Written by: Glendon, Techub News
After the official signing of the U.S. stablecoin bill (GENIUS Act), the expansion of the stablecoin market has been rapid and remarkable. As of September 15, the supply of stablecoins on Ethereum has reached $168 billion, setting a new historical high. Meanwhile, this sector has welcomed another heavyweight player.
Last night, MetaMask officially launched its native stablecoin, MetaMask USD (mUSD), announcing its entry into the market. In a tweet, MetaMask pointed out that users can make low-cost fiat deposits through MetaMask, and mUSD is now supported for MetaMask Swap and Bridge transactions, as well as for spending at over 150 million merchants worldwide via the MetaMask Card.
MetaMask first announced on August 21 that it would launch its first native stablecoin, mUSD, later this year. However, the stablecoin has gone live sooner than the market expected. This "acceleration" may be driven by the rapid development of the stablecoin market prompting MetaMask to act quickly, or there may be other underlying reasons.
Before diving deeper, let's quickly understand mUSD.
mUSD is jointly issued by Stripe's Bridge platform and the stablecoin minting protocol M0, backed 1:1 by cash and high-liquidity assets such as short-term U.S. Treasury bonds to ensure price stability. mUSD will initially be launched on Ethereum and the Layer 2 network Linea developed by Consensys, utilizing M0's liquidity network to achieve real-time transparency and cross-chain composability.
MetaMask has announced that mUSD is the first stablecoin launched directly from a self-custody cryptocurrency wallet and will serve as the default dollar unit in its ecosystem. This move, from MetaMask's own development perspective, helps enhance the platform's liquidity and protocol utility, attracting more users and capital inflow; for MetaMask's user base of over 100 million, the launch of mUSD can lower the barriers and resistance to using stablecoins.
In this regard, MetaMask's Vice President of Product Strategy, Ajay Mittal, further explained in an interview that the conventional model for most stablecoins is to issue first and then integrate into wallets, whereas mUSD disrupts this model as it is MetaMask's native currency. This means mUSD is not only a means of value storage but also a fundamental unit designed to support various aspects of the MetaMask experience, including issuance, exchange, cross-chain transactions, and payments.
From market data, the latest figures from the M0 website show that the circulating supply of mUSD at launch reached approximately 24.32 million tokens; according to Coingecko data, the trading volume of mUSD in the first 16 hours since its launch was about $41.88 million. This performance meets expectations, but it is clear that the market is still in a wait-and-see phase.
Under MetaMask's announcement of mUSD, we can see many users raising questions, such as "Why should we choose mUSD over USDC?" and "Can I earn APR (annual percentage rate) by holding this product?"
These questions regarding yield undoubtedly reflect the voices of many users, who are closely watching whether mUSD can provide APR. Although as of now, MetaMask has not announced specific plans regarding APR, Ajay Mittal previously stated that the best incentive for holding mUSD lies in its ability to bring a better experience to the DeFi space. Moreover, over time, the team may introduce additional incentives to reward early supporters of mUSD.
In addition, MetaMask is planning to deeply integrate with Linea's DeFi stack, involving lending markets, decentralized exchanges, and custodial platforms to inject liquidity into the entire ecosystem.
And Linea may be the underlying reason for MetaMask's decision to launch mUSD at this time.
On September 10, Linea officially launched the TGE (Token Generation Event) for LINEA, issuing a total of 72 billion LINEA tokens. Of these, 61.2 billion tokens (85%) will be allocated to the ecosystem for community development, infrastructure building, and support for Ethereum public goods, with 75% of the ecosystem fund to be gradually released over the next 10 years; another 7.2 billion tokens (10%) will be airdropped to early users, builders, and participants in the MetaMask ecosystem, with this portion of tokens fully unlocked and without a lock-up period.
According to Dune data statistics, the total amount of this round of airdrops from Linea is approximately 9.36 billion tokens, with nearly 750,000 eligible addresses, among which 208 addresses received over 1 million LINEA tokens in airdrops, with the highest address receiving about 137 million tokens. However, the LINEA airdrop does not seem to have satisfied investors, and the ecological value of the Linea network lacks sufficient appeal, leading to an unfavorable market situation for LINEA tokens. Coingecko data shows that as of the time of writing, LINEA tokens are priced at $0.2759, with a decline of over 10% in the past 24 hours and more than 21% in the past 7 days. This indicates a severe situation of investors selling off LINEA, reflecting a significant lack of confidence.
Previously, to prevent investors from selling off, Consensys founder Joseph Lubin tweeted that holding Linea tokens would provide opportunities for more rewards, primarily distributed in the form of other tokens, some from Consensys and some from partnership agreements. He emphasized that MetaMask and Linea are working hard to achieve this goal and will jointly guide the economic model of Linea tokens.
From multiple perspectives, the launch of mUSD has positive implications for the Linea ecosystem. mUSD can strengthen the financial infrastructure of the Linea ecosystem. As a core product of ConsenSys, the stablecoin mUSD launching on the Linea network will directly provide a fiat entry and payment scenarios for the LINEA token economy, enhancing its ecological liquidity; mUSD supports MetaMask Swap and Bridge transactions, which can also lower the cost for users to exchange LINEA.
More importantly, mUSD will promote synergy within the ConsenSys ecosystem. ConsenSys plans to build a "wallet + Layer2 + stablecoin" ecological closed loop through MetaMask and Linea. Once mUSD is launched, some users on MetaMask will use mUSD to participate in various activities within the Linea ecosystem, such as DEX trading and lending. In the long run, through the synergy of mUSD and LINEA, ConsenSys may funnel stablecoin trading fees, cross-chain revenue, and other income back into the ecological fund to support the long-term development of Linea. Additionally, MetaMask may introduce APR incentives for holding mUSD in the future, which will complement the LINEA reward program.
Returning to mUSD itself, its initial performance has been relatively stable, but users still have doubts, prompting mUSD to clarify its differentiation from USDC, such as lower transaction fees and MetaMask native privileges.
In summary, the launch of mUSD is not only an important step for Consensys to enter the stablecoin market but also an effective way to support the development of the Linea ecosystem. So, can mUSD bring new development opportunities for both ecosystems? Let's wait and see.
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