How stablecoins could bring a billion people onchain

Transcript

gmgm welcome to web3 Academy your one trusted source to capitalize on the next big phase of the internet don't get caught in the hype cycle I'm Jaybird joined by my co-host Kyle reedhead and we believe that stable coins are going to change the world that's why we're carving a path for doers to confidently build and invest in web 3. I completely agree it's funny stablecoins is the thing I think is probably gonna not change the world the most but probably have a massive massive impact in the coming just like few short years right so I think this is a big deal and I'm excited to talk about it today yeah I get to have fun with the intro every time and mix up with that what is going to change the world but today is the one

you're right where it's probably our strongest belief and thesis for the growth of crypto and blockchain so let's set some context Kai before we jump in to discussing why we need stable coins and why we believe they're going to grow to a billion people where are we at right now and also how you can capitalize on the opportunities stable coins obviously stable coins don't go up and downs there's not much you can make in stable coins unless you hold them when prices are going down then you do it all right but in a bull run in any run how can you make money because of stable coins we'll talk about that as well at the end so make sure you stick around that's a great point because I feel like most people probably don't

know how to do that so we'll make sure you know okay so size of stablecoin in 2022 stablecoin settled over 11 trillion dollars on chain this is over 10 times the amount that PayPal settled in 2022 wow and it's just below the amount that Visa did in volume Visa did 11.6 trillion in 2022. I've heard though so far this year stable coins are ahead of Visa now so huge huge volumes and what's remarkable is this has only been a few years right since like

2019 maybe it's I think five years maybe incredible gross for a new Global money movement system over 25 million blockchain addresses hold at least one dollar in stable coins in comparison with traditional finance a U.S bank with 25 million accounts would rank as the fifth largest in number of accounts in the U.S it's a big deal approximately 5 million blockchain addresses send stable coins every week that's not unique humans That's Unique

wallets and probably some are Bots but like gives you a good idea of numbers that's interesting yeah yeah the supply of stable coins has grown oh here's the number from five years ago it was three billion was the total supply of stable coins to over a hundred and twenty billion today and it he it actually reached 160 billion previously well it's impressive now unfortunately we can't have an episode around stable coins without mentioning the collapse of Terra Luna so that happened back in May 2022 and nearly 60 billion was evaporated basically from the markets as a result of that which is part of what we'll talk about why stable coins has

not maybe moved as fast because there was that black mark on them gotta mention PayPal we mentioned PayPal earlier that it's being dwarfed by stable coins well those guys aren't idiots they're seeing that so they launched their own stable coin p-y-usd and let's remember PayPal has 70 billion market cap as a public company and over 420 million active users and they just launched that stable coin so it's all all new and the market current predictions of the market for stable coins will grow to trillions of dollars of supply and hundreds of trillions of dollars in transaction

value in the coming years as a result of more people seeing what we're going to talk about today yeah I think for those that don't get it stable clients are probably going to be the thing that onboards the most people into this space everyone guesses gaming and you know what maybe it still is like if a viral game comes in the next few years it might kick stablecoin's ass I don't know if the uh we'll talk about it but if the ux gets to where I think it will the next year or two stablecoins takes over it's so inevitable it's a guarantee that stable coins will be the future of how we use money how fast that happens I'm unsure but like we're our I mean these numbers are massive and it's

only been five so we're like we're reaching that inflection points it's um Now's the Time to be talking about them and also the time to be figuring out how to capitalize on that opportunity there's also a hot story right now around maker Dao vitalik and Solana we're not going to break that down in this episode but on Wednesday tomorrow we got a newsletter coming out on paragraph make sure you check out that newsletter you can learn all about that hot news and you can collect our newsletter on paragraph let's take a minute to hear more about them modern newsletters are built on paragraph that's right paragraph is a brand new newsletter platform that combines the best parts of web 2 and web3 to

