Unchained Episode 936 Summary:

How the Competition Will Play Out in the Great Stablecoin Race

Date: November 1, 2025
Host: Laura Shin
Guests: Rob Haddock (Dragonfly), Sam McPherson (Phoenix Labs / Spark, formerly MakerDAO)

Episode Overview

This episode of Unchained dives deep into the rapidly evolving "great stablecoin race," where crypto-native and TradFi giants fiercely compete to issue, distribute, and win market share with stablecoins. Host Laura Shin leads a nuanced discussion with Rob Haddock (Dragonfly) and Sam McPherson (Phoenix Labs) on the shifting competitive landscape, new stablecoin models and chains, regulatory intrigue, and how both DeFi and incumbent financial players are battling for dominance as stablecoins go mainstream.

Key Discussion Points & Insights

1. Athena's Position and Recent Market Cap Decline

[02:14–11:32]

• Athena Stablecoins Overview:

  • Two assets: USD (crypto-collateralized, yield via basis trade) and USTB (US treasury-backed, Genius-compliant)
  • USD's market cap fell from $15B to $10B after an industry-wide leverage washout and declining yields.
  • "Athena is somewhat pro-cyclical... as the cycle is doing well you get more yield and more people want to be in that asset." (Rob, 06:12)

• Risks and Growth Limits:

  • Capacity for high-yield basis trades maxed around $6–7B, with scaling constraints and increased competition from hedge funds and CEXs.
  • "Athena...will settle at where it naturally sits with organic capacity within the basis." (Sam, 09:21)

• Athena’s Diversification:

  • Now pursuing payment stablecoins (USTB) and white-label products for protocol/app-specific stablecoins to future-proof amid shifting yields and market cycles.
  • "They're doing a little bit of everything because stablecoins will serve a broad variety of use cases." (Rob, 05:55)

2. Stablecoin-As-A-Service and White-Label Expansion

[11:32–18:42]

• Trend:

  • Widely emerging trend of protocols and even apps (Jupiter, Mega ETH, Sui) launching native branded stablecoins.
  • Sam sees this trend as accelerating, especially as protocols seek treasury yield otherwise captured by incumbents.

  "Protocols want their own stablecoin where they can get access to the underlying treasury yield... that trend is definitely here to stay."
  — Sam (12:15)

• Liquidity Challenges:

  • Rob is skeptical about the near-term pace of white-label stablecoins due to difficulties in ecosystem-wide incentive alignment and liquidity bootstrapping.
  • Sam: On-chain, fractional-reserve stablecoins help with liquidity bootstrapping for newcomers in a cost-effective way (high single-digit versus double-digit % for traditional MMs).

3. Bridge, Paxos, M0: Centralized Open Issuance Models

[18:42–21:04]

• These are closely analogous to each other—offering turnkey, regulatory-compliant, backend stablecoin issuance infrastructures.
• The fundamental challenge—"Regardless of the backend, if you want on-chain usage, you must pay to bootstrap liquidity" (Rob, 19:40).

4. Tempo: Stripe-Linked Newcomer and the Distribution Dilemma

[21:04–30:54]

• Tempo’s Edge:

  • Distribution is king—history shows stablecoins with strong exchange or payment partners (USDT/Bitfinex, USDC/Coinbase) break out, others flop.
  • Stripe integration gives Tempo a potentially powerful distribution channel.
  • "If you don't have attachment to a large distribution channel, you're dead out of the gate." (Sam, 22:11)

• Competitive Dynamics:

  • Stripe’s deep integration could alienate other payment service providers (PSPs), making broader network adoption a challenge.
  • Rob: "If it's Stripe-aligned, why would Visa/PayPal/Shopify want to benefit a competitor?" (Rob, 24:38)

5. USAT, Tether, and Ripple’s RLUSD: Distribution and War Chests

[32:13–39:40]

• Tether’s Playbook:

  • Aggressively buying/investing in distribution, leveraging brand dominance (especially outside US/EU), e.g., launching USAT with Rumble’s large audience and a creator economy focus.
  • "In Argentina...people don’t say I want a stablecoin, they say I want Tether." (Rob, 34:33)

• Ripple’s RLUSD:

  • Ripple pursuing stablecoin dominance, acquiring infrastructure and aiming to push RLUSD through acquired channels, leveraging its war chest generated by XRP sales.

• Sam: "Only in crypto can the token come first and you can buy your way into long-term success." (Sam, 38:51)

6. Plasma: Retail-First Stablecoin Chain

[39:40–44:11]

• Heavy focus on splashy TVL incentives and zero-fee transfers to quickly gain attention.
• Long-term sustainability in question; must ultimately secure organic user distribution beyond farming and tokenomics-driven bootstrapping.

7. Arc (Circle): B2B, Multi-Issuer, Base Layer Strategy

[44:11–50:34]

• Circle is targeting over 100 institutional partners for its newly launched Arc chain, focusing on B2B markets and tokenization.
• Unclear if they can bootstrap network effects without major retail/user distribution; may require token incentives and further decentralization to succeed.
• Rob notes that while Circle’s CPN (Payments Network) hasn't seen huge volume, integrated chain + network products may provide an edge.

