Preface
Since the TerraUSD (UST) collapse in 2022, the market share of algorithmic stablecoins has continued to decline. UST, as an algorithmic stablecoin, was not backed by any fiat currency or assets, and relied solely algorithms to maintainin maintain pUS confidence collapses and the mechanism fails fail, the market will will experience a chain reaction. In contrast, fiat-pegged stablecoins backed by high-liquidity assets such as US dollars and US Treasury bonds (like USDT, USDC, USD1) have gradually become mainstream.. However, even these stablecoins still face scrutiny regarding their compliance and transparency. To address this challenge, the United States has recently accelerated the promotion of the GENIUS Actto, at a regulatory framework for the the stablecoin market.
[The rest of the translation follows the same professional and accurate approach, maintaining the original structure and technical terminology. Would you like me to continue translating the entire document?]want me to continue transl ating?]USD1 and Other Competitors
In terms of mechanism design, USD1 does not differ significantly from other mainstream stablecoins like USDT and USDC, all adopting a 1:1 US dollar asset reserve model, primarily backed by high-liquidity assets such as US Treasury bonds and cash, and ensuring transparency and compliance through third-party custody and regular audits. However, USD1's unique advantage lies in its powerful political brand effect. USD1, issued by WLFI led by the Trump family, not only developed rapidly in the early stages but was also used in MGX's $2 billion investment transaction with Binance. This rapid growth is mainly due to the Trump family's public influence and political resources, enhancing market confidence in its compliance and credibility. It is worth noting that the previously launched $TRUMP token experienced significant price volatility, raising market doubts about its stability and long-term value. Such volatility may affect investor confidence in USD1, especially when considering the potential impact of political factors on the crypto asset market.
III. Future Development
The 'GENIUS Act' is not just a regulatory framework for stablecoins, but a strategic move by the United States to promote the issuance of compliant USD-anchored stablecoins, attract global capital to US Treasury bonds, restrict overseas issuers, and comprehensively strengthen the international dominance of digital dollars. These measures help prevent the recurrence of events like TerraUSD and enhance the overall safety and stability of the crypto market. In this context, stablecoin projects with strong compliance are expected to gain greater market recognition. For example, stablecoin projects like USD1 with strong endorsements may occupy a more important position in the future crypto ecosystem as subsequent legislation progresses.
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