Business Opportunities in stablecoin .@NakedCollector has put out a good analysis on various revenue-generating aspects arising with the emergence of stablecoins Until now, stablecoin issuers have primarily earned returns from the interest on collateral assets such as U.S. Treasury bonds or, in Tether’s case, yields from assets like gold and Bitcoin. However, new entrants and stablecoins pegged to currencies other than the U.S. dollar may find replicating such business models challenging. Specifically, achieving Tether’s substantial profitability - exemplified by its $13 billion net profit last year and an impressive 74% net profit margin - seems highly improbable for newcomers. In contrast, Circle’s net profit margin stood at a modest 9.3%. Moving forward, stablecoin providers are likely to explore more sophisticated revenue streams beyond Tether’s straightforward model. These may include arbitrage opportunities between various stablecoins and their collateral assets, on-chain lending activities, and the operation of specialized stablecoin infrastructure or licensing services. I think such optimized revenue models will become increasingly critical in the evolving stablecoin market.

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