Over the past year, stablecoin issuance has grown by $100 billion, with an expected 10-fold increase in the coming years. As traditional finance (TradFi) major players enter this field, many are uncertain about how to seize this opportunity.
With growing demand, various types of stablecoins will expand—whether centralized issuers like Tether and Circle, or decentralized protocols like Ethena and MakerDAO.
Historically, Tether has been the biggest winner, accounting for 60% of all stablecoin issuance (through USDT). In 2024 alone, it earned $13 billion in profits. However, since Tether is a private company, there is no direct investment avenue. Fortunately, many other issuers have tradable tokens.
Meanwhile, some of the world's largest financial institutions and governments are also betting on stablecoins. Trump's stablecoin strategy could provide a significant boost to the industry this year. If this momentum continues, 2025 could be the most important year for stablecoins.
Even Tether's CEO (Paolo) is looking forward to the 2025 stablecoin wars. Now is the time to position accordingly.
Increase Focus on Stablecoin Growth
You can directly gain from stablecoin growth through issuers with tradable tokens, or indirectly through protocols benefiting from stablecoin adoption.
Direct Exposure
The most obvious way to engage with stablecoin growth is through some issuers with active tokens. Below, I will review some key players.
Ethena
Ethena issues USDe, the largest synthetic yield stablecoin. It mints USDe by constructing delta-neutral positions on assets like Bitcoin and Ethereum, generating yield from staking rewards and perpetual funding rates.
With a circulation of around $7 billion and year-on-year growth of 350%, Ethena has become a significant player in the stablecoin space. Its native token $ENA serves both utility and governance functions in the ecosystem.
Sky (formerly Maker)
Sky (formerly Maker) is one of the oldest protocols in DeFi and the issuer of USDS (formerly DAI), the largest CDP-based stablecoin. While DAI's supply is migrating to USDS, the protocol currently has a total issuance of $8.5 billion. Its governance token $MKR is used for protocol governance.
Ondo
Ondo Finance is a leading real-world asset (RWA) tokenization platform focused on bringing traditional financial assets on-chain. Its stablecoin product USDY represents a tokenized version of US Treasuries, aimed at providing a yield-bearing, fully-backed digital dollar.
USDY has grown rapidly, with a circulation of around $600 million and year-on-year growth of 1000%. Positioned at the intersection of traditional finance and DeFi, Ondo is a key player in the RWA space.
Ondo's native token $ONDO plays a role in governance and protocol incentives, aligning token holders with the platform's long-term growth.
Frax
Frax Finance is the issuer of the FRAX stablecoin, which was initially partially algorithmic but later transitioned to being backed by RWA and crypto assets.
The protocol expanded its stablecoin offering with sFRAX, a yield-bearing FRAX version backed by Treasuries, making it a significant participant in on-chain RWA. With an issuance exceeding $1 billion, Frax remains one of the most innovative decentralized stablecoin issuers.
Its governance token $FXS accumulates value through protocol revenue and governance rights, aligning holders with Frax's long-term growth.
Indirect Exposure
As the stablecoin wars intensify later this year, the competition to establish foundational liquidity will drive more activity toward DeFi's largest stablecoin use cases. Here are some less obvious projects benefiting from stablecoin growth.
Aave
Aave, the largest lending protocol in DeFi, will significantly benefit from increased stablecoin adoption, as stablecoins are the backbone of lending markets. Higher stablecoin issuance means more liquidity flowing into Aave's pools, reducing borrowing costs, increasing deposit yields, and increasing protocol revenue through interest rate spreads.
Moreover, as competition among stablecoin issuers intensifies, many will offer incentives to deepen liquidity, further driving Aave's utilization. With its multi-chain presence and dominance in DeFi lending, Aave is positioned to capture the surge in lending activity driven by stablecoin expansion.
$AAVE is the native governance token of the Aave protocol.
Additional Benefit: Aave also directly benefits from stablecoin demand through its stablecoin GHO, with an issuance of $200 million and 50% growth since the beginning of the year.
Curve
Curve is another key player in DeFi, with its success closely tied to the rise of stablecoins. As the preferred decentralized exchange for stablecoin swaps, Curve will greatly benefit from the surge in stablecoin adoption. Since stablecoins comprise a significant portion of its liquidity pools, increased issuance will directly boost Curve's TVL (Total Value Locked) while improving platform efficiency and reducing trading slippage. This leads to more trading volume, more fees, and increased protocol revenue.
$CRV is Curve's native governance token, benefiting from increased platform usage.
Additional Benefit: Curve has also launched its native stablecoin crvUSD, providing additional exposure to stablecoin demand while offering extra incentives for liquidity providers.
Pendle
Pendle is a DeFi protocol for tokenizing yield-bearing assets, allowing users to separate principal and yield for more efficient trading and optimization. With stablecoin adoption growth, Pendle benefits by unlocking more liquidity for stablecoins, driving more trading volume and higher protocol revenue.
As stablecoin demand increases, Pendle's model will capture a larger market share in DeFi, providing users with the ability to maximize stablecoin returns. $PENDLE is its native governance token, benefiting from this expansion.
Morpho
Morpho is a protocol enhancing decentralized lending by optimizing interest rates and liquidity. With stablecoin adoption growth, Morpho will benefit from increased lending demand, as stablecoins bring liquidity to its pools, providing better rates for borrowers and lenders.
As more stablecoin liquidity flows into DeFi, Morpho's unique model will become more attractive. $MORPHO is Morpho's governance token.
Fluid
Fluid (formerly Instadapp) is a DeFi platform integrating lending and trading functions to improve capital efficiency. Its innovative "smart collateral" and "smart debt" features allow users to simultaneously use assets as loan collateral and trading liquidity while earning lending and trading fees.
By providing seamless integration between lending and trading, Fluid will attract more stablecoin liquidity, reducing borrowing costs and increasing user returns. The Fluid protocol is governed by its native token $FLUID.
Special Mention: Tron
No section would be complete without mentioning Tron ($TRX). The Tron blockchain holds 50% of USDT issuance. Last month, Tron generated over $50 million in fees through stablecoin transfer activities.
Stablecoins are considered the killer use case for cryptocurrencies, but since the largest stablecoin issuer (Tether) is a private company, most people have not engaged in this field. Hopefully, this article provides some insights into how to position yourself for the future explosive growth of stablecoins.
