Stable: The new USDT Trojan Horse of the stablecoin era

Author: Ryan Yoon, Source: Tiger Research, Translated by: Shaw Golden Finance

Summary

• Stable positions itself as the "Trojan Horse" of the stablecoin market, aiming for mass adoption through USDT-centered infrastructure.
• It offers fee-free USDT transfers, sub-second settlement, and a simplified interface to address key barriers such as high fees, slow transaction speeds, and complex user operations.
• The expected plan is to attract users through free and seamless transfer services, and then expand into payments, decentralized finance (DeFi) services, and institutional partnerships.

1. Stablecoins: The "Trojan Horse" into the Market

Stablecoins quietly entered the cryptocurrency market, like a "Trojan Horse."

Stablecoins have now developed into a dominant force within the ecosystem. Initially, they were primarily seen as tools for reducing volatility. Over time, stablecoins have evolved into a core component of market infrastructure.

The USDT-dominated stablecoin market has a circulating supply of over 150 billion USD, with more than 350 million users, and its trading volume even exceeds that of Visa. The circulating supply exceeds 150 billion USD, and the number of users exceeds 350 million.

Their development reflects the bridging role between traditional finance and digital finance. In centralized exchanges, they are the primary medium for the conversion between fiat currencies and cryptocurrencies. In the decentralized finance (DeFi) space, they serve as benchmark assets for providing liquidity and lending. For cross-border remittances, they offer a faster and more cost-effective option than traditional banks.

The shift in market behavior is noteworthy. Early cryptocurrency trading relied on direct token-to-token exchanges, such as BTC/ETH or BNB/ETH, with value referenced in Bitcoin. Today, trading pairs like BTC/USDT and ETH/USDT dominate the market. The yields from decentralized finance (DeFi) are often denominated in USDT. In certain regions of Southeast Asia and Latin America, USDT is increasingly being used for direct payments, replacing physical dollars.

The market once relied on the volatile valuation of tokens, but now stablecoins have become the universal unit of account.

They were originally 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 key constraints.

1. Unpredictably high transaction fees

Stablecoins operate across multiple blockchain networks, but when the network becomes congested, transaction fees can skyrocket, making small transactions impractical. In some cases, sending $10 could incur a fee of $20. This undermines the core utility of stablecoins as a medium for everyday payments.

2. Slow settlement time

On Ethereum, the confirmation of stablecoin transactions can take several minutes or even longer, depending on network conditions. For use cases such as online checkout or physical retail, real-time settlement is crucial, and such delays are unacceptable.

3. Complex User Experience

Managing gas fees, wallets, and private keys still presents a high entry barrier for ordinary users. For consumers accustomed to simple payment interfaces like Paypal, the current methods of using stablecoins remain overly complex.

These infrastructural limitations constitute a significant obstacle to the next phase of stablecoin adoption. Ironically, within the cryptocurrency ecosystem, stablecoins have long become the de facto benchmark asset, yet their everyday usage rate remains very low for regular users.

Stablecoins have fulfilled their initial role as a "Trojan horse", bringing stability to volatile markets and occupying a central position in the ecosystem.

The next challenge is to break into the cryptocurrency field and penetrate the traditional financial market and mainstream consumer payment areas. To achieve this goal, it is essential to fundamentally address the current technical limitations, which requires 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 US dollar. The next "Trojan Horse" is the specialized infrastructure built for existing stablecoins, especially those that already dominate the market.

This is where Stable comes into play.** Unlike general-purpose blockchains, Stable is specifically designed for USDT.** It does not support USDT along with other tokens but serves as a high-speed network dedicated exclusively to USDT transactions.

Stable's mission has three aspects:

• Cancellation of P2P USDT Transfer Fees: Completely waive the fees for P2P USDT transfers, addressing the inefficiency issue where even a $10 transfer may incur excessive fees in the existing network.
• Achieve sub-second settlement: All transactions are completed within one second, eliminating the common wait times found in both physical and online retail payments.
• Simplify User Experience: Hide fee calculations and wallet management for intuitive operations without technical burdens.

The key is that these improvements are interconnected. Eliminating transaction 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 into the mainstream payment market.