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believe this is the future of newsletters because it's a profound engagement it creates between creators and fans so whether you're a Creator writer or an Avid Reader it's time to check out paragraph and capitalize on the opportunity of being early welcome back okay Kai we're talking everything stable coins let's start off as we always do as marketers and business owners there's always a problem that a big product is going to solve why do we need stable coins yeah so stable coins are I mean if for those that have been in crypto for a while and have had this like sort of dream of you know crypto kind of being

the new Financial system a lot of people are like yeah what do we need stable coins for right it's just Fiat money so what's the point it still inflates away and so a lot of people like well Bitcoin or eth are going to be the new money which you know because that separates itself from the state it's not controlled by anyone it's not being inflated away et cetera et cetera which like yes you're right I do think that is a very valuable thing to have just like we have gold but with gold we also have Fiat money they both exist they both have different use cases and I think well maybe 20 30 40 50 years from now we might use something like Bitcoin or eth as like pure money and that's the thing we'll buy our coffees with and things like that I don't see that as being the

future or like the near future right and I mean near future is in like 10 years 20 years I don't even think that that's the case even like you got like El Salvador using you know lightning Network and trying to make that a thing it to me doesn't make any sense and the reason is our world Works in fiat currency and that's not something that changes super quickly especially because you have Bitcoin that goes up and down like you know 80 percent in a year that's just it's not it makes no sense right right you have people all over the world like Argentina turkey where their currencies are going up or down that much first like the US dollar and they're fleeing from it it's the last thing they want right and so again I'm not saying that people don't are fleeing

from Bitcoin or fleeing from eth absolutely not of course they want to hold on to that stuff because it appreciates over time but it's not the thing that they're necessarily going to spend and it's hard to price a pair of jeans or a coffee in something that is that volatile and so the world still is in Fiat and we probably are going to do that for a long time now what's interesting though is stable coins which is taking Fiat and putting it on chain has a lot of benefits to it it is a 10x Improvement on the way that money is used currently right and so I think it's a natural it's an easy transition look long term I think we do go to some other asset that is not Fiat based becomes the main source of money I

think we're a far far away from that like what did we say there's like I don't know 20 million people Max that are on chain right now and it's not even that like there's no way it's at so like no we're not going the whole world using eth you know or Bitcoin it just doesn't make any sense and so stable coins is a natural fit and it seems like it's a natural fit because it just solves a lot of problems for the existing World while not changing too much for merchants or for just normal users stable coins are an easy app that our parents will use we always talk about well will my mom use this how will something go mainstream most things on on chain are not going mainstream stable glass very easy because no one knows that it'll be a stable coin versus just a normal US

dollar right you have no idea in terms of when the apps are set up properly like for example those using PayPal right PayPal is very easy ux once you're using just stablecoins either you won't know the difference but PayPal will use stable coins for a few reasons which we'll get into so there's kind of three big reasons why I think stable coins are basically inevitable inevitable sorry the first is let's see where this the first is there's a lot of people that just don't have Banks or are under they don't have access to digital fiat currency Unfortunately they don't have access to a way to store their money and so stable coins is an easy way to do that anyone can get a bank you just make a metamask a lot of coinbase while anyone in the

world can do that takes a second or two and all of a sudden someone from around the world can send you money and it's in dollar form so there's one way and then you can go and take loans out against it you can do Financial things with it that people in India and you know other parts of the world Africa Etc can't really do so like there's one now for us in the US for us in Canada in Europe we don't get that maybe we do but for the most part we don't and so that's actually the fastest growing area of on-chain stuff right now is places like Africa India et cetera because they don't have any other option so it's the that's the easy one it's a win for them because they just they don't have another option now we do

in Canon us and so why does this make a big difference for us well the other thing is in terms of merchants so as a consumer like a user I just use my credit card right or my debit card or cash whatever and it's it's very easy and normal to me for a merchant though it's very costly for them to accept credit card payments especially on smaller payments right think of like when you buy a I don't know a chocolate bar or whatever it's taking up a good like quarter of the those revenues just on like stripe or credit like your your Visa payment or whatever right so convenience stores actually don't make any money on you doing that like coffee shops don't like when you come and you just buy a coffee and use credit card they don't make any money on that they are hoping that

you're gonna buy a coffee and some donuts or a sandwich or something so they can actually make some money so once we get to the point where stable coins are just the thing that's backing your credit card all Merchants are going to go that way because they just they can make and save so much money by doing that so that's like an inevitable Thing Once the ux is good enough which we'll talk about and then the last thing is obviously inflation right so you've got places like Argentina where their currencies are inflating at like 50 a month which is insane and they want US dollars they don't care if it's a stable coin if it's cash if it's whatever they're just like just give me a US dollar turkey same thing Lebanon same thing like many countries are doing this and it's hard like in Argentina for

