Podcast Summary: Bankless — "The Stablecoin Chain Wars: Codex’s Bet on On-Chain FX"

Host: Bankless (David)
Guest: Haonan Li (Co-founder and CEO of Codex)
Date: November 6, 2025

Main Theme:

Codex’s Playbook for the Stablecoin Chain Wars

This episode dives deep into the rapidly evolving landscape of stablecoin-focused blockchains (“stablecoin chains”). Host David interviews Haonan Li, CEO and co-founder of Codex—a stablecoin-centric Ethereum Layer 2 (L2) rollup—on why Codex is betting the future of crypto finance on solving cross-border FX (foreign exchange) flows, frictionless on/off ramps between fiat and stablecoins, and what it means to be a truly neutral payments chain in an ecosystem crowded by heavyweights like Stripe (Tempo), Circle (Ark), Plasma, Stable, and Tron.

Key Discussion Points and Insights

1. Fragmented Stablecoin Chain Landscape

• The “stablecoin chain” category is rapidly crowding with projects (Stripe, Ark/Circle, Plasma, Stable, Tron).
• Nuance: Each chain is taking distinct approaches, not just battling over payments: neutrality, technical construction, go-to-market, and underlying incentives differ significantly.
  • Quote:
    “Most cross border transactions involve an fx component, and so if you are the cheapest place for fx to happen that chain will be a natural magnet for all these stablecoin flows.” — Haonan Li [00:00]

2. The Bear Chain Playbook vs. Other Approaches

• Chains like Plasma and Stable are following the “bear chain” playbook: launch a token, incentivize users/DevOps with airdrops, fork DeFi apps, hope TVL sticks—but often leads to mercenary capital and inevitable collapse.
  • Quote:
    “The problem with this approach... People will dump the tokens, price goes down, you give away more tokens... eventually it all goes to zero.” — Haonan Li [02:58]
• In contrast, Codex is targeting deep, infrastructural friction—specifically the FX component and real-world fiat ramps.

3. Neutrality: The Deciding Factor for Institutional Adoption

• Definition of Neutrality:
  Not just ideology, but practical business risk: Would a competing fintech or issuer build on a chain controlled by a rival (e.g., Stripe or Circle)? Unlikely.
  • Quote:
    “Are you really going to bet the future of your company on a competitor’s infrastructure?... It doesn’t really sell.” — Haonan Li [06:26]
• Codex claims deep neutrality by neither running an issuer nor competing with its users (as fintech).

4. The Codex Differentiator – On-Chain FX as the "Golden Goose"

• While all chains want to “transfer a ton of stablecoins and charge half a bip on a trillion dollars of flows,” Codex is explicitly targeting:
  • Wholesale, high-volume FX flows
  • Frictionless, instant swaps between both stablecoins and fiat on/off ramps (including exotic currencies)
• Codex’s thesis: Whoever wins the FX layer will “magnetize” stablecoin flows.
  • Quote:
    “We want to be the cheapest place for USDT–USDC swaps… and for fiat-stable swaps as well… You need to delete the border between fiat and crypto.” — Haonan Li [09:24]
  • Quote:
    “Moving between a unit of fiat and stables should be frictionless on a cost and speed basis… That’s what we are focused on.” — Haonan Li [00:00, 09:24]

5. The Hard Problem: Fiat Ramps and On/Off Process

• Codex is tackling the most under-served pain point: fiat-to-stable and stable-to-fiat conversions, which are expensive and regulatory-heavy.
• Existing exchanges can handle this only due to their loss-leader approach and ability to lock funds; pure on-ramp startups have consistently failed due to chargebacks, regulation, and lack of upsell capability.
  • Quote:
    “The only people that have truly figured out the on-ramp problem are exchanges... The pure on-ramp startups… have been a terrible business.” — David [15:57]

6. On-Chain FX Liquidity, Exotics, & Neutrality

• Codex aims to build seamless on-chain FX markets, not just for major currencies but exotics too (think Argentinian peso, Malaysian ringgit).
• On-chain, direct swaps between non-USD currencies are happening—disintermediating the USD’s historical dominance in FX flows.
  • Quote:
    “On chain you’re starting to see… folks swapping directly between currencies, which is a radical restructuring of how markets work.” — Haonan Li [21:50]

7. Why Build Codex as an Ethereum Layer 2

• Economic: Most stablecoins (and highest value txs) reside on Ethereum.
• Technical: Security, robustness, and user “exit hatch” guarantees are superior on Ethereum L2 compared to new L1s.
• Ideological: Deeply rooted in Ethereum values and credibility.
  • Quote:
    “We wake up every day thinking about stablecoins… Our mission is to make sure Ethereum continues to be the dominant place for stablecoins.” — Haonan Li [25:53]
  • Quote:
    “If you’re stuck on Stripe chain or Circle chain, there’s nowhere to go.” (On L2 exit hatches.) — Haonan Li [28:08]

