break into the traditional financial market and mainstream consumer payment areas in the cryptocurrency space. Achieving this requires fundamentally addressing current technical limitations, necessitating a new 'Trojan Horse' strategy.
3. Stable: The New 'Trojan Horse'
Creating a new 'Trojan Horse' for the market does not require inventing another stablecoin. Stablecoins are merely tools pegged to the dollar. The next 'Trojan Horse' is dedicated infrastructure built for existing stablecoins, especially those that already dominate the market.
This is where Stable comes into play. Unlike generic blockchains, Stable is a blockchain specifically designed for USDT. It does not simultaneously support USDT and other tokens but serves as a high-speed network dedicated to USDT transactions.
Stable's mission has three aspects:
Waiving P2P USDT transfer fees: Completely eliminate fees for P2P USDT transfers, addressing the inefficiency where even a $10 transfer in the existing network may incur excessively high fees.
Achieving sub-second settlements: All transactions are settled within a second, eliminating common wait times in physical and online retail payments.
Simplifying the user experience: Hiding fee calculations and wallet management to achieve intuitive operations without technical burdens.
The key is that these improvements are interrelated. Waiving fees simplifies the user experience, while faster transaction processing enhances practicality in real-world commerce. Together, these factors lay the foundation for stablecoins to expand from the cryptocurrency ecosystem to the mainstream payment market.
Stable's vision is not merely to become another blockchain but to serve as the infrastructure core supporting the USDT ecosystem valued at $160 billion.
It aims to address the structural limitations of the current stablecoin infrastructure, including unpredictable fees, slow settlement speeds, and complex user interfaces. This approach moves away from the fragmented model where each chain independently supports USDT, towards a unified environment optimized for USDT operations.
4. How the Stable Architecture Works
To realize Stable's core vision, multiple technical elements must align. Stable is currently still in the testnet phase, with the team preparing for the official launch. Its expected architecture clearly demonstrates the operational structure of the system.
4.1 No-Fee USDT0 Transfers: EIP-7702 and Account Abstraction
The stable network operates with two types of tokens.
USDT0 represents USDT brought in from external networks through cross-chain bridges. gasUSDT is a network fee payment token pegged 1:1 to USDT0, used solely for transaction fees. Both can be exchanged 1:1 for actual USDT.
To achieve fee-free P2P transfers, Stable leverages EIP-7702 and account abstraction technology. Its key advantage is that users only need to hold USDT0 to conduct all transactions.
In current blockchain systems, there are two separate account types:
Externally Owned Accounts (EOA): Standard wallets (e.g., MetaMask) are controlled by private keys and can sign transactions but have limited functionality.
Contract Accounts (CA): Smart contracts that can execute complex logic but cannot independently initiate transactions.
Account abstraction merges these account types, allowing standard wallets to possess smart contract functionalities. This enables users to specify operations like 'pay fees with USDT' or 'request fee waivers'.
The first standard to address this issue is ERC-4337. It requires creating a new smart wallet and transferring funds from the existing wallet, a process prone to user operational errors.
Previous Method: Create a new smart wallet → Transfer funds from the existing wallet → Use the new address
EIP-7702: Retain existing wallets → Add smart contract functionality → Keep the same address
EIP-7702 enables smart functionality on existing wallet addresses without transferring funds, eliminating the migration step. Users can continue using their existing MetaMask wallets and add smart features.
In Stable, all wallets natively support EIP-7702, enabling smart wallet functions without extra setup. This includes features like transaction fee sponsorship that are available directly in existing wallets.
Example:
Ryan sends 100 USDT0 to Jay via MetaMask.
Wallets supporting EIP-7702 request to waive a fee.
The fee is borne by the payer.
Ryan's balance decreases by 100 USDT0, while Jay receives the full amount.
Without deducting fees, Ryan does not need to hold or calculate costs, similar to sending money via PayPal. This eliminates the need to hold separate fees or manually calculate costs.
4.2. Sub-Second Transaction Finality
Stable uses the StableBFT consensus algorithm to generate a block approximately every 0.7 seconds and finalizes transactions after a single confirmation. This eliminates the common "pending" phase in many blockchain transactions, providing an experience similar to instant approval at payment terminals.
To further increase speed, Stable is developing Block-STM parallel processing technology, which can execute independent transactions simultaneously, accounting for approximately 60% to 80% of network activity. This approach is similar to setting up multiple checkout counters in a store to reduce wait times.
In the long term, Stable plans to upgrade to a consensus mechanism based on Autobahn DAG. This structure allows multiple blocks to be proposed simultaneously and separates data propagation from sorting, thus reducing bottlenecks. Internal tests recorded a transaction processing rate of up to 200,000 transactions per second, although this is still in pre-production.
4.3. Simplified User Experience
Stable eliminates the need to calculate fees and manage separate fee tokens while maintaining compatibility with existing Ethereum. This allows users to continue utilizing familiar tools like MetaMask and Etherscan without additional learning costs.
In addition to simple compatibility, these tools also feature USDT-optimized functions, operating more smoothly: MetaMask supports fee-free USDT0 transfers, while Etherscan presents USDT transaction records in a more intuitive format.
This is akin to keeping all existing applications while upgrading to a new smartphone. Users retain a familiar environment but gain enhanced functionality.
Moreover, USDT from other networks can be seamlessly imported via existing LayerZero cross-chain bridges. USDT0 adopts LayerZero's OFT (Omnichain Fungible Token) standard, eliminating the complexities of traditional bridging. In traditional models, each network maintains separate versions of USDT, leading to liquidity fragmentation.
