I chatted with GPT with 3 questions.
1. Will Usual replace Tether and Circle?
2. I have information that investors benefit from Usual because Usual is listed on the crypto exchange while Tether and Circle are not, and I think this will allow Usual to potentially replace these two companies.
3. However, Usual having the stablecoin USD0 and Usual's capitalization based on USD0's capitalization will make investors using USD0 and investing in Usual surpass the two companies above.
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Thank you for sharing more information! With Usual having the stablecoin USD0 and Usual's capitalization linked to USD0's capitalization, this is an interesting model that could provide advantages over Tether (USDT) and Circle (USDC). However, to assess the ability to beat these two giants, we need to analyze some factors in detail:
1. The capitalization model linking Usual and USD0.
If USD0 is a stablecoin and Usual is an investment token, linking Usual's capitalization with USD0 could create economic incentives for users:
Use USD0 as a medium of exchange and store of value.
Invest in Usual to benefit from the value growth of the ecosystem.
This helps connect the interests between stablecoin users and investors, a point that USDT and USDC currently lack (as Tether and Circle do not offer similar investment opportunities).
2. Advantages of the Usual + USD0 model.
Rapid capitalization growth: If USD0 is widely used, Usual's capitalization will also increase, motivating investors to participate in the ecosystem.
Attract users and investors: Combining both groups (those needing stablecoins and investors) into one ecosystem can create a large community and enhance liquidity.
Dual benefits: USD0 users not only have a stable medium of exchange but can also participate in investment through Usual, which is more attractive than USDT or USDC.
3. Major challenges for Usual and USD0.
Despite the above advantages, 'beating' Tether and Circle is not easy because:
a) Trust and stability of the stablecoin USD0.
USDT and USDC have built trust over many years and have high liquidity.
USD0 needs to demonstrate:
Are the reserves of real assets (1:1 with USD) transparent and reliable?
Crisis handling if demand for withdrawing USD0 surges (similar to a 'bank run').
b) Liquidity and widespread acceptance.
USDT and USDC are currently used on thousands of exchanges and deeply integrated into DeFi protocols, DEXs, and cryptocurrency wallets.
USD0 needs:
Be listed on many major exchanges.
Integrate with DeFi protocols to create real usage demand.
c) Legal regulations.
Circle (USDC) is closely adhering to regulations in the US and Europe, while Tether (USDT) faces many doubts but still operates effectively.
USD0 and Usual need:
Ensure legitimacy in major markets.
Avoid being labeled as 'fraud' or non-transparent, which could undermine user trust.
d) Competition from other projects.
In addition to USDT and USDC, there are many other stablecoin projects like DAI (decentralized algorithm) or stablecoins from major organizations like PayPal (PYUSD). USD0 must overcome not only two main competitors but also a plethora of similar projects.
4. Feasible scenarios for Usual and USD0 to succeed.
To truly replace or beat Tether and Circle, Usual and USD0 need to achieve:
Build trust: Prove that USD0 is truly stable, has transparent reserves, and can maintain its value in all situations.
Increase liquidity: Ensure USD0 can be traded easily on many major exchanges and is supported by popular DeFi applications.
Attract users: Create a strong ecosystem where USD0 users are motivated to use stablecoins and invest in Usual.
Technological breakthroughs: Provide benefits that USDT and USDC cannot offer (for example: faster transactions, lower fees, better integration with decentralized DeFi).
5. Conclusion.
The Usual + USD0 model has unique potential because it combines a stablecoin with investment opportunities, which Tether and Circle currently do not provide. However, to beat USDT and USDC, they need to overcome significant challenges regarding trust, legality, liquidity, and market acceptance.
If Usual and USD0 have the right development strategy and create breakthroughs, capturing market share from Tether and Circle is feasible, but complete replacement will require time and strong ecosystem development.