example they're not allowed to have US dollars or there's like certain ways you have to do it it's very expensive to switch into it and so stable coins make that there's no it's permissionless right it's free to do it and they can't stop you from doing you just go make a metamask wall and anyone can send you your US Dollars and so whether that's payments from a company it's you know remittances from people that live in the US that want to send their family money back into to you know Argentina or Africa whatever stable coins just make that so much easier and so much cheaper and so I think those are the three big things one is just banking the unbanked two is just fleeing inflating currencies and reducing a ton of fees on remittances and the third one is just for merchants and this is in the U.S in

Canada et cetera I mean I was at Port Staley which is like a Beach town near London where I'm from and there was a sign on the table and it was like you can pay with credit card but we really really prefer that you don't and they're like we actually have an ATM machine on site that has zero fees and we hope that you'll go use that and pay our staff in cash because we save money and then also they make more money with their tip so I was like okay fine I went and did that for the rest of Man stable coins is just gonna change this for sure so those are the three big reasons why I think stable coins are just a no-brainer of an innovation we're not quite there yet for it all but I think it's coming really fast as Jay just alluded to with all the

you know growth and stats that he just said the thing that's important to remember too is if we go back to the start of the internet we've solved a lot of problems with the online world and we like to compare the online world to the on chain world you know if you think about first we brought all the knowledge and information in the world online and as a result we made it frictionless to access knowledge information we made a cross-border and we made it instant that anybody could do that from anywhere in the world which led to incredible

economic gains incred better life for a lot of people in the world right for those that are not putting this together like pre-internet you had to use books to get information and so you only had the books that were in your country and a lot of times especially in some countries they won't bring in certain books from other countries because they don't want you to know the history is there and so that was your only source of information which is not a great it one it's not like super scalable and it's stuck to whatever's just in the library of your city or town right exactly in the same way after the internet brought all of the knowledge and information of the World online we then brought all of the stores online

and all of the products online with e-commerce so now you could buy any good from anywhere in the world instantly you could you didn't have to be limited to what your local mall or local retail stores provided right now it became e-commerce became Global right also with Social Media communication became Global in the past if you wanted to speak to somebody you had to pick up your phone and call them and if they were outside of your country if you were going cross-border well you had to pay very high fees unless I guess maybe

Skype sort of came along and was the first disruptor to that but there was a lot of fees associated with contacting people outside of your country and social media came along and said no we're going to allow sharing and contacting of each other instantly frictionless cross-border right so we've solved some of our major issues with access to knowledge access to each other through communication and access to goods and services all done online but money has stayed in the past where still today if I want to send money to Kyle right I can do that because we're

in the same country but it's has fees associated with it and it's instant to a degree right but not sure yeah it takes a few minutes in Canada but to go across country it takes forever right exactly so money is still very difficult to send within your own country it's easier but if you try to go cross-border with money it's ghost expensive slow yeah it's actually funny that you just said we it the internet took communication and made it seamless frictionless in cross-border it's funny to think of talking cross-border but it's true now we think

of talking buying things like Commerce and knowledge we don't even think about cross-border it's not even something you even think about when you're doing it because it's so natural but money we still do and I think what stablecoins does is it removes that whole cross border that you won't even in a few years from now you won't even think about the difference of sending some money in your own country to another country there will be no difference which right now there is a big difference right it's a big challenge even because you got to split into currencies even that will become very seamless and frictionless right which is kind of interesting to think about it has the card to wrap your head around we're going to talk about apps but it will most likely within 10 years probably sooner Kai will say it's going to be sooner than this but I'll go

conservative and say it's within 10. you will be able to from your phone send money to anybody in the world instantly with low fees using stable coins I think what will happen is so think of so first of all a lot of fintech companies are now beginning to build on top of stable coins PayPal obviously is one but this is going to be there's gonna be a wave of this led by usdc in their regulatory stuff that they're having with coinbase and usdc kind of leading the way here Circle leading the way here I think we're going to see a ton of innovation here what's going to happen is for anyone that's used PayPal if you are in the U.S PayPal or venmo are extremely seamless you just have a