8. Codex and the L2 vs L1 Stablecoin Chain Debate

[51:20–56:42]

• Codex, supported by Dragonfly, is a stablecoin-focused Ethereum L2 built with optimism tech—emphasizing the liquidity, interoperability, and composability advantages of being part of the wider Ethereum ecosystem.

• Sam (Spark) corroborates: L2s, directly settling to Ethereum, will become more important for payments, especially with advances like single-slot finality.

  "The tight connection with Ethereum consensus will make L2s a much better place to do payments."
  — Sam (55:05)

9. Spark’s Strategy Amid the "Stablecoin Cambrian Explosion"

[56:42–60:01]

• Spark (Phoenix Labs) spun out from MakerDAO (now "Sky") as an institutional-oriented “subDAO,” issuing loans and connecting savings to yield across DeFi and CeFi.
• Deployed capital strategically (e.g., into CME, Coinbase Base BTC borrow market), Spark leverages a cross-chain allocation system to provide stability and yield in the multiplatform stablecoin world.

10. TradFi's "Stablecoin Panic": Banks, Fintechs, and the Regulatory Squeeze

[60:01–67:55]

• Major Banks (JPM, Visa, Mastercard, Western Union, MoneyGram) launch stablecoin projects, use tokens on-chain, or experiment with deposit tokens—motivated by pressure to stay relevant and compete with open systems.

• The ability of banks to extract margin by withholding yield is threatened by stablecoins; it's driving innovation and regulatory conversation.

• "Every single boardroom is talking about stablecoins right now. There is no world in which [you] are not actively thinking about your stablecoin strategy today." (Rob, 62:10)

• Regulatory Nuance:

  • Ongoing wrangling around how interest-rate passthrough, payment stablecoins, and other innovative models fit into U.S. and global rules. Genius Act is not the end, only the beginning, of regulatory change.

Notable Quotes & Timestamps

• On distribution as king in the stablecoin race:

  "If you don't have attachment to a large distribution channel, you're dead out of the gate."
  — Sam McPherson [22:11]

• On why white-label stablecoins may grow slowly:

  "Liquidity is the whole thing. ... it's actually quite hard to align incentives around everybody within your ecosystem."
  — Rob Haddock [13:54]

• On Tether as a brand:

  "In Argentina...people don’t say I want a stablecoin, they say I want Tether."
  — Rob Haddock [34:33]

• On TradFi’s response:

  "Every single boardroom is talking about stablecoins right now. Every single public shareholder is talking about stablecoins right now."
  — Rob Haddock [62:10]

• On why L2 stablecoin chains matter:

  "L2s are going to be much more important for payments precisely because they sit close to Ethereum... these are the types of improvements that will allow L2s to run away with the payments use case."
  — Sam McPherson [55:00]

• On the token-first ethos in crypto:

  "Only in crypto can the token come first and then you can kind of buy your way into long-term success."
  — Sam McPherson [38:51]

Chronological Highlighted Segments & Timestamps

[00:00–02:14]
Opening, stablecoins gaining attention in all major boardrooms, context setup.

[02:14–11:32]
In-depth on Athena collapse, stablecoin models, problems with scaling yield-based stablecoins.

[11:32–18:42]
Stablecoins as a service, white-label models, rise of chain/app native stables, the liquidity bootstrapping ordeal.

[21:04–30:54]
Tempo enters with Stripe, questions on distribution and whether rival PSPs will trust/embrace a Stripe-aligned chain.

[32:13–39:40]
USAT/Tether using media, creator economy, and new apps for distribution; Ripple's RLUSD as a stealth stablecoin war chest play.

[39:40–44:11]
Plasma: Retail-centric chain and the tough long-term challenge of moving beyond incentive-driven activity.

[44:11–50:34]
Circle’s Arc, institutional angle, B2B focus, and token incentive speculation.

[51:20–56:42]
Codex as an L2, Dragonfly’s rationale; why L2 payments chains could 'run away' with the segment.

[56:42–60:01]
Spark’s vision as a stablecoin liquidity allocator/savings portal in a fragmented, multi-stable world.

[60:01–67:55]
TradFi’s fear and adaptation: Banks, payment giants frantically launching tokens, regulatory grey zones, and the shifting financial stack.

[66:05–67:55]
Regulatory future: Act now, rules coming later; new categories ("yield stablecoins") and evolving frameworks.

Episode Takeaways

• Distribution trumps tech: Deep integration or captive channels will continue to determine stablecoin winners.
• Liquidity bootstrapping is the hardest part: White-label stables face daunting challenges if they can't align incentives or cheaply source liquidity.
• TradFi is scared—and adapting: Every bank, processor, and fintech giant is urgently working on a stablecoin plan.
• Regulation is playing catch-up: Expect more nuance, new categories, and ongoing creativity in stablecoin law.
• Ethereum L2s likely key for payment stables: Interoperability, composability, and settlement speed will matter as usage shifts on-chain.

This summary captures the major topics, nuanced debates, and thematic threads discussed during the episode. All quotes attributed and timestamped for reference. Highly recommended for listeners and non-listeners who want a pulse on the future of stablecoins, their battles, and overlaps between DeFi and TradFi in the coming years.