Stable: The new USDT Trojan horse in the stablecoin era

Author: Ryan Yoon, Source: Tiger Research, Compiled by: Shaw Jinse Finance

Abstract

• Stable positions itself as a "Trojan Horse" for the stablecoin market, aiming to achieve mass adoption through its USDT-centric infrastructure.

• It offers fee-free USDT transfers, sub-second settlement, and a simplified interface to address key obstacles such as high fees, slow transaction speeds, and complex user operations.

• The intended plan is to attract users through free and seamless transfer services and then expand into payment, decentralized finance (DeFi) services, and institutional partnerships. 1. Stablecoins: A Trojan Horse Entering the Market Stablecoins quietly entered the cryptocurrency market, like a Trojan horse. Stablecoins have now become a dominant force in the ecosystem. Initially, they were primarily viewed as a tool to reduce volatility. Over time, they have evolved into a core component of market infrastructure. The stablecoin market, led by USDT, boasts a circulating supply exceeding $150 billion, over 350 million users, and even surpasses Visa in transaction volume. With a circulating supply exceeding $150 billion and over 350 million users, their development embodies the role of a bridge between traditional and digital finance. On centralized exchanges, they serve as the primary medium for conversion between fiat and cryptocurrency. In the decentralized finance (DeFi) sector, they are benchmark assets for providing liquidity and lending. For cross-border remittances, they offer a faster and more economical alternative to traditional banks. The shift in market behavior is striking. Early cryptocurrency trading relied on direct token-to-token transactions, such as BTC/ETH or BNB/ETH, with value referenced to Bitcoin. Today, trading pairs like BTC/USDT and ETH/USDT dominate. Decentralized finance (DeFi) returns are often denominated in USDT. In parts of Southeast Asia and Latin America, USDT is increasingly being used for direct payments, replacing physical dollars. Where markets once relied on fluctuating token valuations, stablecoins have now become a universal unit of account. Initially introduced out of necessity, they have become a central axis of the cryptocurrency ecosystem. II. The Shadow of Growth: The Limitations of Emerging Infrastructure Rapid expansion has also exposed structural weaknesses. The current stablecoin infrastructure faces three key constraints. 1. Unpredictable and High Transaction Fees Stablecoins operate across multiple blockchain networks, but when the network is congested, transaction fees can skyrocket, making small transactions impractical. In some cases, sending $10 can incur a $20 fee. This undermines the core purpose of stablecoins as an everyday payment medium. 2. Slow Settlement Times On Ethereum, stablecoin transactions can take several minutes or even longer to confirm, depending on network conditions. For use cases like online checkout or brick-and-mortar retail, where real-time settlement is crucial, this delay is unacceptable. 3. Complex User Experience Managing gas fees, wallets, and private keys still presents a high barrier to entry for average users. For consumers accustomed to simple payment interfaces like PayPal, using stablecoins is currently overly complex. These infrastructure limitations pose a significant barrier to the next phase of stablecoin adoption. Ironically, despite having long become the de facto benchmark asset within the cryptocurrency ecosystem, daily usage among average users remains low. Stablecoins have fulfilled their original role as a "Trojan Horse," bringing stability to volatile markets and securing a core position within the ecosystem. The next challenge lies in breaking beyond the cryptocurrency realm and penetrating traditional financial markets and mainstream consumer payments. Achieving this goal requires fundamentally addressing current technological limitations, which necessitates a new "Trojan Horse" strategy. Creating a new "Trojan Horse" for the market does not require inventing another stablecoin. Stablecoins are simply instruments pegged to the US dollar. The next "Trojan Horse" is dedicated infrastructure built for existing stablecoins, especially those that already dominate the market. This is where Stable comes in. Unlike general-purpose blockchains, Stable is a blockchain built specifically for USDT. It doesn't support USDT and other tokens simultaneously; instead, it serves as a high-speed network dedicated to USDT transactions.
  

  

  Stable’s mission is threefold:
  