person's name and you just you know you just click and send and it's so simple right you don't think about fees because it costs you nothing you don't think about anything it's all immediate now that doesn't work when you go to different countries because most countries don't some countries don't have PayPal I mean they have to get a different currencies it becomes a little like not the greatest like PayPal Canada kind of sucks it's really just good in the US and same with venmo it doesn't even exist in Canada and it's kind of like for the Europeans listening it's like revolute in Europe it's a great app you guys all love it in Europe in Canada I'm like well it doesn't work for me right so it still doesn't really solve that problem when you're going from country to Country and I think what will happen

is we'll have apps just like PayPal and a revolu that will feel and look just like that but it will be for the whole world it won't be for just one country maybe that's what like Twitter actually you can say that's Twitter that's where it goes I think that X and Telegram and these apps whichever ones are really in the know are going to build these and they're going to become the PayPal which is just like Global which is gonna just be insane because for anyone who's traveled or does business in other countries like this is a massive massive problem or for anyone who lives in a country that's not the US it's a massive problem right especially trying to get US Dollars which most countries want and need and so save coins just completely fix that and once

that ux gets you know perfect well and and not only is it a problem on the user and the retail and just as consumers it's a problem on the Enterprise and as well when you have businesses which are spending billions of dollars every year globally because Commerce is global now so you're a large American Business there's a good chance that a lot of your goods are coming from China well think about your finance department and your accounting team and the trouble that they have to go through to pay all their invoices and to deal with all of these vendors all around the

world the industry of transferring money there's hundreds of billions of dollars made every single year just on the cost to transition from one currency to another right those extra fees that are on that which is like you know three percent is what my bank takes every time I want to switch from Canadian to US why what do they like what is it the reason no Services they provide there yeah they don't do anything so that's ridiculous then the like tapping your credit card or paying for anything which everyone does in every country around the world again Visa Massacre take one to three percent on all of those hundreds of billions of dollars coming there again doing nothing for the most part and remittances you think of like Western Union all these other ones just sending

money from one country to the next they take 20 or whatever like there's so much money being made for creating zero value essentially right yeah well and it's also I'm trying to think of an analogy right now but it's like it's handicapping all of our abilities to build and connect around the world so we don't notice this yet and especially you've mentioned this already Kai especially in G7 countries leading developed countries we don't have this problem as much which is why we don't use stable coins as much

unless you're trying to interact with people in other countries but once you turn on that that faucet maybe more so allow that allow stuff to move through the pipes easier what that does to think about an entrepreneur who wants to start a business somewhere in the world and doesn't have access to Capital well how do they get access to money well they need some way to raise Capital boom stable coins like there's so much I think that we don't even realize the power of if we get to a billion users with stable coins

maybe I should say when what that will allow in terms of Economic Development the ripple effect of that it's going to be absolutely massive I think because everything's segmented right now the world is all segmented because of these different currencies and once everything goes on chain it's like it just like puts money on steroids and it can just move freely and so easily to anywhere in the world and these borders that we think of become no longer just in for money their border still physically but those borders leave us and anyone I mean we'll probably all use the US dollar if the US figures this out if the U.S listens to this podcast episode right now they might go oh they're talking about getting the US dollar all over the world seamlessly and just

letting them flow around like what a great idea right now they're like no we need to get rid of this whole thing and it's like what and that's just going to change the world completely if that happens which I think it will as long as the US doesn't that up what is stopping us from getting to a billion people on stablecon Sky yeah I would say there's like probably two main things the first one I would consider like regulatory slash just like sentiment around the stuff but probably more regulatory and the reason I say that is again most of this is US Dollars yes there's like Euro stable coins there's a Canadian stable coin like no one uses them they don't have meaningful adoption and they don't really have any reason to for the most part and so you kind of need the US to be on board with this

because the way stable coins work is you take real Fiat money you put it in a bank which is in the U.S and then you MIP something on chain and now it's Unchained so it's free and cheap and settles immediately that's the whole idea of the tech but there's still a Fiat money there so meaning you need some regulation and some safety around that and people are still currently scared I would say it's probably not necessarily people it's more businesses right you don't have big companies around the world currently using stable coins because they don't have regulatory Clarity and they also have the issues of like terraluda blowing up the issues with like was it the SEC or whoever was suing binance over like busd and whatever it's like it's a bit of a show and so you have that problem which I think is getting fixed and probably

