1. What is USD1? Why is it so popular?
USD1 is a stablecoin launched by the Trump family through the decentralized finance (DeFi) project 'World Liberty Financial (WLFI)', which went live in early 2025, claiming to be pegged to the U.S. dollar at a 1:1 ratio, aiming to achieve a 'seamless bridge' between fiat and digital assets. In simple terms, it is a digital dollar, supported by U.S. Treasury bonds, dollar deposits, and other assets, which sounds very 'orthodox'. Moreover, with the Trump family holding a 60% stake and the backing of major platforms like Binance, USD1 sparked market discussions as soon as it was launched. Why is it popular? There are three reasons:
The Trump Halo: Trump's personal brand effect inherently brings traffic; his political influence and 'America First' slogan give USD1 an expectation of policy backing.
Binance's Support: USD1 is issued on the BNB chain, and Binance directly launched the USD1/USDT trading pair, also providing a full suite of support, including zero-fee withdrawals, financial products, and leverage, essentially paving the way for USD1.
Market Performance is Impressive: From a market cap of $130 million at the end of April 2025 to a skyrocketing $2.1-2.2 billion by mid-May, USD1 has surged to become the seventh largest stablecoin globally in just two months, an astonishing growth rate.
2. USDT and USDC: The 'Two Giants' of the Stablecoin Market
To determine whether USD1 can shake the foundations of USDT and USDC, we must first look at the fundamentals of these two 'big brothers':
USDT (Tether):
Market Position: The largest stablecoin globally, with a market cap of $149 billion (2025 data), occupying over 70% of the market share.
Characteristics: USDT is issued by Tether and started early (2014), with a huge first-mover advantage. Its liquidity in global exchanges is unmatched, making it almost the 'hard currency' of the crypto market.
Advantages: Extensive ecosystem support (multi-chain deployment, Tron, Ethereum, etc.), huge trading volume, favored by both retail and institutional users.
Controversy: Tether's reserve transparency has always been questioned, and its compliance is often 'watched' by regulators.
USDC (Circle):
Market Position: The second largest stablecoin, with a market cap of $61 billion, backed by Coinbase and Circle, with compliance being its ace.
Characteristics: USDC focuses on 'transparency + compliance', with reserve assets mainly in U.S. Treasury bonds and cash, publishing monthly audit reports, earning deep trust from U.S. regulators.
Advantages: Institutional-friendly, suitable for compliance projects in the Web3 ecosystem, such as DeFi protocols and NFT markets.
Shortcomings: Compared to USDT, USDC's global adoption and trading volume are slightly inferior, and retail user stickiness is not as strong as USDT.
In short, USDT dominates with 'first-mover + widespread adoption', while USDC steadily advances with 'compliance + trust'. Both have very deep market moats.
3. The Potential of USD1: What Makes it Challenge the Two Giants?
For USD1 to break into the forefront of stablecoins, it relies not only on Trump's name. Here are its key 'killer features':
Support from the BNB Chain Ecosystem:
USD1 is primarily issued on the BNB chain and plans to deploy on Ethereum and Tron, with rapid ecosystem expansion.
The full support of Binance (zero fees, financial products, etc.) has rapidly improved USD1's liquidity, with its 24-hour trading volume ranking among the top.
In comparison, although USDT and USDC are deployed across multiple chains, USD1 enjoys a 'home court advantage' with Binance, potentially gaining an edge in the DeFi ecosystem of the BNB chain.
Trump's 'Traffic Code':
The brand effect of the Trump family gives USD1 an inherent topic of discussion, and discussions about USD1 on social media (such as the X platform) are very heated, attracting many retail investors and speculators.
For example, the $B token heavily invested in by the WLFI project rose from $0.04 to $0.29, which also boosted the popularity of USD1.
4. The Challenges of USD1: It's Not So Simple to Turn the Tables
Although USD1 is making significant strides, it faces several substantial challenges in shaking USDT and USDC's positions:
The gap in market share is enormous:
USDT ($149 billion) and USDC ($61 billion) have market caps that overshadow USD1 ($2.2 billion).
USDT's first-mover advantage and deep integration with global exchanges have made it almost the 'U.S. dollar' of the crypto market. For USD1 to capture market share, it's akin to a new brand challenging Coca-Cola.
Insufficient Ecosystem Stickiness:
USDT and USDC have deeply cultivated ecosystems in DeFi, NFTs, cross-chain bridges, and other Web3 scenarios for many years, establishing a solid ecological foundation. Although USD1 has the support of Binance, its adaptation to other public chains and protocols has just begun, making it difficult to form a wide ecological network in the short term.
Users on X comment: USDT's first-mover advantage and market share make it very difficult for USD1 to shake its position, and it may even be more of a 'tactic against Tether' rather than a true disruptor.
Regulatory Uncertainty:
While USD1 focuses on compliance, the U.S. regulatory environment is complex, and the involvement of the Trump family could spark controversy, such as being questioned for 'politicization' or 'interest transfer'.
If regulatory policies tighten, USD1's rapid expansion may be limited, especially when it wants to attract global users and may face regulatory resistance from other countries.
Trust Issues:
Despite USD1 being backed by U.S. Treasury bonds, the Trump family's 'controversial nature' may lead some users to be skeptical. In contrast, the transparent audits of USDC and the reputation of Coinbase are more likely to win institutional trust.
Some on X openly stated: The hype surrounding USD1 is significant, and its long-term competitiveness is questionable.
6. The Stablecoin Battlefield of 2025: How Far Can USD1 Go? Overall, USD1 has potential, but it will be very challenging to shake the dominant positions of USDT and USDC in the short term. The reasons are three:
Market Inertia: The 'hard currency' status of USDT and the compliance advantages of USDC have established deep user habits and ecological barriers. USD1 needs time to build trust and an ecosystem.
Regulatory Game: Although USD1 has policy advantages, the overall attitude of U.S. regulators toward stablecoins remains unclear, and the mature operations of USDT and USDC may better cope with the complex environment.
User Choice: Retail investors prefer highly liquid USDT, while institutions trust the transparency of USDC. Although USD1's ToB positioning is differentiated, its coverage is limited.
Optimistic Prediction: If the Trump family continues to exert effort and Binance's ecosystem integrates deeply, USD1 could break into the top five by the end of 2025, potentially challenging USDC for the second position, especially in the DeFi and institutional market of the BNB chain.
Pessimistic Prediction: If regulatory obstacles arise or the market lacks trust in the Trump brand, USD1 may only be a flash in the pan, becoming a 'politicized' speculative product.
7. Insights in the Web3 Scene
In the Web3 world, stablecoins are the lifeblood of DeFi, NFTs, and cross-chain transactions. The emergence of USD1 represents the ambition of traditional political forces to intervene in decentralized finance. Its success depends not only on technology or the market but also on:
Policy Trends: How will U.S. regulation of stablecoins evolve? Will it favor 'pro-American' projects?
Ecosystem Competition: Can USD1 establish a foothold on public chains like Ethereum and Solana?
User Trust: Can Trump's brand be transformed into a long-term trust asset?
For Web3 players, USD1 is a short-term hotspot for speculation, and one can pay attention to USD1-related projects in the Binance ecosystem (such as the $B token or DeFi pools). However, long-term investment will depend on its ecosystem expansion and regulatory developments.
