Tokens that hold a stable peg — usually to the dollar, sometimes to a basket, sometimes to a synthetic. Stablecoins are the everyday rails that make on-chain commerce usable for anyone who isn't trying to speculate.
Stablecoins are crypto's most successful product and the one nobody talks about as crypto. Tether (Giancarlo Devasini, Paolo Ardoino) launched USDT on Bitcoin's Omni layer in 2014 and now settles more annual volume than Visa, mostly outside the U.S. Circle's USDC arrived in 2018 with a regulated reserve thesis and got tested in March 2023 when SVB held part of its reserves and USDC briefly depegged to $0.87 over a weekend. MakerDAO's DAI was the original decentralized stablecoin, now rebranded to USDS under Sky with Rune Christensen's Endgame plan.
The frontier is yield-bearing and synthetic. Ethena's USDe — Guy Young's protocol — backs every dollar with a delta-neutral basis trade: long ETH spot, short ETH perp, capture the funding rate. It works until funding goes negative for sustained periods, which is the failure mode the team is open about. crvUSD uses Curve's LLAMMA mechanism for soft liquidations. GHO is Aave's overcollateralized stablecoin. PYUSD is PayPal's, FDUSD is First Digital's, and the pattern is clear: every major fintech wants its own dollar.
The geopolitical layer is the real story. The GENIUS Act in 2025 finally gave U.S. stablecoins a regulatory framework. Treasury Secretary Bessent has been explicit that stablecoins extend dollar dominance offshore by routing demand for U.S. Treasuries through stablecoin issuers. Tether holds more T-bills than Germany. The dollar's biggest export market in 2026 is people in Argentina and Nigeria using USDT on Tron because their local currency is collapsing. That is the thesis playing out in real time, and almost nobody calls it crypto.
Dai is a price-stable cryptocurrency whose value is held steady against the US Dollar through a system of Collateralized Debt Positions, autonomous feedback mechanisms, and appropriately incentivised external actors. Dai's stability is maintained by the Dai Savings Rate, the Stability Fee, and ultimately by Global Settlement — a mechanism that returns Dai holders to their underlying collateral if all else fails.Maker whitepaper →
A stablecoin is a peg-keeping mechanism, full stop. Fiat-backed coins keep the peg by holding T-bills and honoring redemptions. Overcollateralized coins keep it by liquidating before equity goes negative. Synthetic delta-neutral designs keep it by hedging spot with perps. Algorithmic designs failed at it spectacularly. Soft-liquidation designs keep it by trading collateral continuously instead of all at once. Treasury-backed designs keep it by passing yield through. The peg looks the same; the failure modes don't.
Tether (2014) and Circle's USDC (2018) hold reserves — primarily short-duration T-bills, repos, and cash — and honor 1:1 redemptions for institutional accounts. USDC publishes monthly attestations from a Big Four firm; USDT publishes quarterly attestations and a daily transparency page. The peg is enforced by arbitrage: when USDC trades below $1, qualified redeemers pull dollars and burn tokens. The March 2023 SVB depeg (USDC briefly to $0.87) was a banking-system risk, not a reserve-quality risk. The dominant design by orders of magnitude.
DAI (now sitting alongside USDS in the Sky ecosystem) is minted against overcollateralized vaults — typically 130-200% collateral for volatile assets. Liquidation auctions sell collateral when ratios breach the threshold, repaying the debt and burning the DAI. The stability fee acts as a monetary-policy lever; the Peg Stability Module lets users swap USDC for DAI 1:1 to absorb peg pressure. Survived March 2020's Black Thursday with damage but not insolvency. Older than every fiat-backed competitor's regulated entity.
Guy Young's Ethena ships USDe by holding spot ETH (or BTC) collateral and shorting an equivalent perp position on centralized venues. The combined position is delta-neutral — peg holds because longs and shorts net to zero. Yield comes from perpetual funding (which historically pays longs to shorts in bull markets) plus staking yield on the spot leg. sUSDe is the yield-bearing wrapper. Risks: persistent negative funding regimes, exchange counterparty exposure, custody. The basis trade is the original TradFi arb, now packaged as a stablecoin.
Do Kwon's UST attempted a mint-burn arb against LUNA: burn $1 of LUNA to mint $1 of UST, burn $1 of UST to mint $1 of LUNA. The Anchor Protocol paid 19.5% on UST deposits, subsidized from a reserve. May 2022, a coordinated UST sell pressure exceeded the arb's capacity, LUNA hyperinflated chasing the peg, the reflexive death spiral wiped ~$60B in days. The lesson is structural: a stablecoin backed only by its own equity token has no exogenous floor. The reference failure mode.
Michael Egorov's crvUSD uses LLAMMA — a Lending-Liquidating AMM — that continuously rebalances collateral into stablecoin as price falls through a configured band, instead of doing a single discrete liquidation. Borrower loses some collateral on the way down, but avoids the cliff-edge wipeout of traditional CDPs. If price recovers, the LLAMMA reverses and the borrower regains collateral. Trade-off: continuous slippage cost vs liquidation-event risk. A genuinely novel design in a space mostly converging on the same templates.
Ondo's USDY is a tokenized note backed by short-term U.S. Treasuries and bank demand deposits. Yield accrues to the token itself (USDY rebases or compounds depending on the wrapper) rather than being held back as protocol revenue. Available to non-U.S. and accredited U.S. investors under Reg S/Reg D. BUIDL (BlackRock with Securitize) operates in the same lane for institutional flows. The pitch: stablecoin UX with T-bill yield baked in, not a 0% liability the issuer arbs against you.
Conviction is stated as conviction; you decide what to do with it. Tiers below — Core, Conviction, Watch, Speculative — reflect how much of FRQNCY's attention each project currently earns, not a recommendation to buy.
Conviction is theatre without practice. Five steps that turn the thesis above into something the body actually does, not just something the mind agrees with.
Ethereum, Base, Solana. Compare fees and finality. The unit is the same; the rails are not.
Open a Vault, deposit collateral, mint at a conservative ratio. Feel the stability fee. Repay before liquidation.
Read Ethena's transparency dashboard daily for a week. The basis trade is the whole product.
The reserves report is public. Form your own view on the assets backing $150B of dollars.
Argentina, Turkey, Nigeria. Notice what real demand for digital dollars looks like.
The Crypto hub is the index of all sectors and the freedom-technology frame they share. The Fund is what happens when the same conviction gets put to work on behalf of the network.
The dollar found new rails.
Stablecoins are the bridge between fiat and the open financial system.
Reserve composition is the whole product.
Read the attestation.
FRQNCY · Crypto