The vision of Stable is not just to become another blockchain, but to be the core infrastructure supporting the USDT ecosystem with a market value of 160 billion dollars.

It aims to address the structural limitations of existing stablecoin infrastructure, including unpredictable fees, slow settlement speeds, and complex user interfaces. This approach moves away from the fragmented model of each chain independently supporting USDT, towards a unified environment optimized specifically for USDT operations.

IV. How the Stable Architecture Works

In order to achieve the core vision of Stable, multiple technical elements must be coordinated. Stable is currently still in the testnet phase, and the team is preparing for the official launch. Its expected architecture clearly demonstrates the operating structure of the system.

4.1 No transaction fee USDT0 transfer: EIP-7702 and account abstraction

The stable network operates with two types of tokens.

USDT0 represents USDT introduced from external networks via cross-chain bridges. gasUSDT is a network fee payment token that is pegged to USDT0 at a 1:1 ratio and is used solely for transaction fees. Both can be exchanged 1:1 for actual USDT.

To achieve fee-free P2P transfers, Stable utilizes EIP-7702 and account abstraction technology. Its key advantage is that users only need to hold USDT0 to conduct all transactions.

In the current blockchain system, there are two independent account types:

• Externally Owned Account (EOA): Standard wallets (e.g., MetaMask) controlled by a private key, capable of signing transactions but with limited functionality.
• Contract Account (CA): A smart contract that can execute complex logic but cannot initiate transactions independently.

Account abstraction combines these types of accounts, enabling standard wallets to have the functionalities of smart contracts. This allows users to specify actions such as "pay fees with USDT" or "request fee exemption".

The first standard to address this issue is ERC-4337. It requires the creation of a new smart wallet and the transfer of funds from an existing wallet, a process that is prone to user operational errors.

• Previous Method: Create a new smart wallet → Transfer funds from an existing wallet → Use the new address
• EIP-7702: Retain existing wallet → Add smart contract functionality → Keep the same address

EIP-7702 enables smart functionalities on existing wallet addresses without the need to transfer funds, thereby eliminating the migration step. Users can continue to use their existing MetaMask wallet and add smart features.

In Stable, all wallets natively support EIP-7702, enabling smart wallet functionality without additional setup. This includes features such as transaction fee sponsorship, which are available directly in existing wallets.

Example:

1. Ryan sends 100 USDT0 to Jay via MetaMask.
2. Wallets supporting EIP-7702 request a waiver for a transaction fee.
3. The fees shall be borne by the payer.
4. Ryan's balance decreased by 100 USDT0, while Jay received the full amount.

No handling fees are deducted, and Ryan does not need to hold or calculate fees, similar to remitting through PayPal. This eliminates the need to hold handling fees separately or calculate fees manually.

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 found in many blockchain transactions, providing an experience similar to instant approval from payment terminals.

To further improve speed, Stable is developing Block-STM parallel processing technology, capable of executing independent transactions simultaneously, which account for approximately 60% to 80% of network activity. This approach is similar to setting up multiple checkout counters in a store to reduce waiting time.

In the long run, the Stable plan will upgrade to a consensus mechanism based on the Autobahn DAG. This structure allows for multiple blocks to be proposed simultaneously, separating data propagation from sorting, thereby reducing bottlenecks. Internal testing has recorded a transaction processing capacity of up to 200,000 transactions per second, although this is still in the pre-production stage.

4.3. Simplified User Experience

Stable eliminates the need to compute transaction fees and manage separate fee tokens, while maintaining compatibility with existing Ethereum. This allows users to continue using familiar tools, such as MetaMask and Etherscan, without additional learning costs.

In addition to simple compatibility, these tools also have features optimized for USDT, making transactions smoother: MetaMask supports USDT0 transfers without transaction fees, while Etherscan displays USDT transaction records in a more intuitive format.

This is like upgrading to a new smartphone while keeping all existing applications. Users retain a familiar environment but gain enhanced features.

In addition, USDT from other networks can be seamlessly imported through the existing LayerZero cross-chain bridge. USDT0 adopts LayerZero's OFT (Omnichain Fungible Token) standard, eliminating the complexities of traditional bridging. In the traditional model, each network maintains a separate version of USDT, resulting in fragmented liquidity.