  • Cancel P2P USDT transfer fees: Completely waive the transaction fees for P2P USDT transfers, solving the inefficiency problem in the existing network where even a transfer of $10 may incur excessively high transaction fees. Sub-second settlement: All transactions settle within one second, eliminating the wait times common in brick-and-mortar and online retail payments. Simplified user experience: Fee calculation and wallet management are hidden, enabling intuitive operation without technical burden. Crucially, these improvements are interconnected. Eliminating fees simplifies the user experience, while faster transaction processing increases practicality in real-world commerce. Together, these factors lay the foundation for stablecoins to expand beyond the cryptocurrency ecosystem into the mainstream payments market. Stable's vision is not to be just another blockchain, but to become the core infrastructure supporting the $160 billion USDT ecosystem. It aims to address the structural limitations of existing stablecoin infrastructure, including unpredictable fees, slow settlement speeds, and complex user interfaces. This approach moves away from a fragmented model where each chain independently supports USDT, toward a unified environment optimized for USDT operations. IV. How the Stable Architecture Works For Stable's core vision to be realized, multiple technical elements must align. Stable is currently still in the testnet phase, and the team is preparing for its official launch. Its intended architecture clearly illustrates the system's operational structure. 4.1 Feeless USDT0 Transfers: EIP-7702 and Account Abstraction The Stable network operates with two token types. USDT0 represents USDT introduced from external networks via a cross-chain bridge. GasUSDT is a network fee payment token pegged 1:1 to the value of USDT0 and used solely for transaction fees. Both are redeemable 1:1 for actual USDT. To enable feeless P2P transfers, Stable leverages EIP-7702 and account abstraction. Its key advantage is that users only need to hold USDT0 for all transactions. In the current blockchain system, there are two independent account types: Externally Owned Accounts (EOA): Standard wallets (such as MetaMask), controlled by private keys, can sign transactions, but have limited functionality. Contract Accounts (CA): Smart contracts that can execute complex logic but cannot independently initiate transactions.

  Account abstraction combines these account types, enabling standard wallets to have smart contract functionality. This allows users to specify actions such as "pay transaction fees with USDT" or "request fee waiver."

  The first standard to address this issue was ERC-4337. It required creating a new smart wallet and transferring funds from an existing one, a process prone to user error. Previous Method: Create a new Smart Wallet → Transfer funds from an existing wallet → Use a new address EIP-7702: Keep your existing wallet → Add smart contract functionality → Keep the same address EIP-7702 eliminates the migration step by enabling smart contract functionality on existing wallet addresses without transferring funds. Users can continue to use their existing MetaMask wallets and add smart contract functionality. In Stable, all wallets natively support EIP-7702, enabling Smart Wallet functionality without any additional setup. This includes features like transaction fee sponsorships, available directly within existing wallets.

  

  Example:
  

  1. Ryan sends 100 USDT0 to Jay via MetaMask.

  2. Wallets that support EIP-7702 request a fee exemption

  3. The fee is borne by the payer. Ryan's balance decreases by 100 USDT0, while Jay receives the full amount. No fees are deducted, and Ryan doesn't need to hold or calculate fees, similar to sending money via PayPal. This eliminates the need to separately hold fees or manually calculate them. 4.2. Sub-Second Transaction Finality Stable uses the StableBFT consensus algorithm, producing a block every approximately 0.7 seconds and finalizing transactions after a single confirmation. This eliminates the "pending" phase common in many blockchain transactions, providing an experience similar to instant approval at a payment terminal. To further increase speed, Stable is developing Block-STM parallel processing technology, which can execute independent transactions simultaneously, representing approximately 60% to 80% of network activity. This approach is similar to having multiple checkout counters in a store to reduce wait times. In the long term, Stable plans to upgrade to a consensus mechanism based on the Autobahn DAG. This structure allows for multiple blocks to be proposed simultaneously and decouples data propagation from ordering, reducing bottlenecks. Internal testing has recorded throughput of up to 200,000 transactions per second, though this is still in pre-production. 4.3. Simplified User Experience Stable eliminates the need to calculate fees and manage a separate fee token, while maintaining compatibility with existing Ethereum. This allows users to continue using familiar tools like MetaMask and Etherscan without any additional learning curve. Beyond simple compatibility, these tools feature USDT-optimized functionality for smoother operation: MetaMask supports fee-free USDT0 transfers, while Etherscan displays USDT transaction history in a more intuitive format. It's like upgrading to a new smartphone while keeping all your existing apps. Users retain a familiar environment but gain enhanced functionality. Furthermore, USDT from other networks can be seamlessly imported through the existing LayerZero cross-chain bridge. USDT0 utilizes LayerZero's OFT (Interchain Universal Token) standard, eliminating the complexity of traditional bridges. In the traditional model, each network maintains a separate version of USDT, resulting in fragmented liquidity.

     Thanks to the OFT standard, a single USDT0 functions identically across all networks. Whether bridged from Ethereum or Arbitrum, the resulting token is the same USDT0, eliminating liquidity fragmentation and simplifying asset transfers.