8. General-Purpose vs. App-Specific Chains: Ethereum’s Future?

• Haonan argues the future is narrow, app-specific L2s—general-purpose L2s are “parasitic” to Ethereum L1 post-EIP-4844.
  • Quote:
    “General purpose L2s are parasitic to L1… Rollups need to work in a way with L1 where it’s a win-win… L2s should focus on things L1 cannot do well.” — Haonan Li [36:57, 38:41]
• Ethereum’s next phase is an ecosystem of tightly focused, hyper-specialized L2s, not undifferentiated “mini-L1s”.

9. Evolving Ethereum Discourse: Bundlers vs. Unbundlers

• Bundlers: Projects that aggregate and reinforce Ethereum’s network effects (e.g., Codex as an L2).
• Unbundlers: New L1s that “decouple” Ethereum features (e.g., Tempo) but risk fragmenting the ecosystem.
  • Quote:
    “You’re either a unbundler of Ethereum or a bundler of Ethereum from the perspective of Ethereum.” — David [52:34]

Notable Quotes and Moments (with Timestamps)

• On the “bear chain” playbook:
  • “People dump the tokens, price goes down, you give away more tokens… eventually it all goes to zero.” — Haonan Li [02:58]
• On neutrality for stablecoin chains:
  • “Are you really going to bet the future of your company on a competitor’s infrastructure?... It doesn’t really sell.” — Haonan Li [06:26]
• On Codex’s mission:
  • “We want to be the cheapest place for FX to happen… that chain will be a magnet for all these stablecoin flows.” — Haonan Li [00:00]
• On the challenge of fiat ramps:
  • “The only people that have truly figured out the on-ramp problem are exchanges... The pure on-ramp startups… have been a terrible business.” — David [15:57]
  • “We deal with that gunk… That's our golden goose.” — Haonan Li [16:56–17:35]
• On on-chain FX and challenging USD dominance:
  • “On chain... folks are swapping directly between currencies, which is a radical restructuring of how markets work.” — Haonan Li [21:50]
• On the value of Ethereum L2s:
  • “Users always have the right to exit back to L1... if you're stuck on Stripe Chain, there's nowhere to go.” — Haonan Li [28:08]
• On the future of L2 specialization:
  • “If a rollup is adding nothing other than existing, it is fragmenting the user base… It better address some use case better than L1… or it really ought not exist.” — Haonan Li [55:30]
• On Ethereum community maturity:
  • “We need to discern between true threats and progress... What does progress look like?” — Haonan Li [46:23]

Timestamps for Key Segments

• [00:00–02:20] — Introduction: Codex’s goal, state of stablecoin chain wars, importance of FX.
• [02:58–07:54] — Dissecting the “bear chain” playbook, why other chains aren’t real competitors, neutrality explained.
• [09:24–11:08, 15:17–16:56] — Codex’s core focus: on-chain FX, eliminating friction, the fiat-to-stable challenge, FX market as the endgame.
• [19:09–21:27] — Liquidity challenges, on-chain FX in exotic currencies, breaking the USD dominance paradigm.
• [24:57–31:06] — Building on Ethereum L2: technical, economic, and ideological arguments; Codex’s backstory; moving from contrarian thesis to mainstream.
• [36:57–38:41] — The future: app-chain (narrow) L2s versus general-purpose L2s, how Ethereum and its rollup ecosystem should evolve.
• [52:34–55:17] — Bundlers vs. unbundlers: how Codex stays additive and what Ethereum needs from its L2s.
• [55:30–57:45] — What makes an L2 “valid”; tempo vs. Codex’s alignment; surviving Ethereum’s evolving Overton window.

Tone and Style

The discussion is deeply technical yet accessible, with a pragmatic, first-principles approach. Haonan Li is energetic, occasionally blunt, and always focused on practical customer value over ideology or optics. David’s questions are probing, speculative, and community-focused, challenging assumptions from both Ethereum’s and the crypto industry’s perspectives.

Conclusion

Codex positions itself as the stablecoin chain focused on real-world FX flows and frictionless fiat ramps, rooting its value in both technical neutrality and practical, executable customer needs. Unlike competitors pursuing mercenary TVL or controlled by major fintechs, Codex is betting that “whoever wins on-chain FX, wins stablecoins”—and by tying itself closely to Ethereum as a specialized L2, it aspires to keep Ethereum at the epicenter of decentralized financial infrastructure for the coming decade.