With the OFT standard, a single USDT0 has the same functionality across all networks. Whether bridged from Ethereum or Arbitrum, the resulting token is the same USDT0, eliminating liquidity fragmentation and simplifying asset transfers.
The planned development projects include a Stable Name System, which will replace complex wallet addresses with human-readable names, further enhancing usability. Similar to email addresses, users can send funds to identifiers like "ryan.stable" or "jay.stable." Although still in the planning stage, implementation and popularization may take some time. Technically, it is expected that the system will adopt a structure similar to Ethereum Name Service (ENS) and add features optimized for USDT transactions.
4.4. Additional Technical Components
The network is also developing StableDB, a dedicated database architecture that separates state submission from state storage.
In most blockchains, new blocks must be fully written to disk before the next block can be processed, and slow disk writes can cause processing delays. StableDB eliminates this bottleneck by first confirming execution results in memory and then parallelly writing them to disk.
This structure is enhanced by memory-mapped file input/output (mmap), which directly links files stored on disk to the operating system's memory space. This allows frequently accessed data to be read and written as if it were in memory, bypassing slower disk access and significantly improving processing speed. Its effect is similar to a busy restaurant where staff quickly note down orders and later input them into the point-of-sale system, allowing the kitchen to start preparing immediately.
For enterprise clients, Stable plans to introduce a 'Guaranteed Blockspace' feature, which is a specially allocated transaction capacity that ensures stable throughput regardless of network congestion, similar to a bus lane on a highway. Additionally, a confidential transfer feature is being developed to hide transaction amounts while still meeting anti-money laundering (AML) and KYC compliance requirements. Looking ahead, the current execution engine written in Go will be replaced by a C++ version called StableVM++, which aims for lower-level memory control and performance optimization, targeting execution speeds to increase up to six times.
5. Expansion Scenarios for the Stable Ecosystem
Stable positions itself as the new Trojan Horse.
Fee-free USDT transfers, sub-second settlements, and a simplified user experience serve as entry-level incentives. This loss-leading strategy aims to drive mass adoption. Once a user base is established, revenue can be generated through a range of ancillary services.
From this basis, three main expansion paths seem possible.
5.1. Scenario One: Expansion of Institutional Services and Cooperation
Stable can expand its ecosystem by developing institutional services and partnerships. A key factor is to provide high-quality services like 'guaranteed block space' to ensure low costs and high reliability.
This strategy is very effective in corporate cross-border settlements. Using Stable instead of traditional international transfer methods can significantly reduce time and costs. However, during peak periods like the end of the month, processing speed becomes crucial. Dedicated block space ensures that processing speed remains consistent, and companies are willing to pay extra for this reliability.
The same logic applies to fintech cooperation. Remittance companies like Limitless and Wise can provide better services to their customers by integrating Stable's infrastructure. In turn, Stable can charge fees based on transaction volume.
The same is true for cryptocurrency exchanges. By using Stable for USDT deposits and withdrawals, exchanges gain a reliable partner. While individual users can use the service for free, the true business goal is high-volume institutional traders.
5.2. Scenario Two: Rapid Growth of On-Chain Service Ecosystem
Free transfers and high-speed transmission will significantly boost the usage of on-chain services. Today on Ethereum, even a $10 DeFi transaction incurs high fees. However, on Stable, small-scale DeFi activities become economically viable.
Users can provide $100 in liquidity or stake at a very low cost, which will expand the user base of DeFi. Stable will charge smart contract execution fees from these activities, and as transaction volume grows, its overall scale will also expand.
A more notable change is the emergence of new on-chain services. Real-time micro-payments will enable direct transactions for blockchain-based content subscriptions, in-game item purchases, and tipping. Tipping a YouTube creator $1 or paying $0.10 for a news article has now become possible.
Once such a micro-payment ecosystem forms, transaction numbers will grow exponentially. Individual fees may be small, but overall transaction volume will reach a considerable level.
5.3. Scenario Three: Deep Integration with the Real Economy
The most ambitious scenario is for stablecoins to become the standard payment method in the real economy. In Southeast Asia and Latin America, USDT payments are on the rise, but high fees and slow speeds limit the applications of stablecoins.
If Stable can resolve these issues, offline commerce may change rapidly. Paying $2 for a coffee in a café in Vietnam, or using USDT to buy daily necessities at a convenience store in the Philippines, could become commonplace.
This will fundamentally change Stable's business model from a blockchain network to a global payment infrastructure provider. It will be able to provide payment terminals for merchants and digital wallets for consumers while charging fees from both ends.
By charging a minimum fee for each USDT transaction processed through the Stable network, it can establish a stable income base as transactions grow.
Delays in the promotion of central bank digital currencies (CBDCs) have also created opportunities. If private stablecoins are more convenient and accessible than government-issued digital currencies, users will naturally choose the former.
6. The True Strategy of Stable
Stable's strategy is clear: attract users through free USDT transfers and a convenient user experience. As the ecosystem grows, build business models around the emerging diversified services.
A single transaction may not generate huge revenue, but the rapid growth in transaction volume will form a considerable overall scale. This is similar to Amazon's early strategy of acquiring customers by selling books at near-cost prices, and then making substantial profits through cloud services and advertising.
Free transfers are just bait. The real goal is to become the central hub of the USDT ecosystem, making all transactions go through Stable. Once network effects are established, users will find it difficult to switch to other platforms.
Ultimately, Stable has achieved a solid market position. This is the true strength of the new 'Trojan Horse'.
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