STABLECOINS DON'T WIN BY MINTING. THEY WIN BY MOVING

Summary from the TLDR Crypto newsletter

USDT and USDC dominate 85% of stablecoin supply not through branding or liquidity alone but through distribution moats built over years of integrations across every exchange pair, DeFi protocol, OTC desk, and on/off-ramp, demonstrating that issuance is a product challenge while distribution is an ecosystem challenge requiring network effects. Ethena's USDe reached $12 billion as the fastest stablecoin to hit $10 billion through horizontal distribution embedding in Aave for leveraged loops and Pendle for yield tokenization, while Hyperliquid's USDH exemplifies vertical distribution embedded directly in platform usage loops, contrasting with PayPal's PYUSD which despite 400 million users sits at only $2-2.5 billion supply because distribution only matters when connected to real use cases. A new mental model separates transacting stablecoins like USDT/USDC with high velocity and deep integration from holding stablecoins like wallet-issued tokens optimized for yield and safety with low velocity, suggesting wallets could route idle balances into "staked dollars" that earn returns without manual interaction. The next opportunity lies in orchestration layers that restore stablecoin fungibility across issuers by autonomously reading and converting different stablecoins into USD, solving the fragmentation problem as over $140 billion sits idle while less than 10% engages actively in DeFi.