     Planned developments include a Stable Name System, which will replace complex wallet addresses with human-readable names, further enhancing usability. Similar to email addresses, users will be able to send funds to identifiers like "ryan.stable" or "jay.stable." While still in the planning stages, implementation and widespread adoption are likely to take some time. Technically, the system is expected to adopt a structure similar to the Ethereum Name Service (ENS), with added features optimized for USDT transactions. 4.4. Additional Technical Components The network is also developing StableDB, a specialized database architecture that separates state commits from state storage. In most blockchains, a new block must be fully written to disk before the next block can be processed, and slow disk writes cause processing delays. StableDB eliminates this bottleneck by first confirming execution results in memory and then writing them to disk in parallel. This architecture is enhanced with memory-mapped file input/output (mmap), which links files stored on disk directly to the operating system's memory space. This allows frequently accessed data to be read and written as if it were in memory, bypassing slower disk accesses and significantly increasing processing speed. The effect is similar to a busy restaurant where employees quickly jot down orders and enter them later into the point-of-sale system so the kitchen can begin preparation immediately. For enterprise clients, Stable plans to launch Guaranteed Blockspace, a specially allocated transaction capacity that ensures stable throughput regardless of network congestion, similar to a dedicated bus lane on a highway. Confidential transfers are also under development, allowing users to conceal transaction amounts while still meeting anti-money laundering (AML) and know-your-customer (KYC) compliance requirements. Going forward, the execution engine, currently written in Go, will be replaced by a C++ version called StableVM++. This upgrade will enable lower-level memory control and performance optimizations, aiming to increase execution speeds by up to six times. V. Expansion Scenarios for the Stable Ecosystem Stable positions itself as a new Trojan Horse. Fee-free USDT transfers, sub-second settlements, and a simplified user experience serve as entry-level incentives. This loss-making sales strategy is intended to drive mass adoption. Once a user base is established, revenue can be generated through a range of ancillary services. From this foundation, there appear to be three main expansion paths. 5.1. Scenario 1: Expansion of Institutional Services and Partnerships Stable can expand its ecosystem by developing institutional services and partnerships. A key factor is providing premium services such as "guaranteed block space" to ensure low costs and high reliability. This strategy is highly effective for cross-border corporate settlements. Using Stable instead of traditional international transfer methods can significantly reduce time and costs. However, during peak periods like month-end, processing speed becomes crucial. Dedicated block space ensures consistent processing speeds, and businesses are willing to pay a premium for this reliability. The same logic applies to fintech partnerships. Remittance companies like Limitless and Wise can provide better services to their clients by integrating Stable's infrastructure. In turn, Stable can charge fees based on transaction volume. The same is true for cryptocurrency exchanges. By using Stable for USDT deposits and withdrawals, exchanges gain a reliable partner. While individual users can use the service free of charge, its real target is high-volume institutional traders. 5.2. Scenario 2: Rapid Growth of the On-Chain Service Ecosystem. Free transfers and high-speed transmission will significantly increase the usage of on-chain services. Currently, even a $10 DeFi transaction on Ethereum incurs high fees. On Stable, however, small-scale DeFi activities become economically viable. Users can provide $100 in liquidity or stake at a very low cost, expanding DeFi's user base. Stable collects smart contract execution fees from these activities, and as transaction volume grows, its overall scale will also expand. An even more significant change is the emergence of new on-chain services. Real-time micropayments will enable direct transactions such as blockchain-based content subscriptions, game item purchases, and tipping. Tipping a YouTube creator for $1 or paying $0.10 for a single news article is now possible. Once such a micropayment ecosystem is established, the number of transactions will grow exponentially. Individual fees may be small, but the overall transaction volume will reach a considerable level. 5.3. Scenario Three: Deep Integration with the Real Economy The most ambitious scenario is for stablecoins to become a standard payment method in the real economy. USDT payments are gaining popularity in Southeast Asia and Latin America, but high fees and slow speeds limit their adoption. If Stable can address these issues, offline commerce could rapidly change. Paying for a cup of coffee for $2 at a Vietnamese cafe or using USDT to purchase everyday groceries at a convenience store in the Philippines could become the norm. This will fundamentally transform Stable's business model, transforming it from a blockchain network into a global payment infrastructure provider. It will be able to provide payment terminals for merchants and digital wallets for consumers, collecting fees from both. By charging a minimal fee on every USDT transaction passing through the Stable network, it will be able to establish a stable revenue base as transactions grow. The delay in the rollout of central bank digital currencies (CBDCs) also presents opportunities. If private stablecoins are more convenient and accessible than government-issued digital currencies, users will naturally choose the former. Sixth, Stable's True Strategy Stable's strategy is clear: attract users through free USDT transfers and a convenient user experience. As the ecosystem grows, it will build a business model around the diverse services that emerge. A single transaction might not generate significant revenue, but the rapid growth in transaction volume will create significant overall scale. This is similar to Amazon's early strategy of acquiring customers by selling books at near-cost, and subsequently generating substantial profits through cloud services and advertising. Free transfers are just the bait. The real goal is to become the central hub of the USDT ecosystem, ensuring that all transactions flow through Stable. Once the network effect is established, it will be difficult for users to switch to other platforms. Ultimately, Stable has secured a solid market position. This is the true strength of this new "Trojan Horse."