I went to bed early last night and only saw the news of Open USD in the morning. It's worth noting and also writing down my opinion on stablecoins Stablecoins have economies of scale but no network effects For stable currency issuers, the larger the scale, the higher the interest income of treasury bond, the lower the marginal costs of compliance and other items, and the higher the operating efficiency and brand value; Network effect refers to the phenomenon where the more people use it, the more benefits each user can derive from it. Typical network effects include: Social networks: The more friends you have, the better you can use them, and the more inseparable you are from them Content platform: Content creators readers/fans mutually promote each other Multilateral service market: The more Didi drivers/Meituan delivery riders/Taobao merchants there are, the better the consumer experience Some people may say, no, the more DeFi protocols, wallets, and exchanges that support USDC, the more users will benefit from it, right? I disagree with this statement Essentially, what has network effects and cannot be separated from are the products that C-end users use every day, such as DeFi protocols, wallets, and exchanges (exchanges themselves are two-sided markets), rather than the stablecoins encapsulated behind them. Simply put, for stablecoins, circulation and trading are more important than issuance. This was analyzed in last year's video (https://(x.com)/SeaBitcoin/status/19554645653210488) Firstly, stablecoins are not a relationship/commodity service. Stablecoins are only a medium of exchange and circulation. The larger the issuance scale of USDC, the experience/value of holding USDC will not increase as a result. It only needs (and should) guarantee a value of $1, and users do not need or expect it to have a premium. Secondly, the switching cost between stablecoins is much lower than that of social networks, content platforms, and multilateral service markets. At least, the network effect of Circle is very weak, far from being as strong as many KOLs claim. Circle Corporation, as an issuer, has economies of scale; USDC, as a stablecoin, has no network effects. These are two independent things. A platform with network effects can form a monopoly, so we have always said that social networks are the 'second best'; Companies with economies of scale may not necessarily form monopolies. In the past, Tether had advantages in non compliant markets such as Asia, Africa, and Latin America, while Circle had advantages in compliance at home in the United States, as well as first mover advantages in brand and channel under the category of "compliant stablecoins". Compliance and channels are the advantages of large FinTech companies and banks in the United States. With the implementation of the stablecoin bill and the entry of big players like Open USD (whose determination and scale will be stronger than expected), Circle's relative advantage and scarcity in the market are greatly weakened Last week, I bought some CRCL observation positions and decided to clear them after seeing the news of Open USD. I will not touch CRCL again in the short term Some people say that Open USD is a big league without a backbone. Actually, it's not. The CEO of Open Standard is Zach Abrams, the founder of Bridge. This means that Stripe and Tempo are taking the lead in this matter, uniting over 100 global partners with huge coverage in payment channels, merchants, and banking networks This is a hunt for Circle USDC, a top tier strategy In terms of operation, in addition to enterprises being able to mint and redeem Open USD for free, Open USD will also distribute all the profits generated from reserves to partners (deducting necessary operating costs). It can be imagined that they will use various channels (exchanges/wallets/public chains) to subsidize and attract users More and more compliant stablecoins are being launched, which is a good thing for the industry as a whole and once again proves the attractiveness of blockchain technology to traditional finance and payments It can be foreseen that users will have a stronger demand for lossless exchange/switching between different stablecoins. This is a clear call for coin hits. For a long time, there have been no transaction fees for exchanging between USDC, USDT, and USD1. We hope more wallets and exchanges can keep up