With the OFT standard, a single USDT0 functions identically across all networks. Whether bridged from Ethereum or Arbitrum, the final generated token is the same USDT0, thereby eliminating liquidity fragmentation and simplifying asset transfers.

The planned development project includes the Stable Name System (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 such as "ryan.stable" or "jay.stable." Although still in the planning stage, implementation and adoption may take some time. Technically, the system is expected to adopt a structure similar to the Ethereum Name Service (ENS), with added 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 the execution results in memory and then writing them to disk in parallel.

This structure is enhanced through 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 jot down orders and later input them into the point-of-sale system, allowing the kitchen to start preparing immediately.

For enterprise customers, the Stable plan will introduce the "Guaranteed Blockspace" feature, which is a dedicated transaction capacity that ensures stable throughput regardless of network congestion, similar to a bus lane on a highway. Additionally, a privacy transfer feature is also under development 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++. This upgrade will achieve lower-level memory control and performance optimization, aiming to increase execution speed by up to six times.

5. Expansion Scenarios of the Stable Ecosystem

Stable positions itself as the new Trojan Horse.

Fee-free USDT transfers, sub-second settlement, and a simplified user experience are 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 auxiliary services.

From this foundation, it seems there are three main expansion paths.

5.1. Scenario One: Expansion of Institutional Services and Cooperation

Stable can expand its ecosystem through institutional services and collaborations. A key factor is to provide high-quality services such as "guaranteed block space" to ensure low costs and high reliability.

This strategy is very effective in cross-border settlement for enterprises. Using Stable instead of traditional international transfer methods can significantly reduce time and costs. However, during peak periods such as the end of the month, processing speed becomes crucial. Dedicated blockchain space can ensure consistent processing speed, and enterprises are willing to pay extra for this reliability.

The same logic applies to fintech collaborations. Remittance companies like Limitless and Wise can provide better services to customers by integrating Stable's infrastructure. In turn, Stable can charge fees based on the transaction volume.

Cryptocurrency exchanges are no exception. By using Stable for USDT deposits and withdrawals, the exchange has gained a reliable partner. While individual users can use the service for free, its true business objective is high-volume institutional traders.

5.2. Scenario Two: Rapid Growth of On-Chain Service Ecosystem

Free transfers and high-speed transmissions will significantly enhance the usage rate of on-chain services. Nowadays, even a $10 DeFi transaction on Ethereum incurs high fees. However, on Stable, small-scale DeFi activities have become economically viable.

Users can provide liquidity or stake with a very low cost of 100 dollars, which will expand the user base of DeFi. Stable will charge smart contract execution fees from these activities, and as the trading volume grows, its overall scale will also expand.

A more significant change is the emergence of new on-chain services. Real-time micropayments will enable direct transactions for blockchain-based content subscriptions, in-game item purchases, and tipping. It has become possible to tip YouTube creators $1 or pay $0.10 for a single news article.

Once such a micro-payment ecosystem is formed, the number of transactions will grow exponentially. The fee for each transaction may be small, but the 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 costs and slow speeds limit the application of stablecoins.

If Stable can solve these problems, offline commerce may change rapidly. Paying $2 for a cup of coffee in a café in Vietnam or using USDT to buy daily necessities in a convenience store in the Philippines could become the norm.

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, digital wallets for consumers, and charge fees from both sides.

By charging a minimum fee on every USDT transaction that goes through the Stable network, it can establish a stable revenue base while transaction growth occurs.

The delay in the promotion of central bank digital currencies (CBDCs) has also created opportunities. If private stablecoins are more convenient and accessible than government-issued digital currencies, users will naturally opt for the former.

6. The Real Strategy of Stable

The strategy of Stable is clear: attract users through free USDT transfers and a convenient user experience. As the ecosystem grows, build business models around the emerging diverse services.

A single transaction may not yield huge profits, but the rapid increase in trading volume can create a considerable overall scale. This is similar to Amazon's early strategy of acquiring customers by selling books at nearly cost price and then generating 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 the network effect is formed, it will be difficult for users to switch to other platforms.

In the end, Stable has secured a solid market position. This is the true strength of the new 'Trojan Horse'.