THE NEXT WAVE OF STABLECOIN ECONOMICS BELONGS TO DEFI

Summary from the TLDR Crypto newsletter

Circle and Tether's 85% market share of the $265 billion stablecoin market is eroding as distribution partners and ecosystems internalize yield, evidenced by Circle paying Coinbase $908 million of its $1.7 billion in 2024 reserve income while Hyperliquid's $5.5 billion USDC balance generated $220 million annually for Circle/Coinbase before switching to Native Markets' USDH. Major chains leak roughly $1.1 billion in annualized stablecoin yield to Circle and Tether – 40% more than the $800 million in transaction fees these ecosystems earn. White-label stablecoin models via Ethena's SaaS infrastructure are scaling across Sui, MegaETH, and Jupiter, while applications like Hyperliquid and Pump.fun trade at 19x and 2x market cap to revenue respectively versus Solana's 80x multiple, demonstrating how apps with strong distribution are capturing actual cash flows at far lower valuations than infrastructure layers.