will get fixed relatively soon so that's one big problem users don't really care like you see a ton of adoption in Latin America and in Africa because they're like whatever I don't give a I'm just going to use this stuff anyway because it's just a 10x on the Innovation right like it's way better than their alternative so I don't think that's really holding back the people what's holding back the people right now is the ux of it all what's interesting though is like the ux is actually way better than the traditional way to access us digital dollars because right now you need a bank account which means you've got to go physically somewhere you've got a kyc you gotta have like documentation you've got to like usually share your social insurance number and sign some documents and blah blah blah blah right

which is a pain and then it's like that works in your country and then it's like it's not that great it's actually terrible if you ever like I hate going to my bank it's the worst ux whereas like downloading a metamask coinbase wallet takes 20 seconds and then you write down your 24 words and boom you're in the system and so like it's actually a way better ux the world just doesn't understand that yet at least not again in U.S in Europe in Canada Etc and for us it's somewhat easy to use a bank and we've just all done it so that's just normal we don't have a reason to go off the other way yet whereas like obviously places in India and Latin America that just don't have Banks there is a no-brainer for them so I do think

as the ux improves and by ux I mean like sure the wallet experience improves more people will use it especially in you know Africa and India Etc but I I think in terms of the ux of stable coins being integrated into apps like PayPal like revolutes like you know just whatever else we're using once we have the ability to like the problem right now in the US Canada Europe et cetera is like I just have a credit card and I can tap that on anything and it works all around the world for the most part and that just takes my money and it works right it's hard to get me to move off that now when the same thing happens where I can take a credit card and I can just pay

with that credit card and instead it's using stable coins and I'm not having to pay to like pay one to three percent to my bank to switch currencies and all that okay I'm gonna use that easily and most people are going to start to use that they won't use it because it's a stable coin they'll use because they save three percent on all their transactions right and then also Merchants will want that because they save a ton of money and so they'll start marketing it they'll start preferring it they'll start asking for it and they might even start not using the alternative and only using that so that's when this thing becomes completely inevitable and everyone uses it is when the ux of using stablecoins becomes the same as using just normal Fiat money which is coming very soon and I think will happen

in the next I mean we already have that was it called gnosis pay and Solana pay even which are basically just tap your phone and boom it's done so like those kind of things are going to make this super super seamless and those are already happening now they're new so like we need some time and not all Merchants use that but like Solana pay just got integrated into Shopify right gnosis pay probably will be next why not and gnosis pay is direct from custodial wallet right as a credit or it's a debit card I guess but same kind of thing so like when those happen or like we just mentioned Twitter and X starts to allow you to like message money instead of using e-transfer or even going to a PayPal you just do it in the apps you're already using like Instagram or Twitter

and you just text and say send 100 bucks to Jay and that's powered by stable coins like then we're all using it well and I think that like the it's important to remember that the reason that is possible Right will be yeah I mean it is possible right now but is because of interoperability and composability and that is why stable coins will get us to a billion people first but also why I think we're gonna see this exponential rise that we're currently already on but that is not going to stop because it will be so easy if you like if you're an app like Twitter and you wanted to enable sending of money

yeah you know like PayPal has spent 40 years or 50 years in business trying to get the licenses and figuring all that and it's still a for them right no they've mastered of course they've been around for so long but now like think of Twitter trying to go and compete with that they're not gonna be able to do that but they can if they use stable coins right so it's just it's easy and I mean even PayPal who's been doing it for forever is already moving to stable coins as well right so of course that's where we're gonna go yeah the one thing just to go back to regulation that I want to mention quickly is it is interesting I was reading a report recently out of the recent G20 and they were talking about how their there's a lot of conversation around crypto within

the G20 and for the most part there's a lot of they're on the same page they all agree but the one thing that they're seeing that they don't agree on is stable coins because there is such a difference between developed countries versus emerging markets and Emerging Markets don't favor stable coins because it devalues their own currency because if you're Argentina it's the same way Argentina doesn't want too many people to have US dollars because if too many people have US Dollars then the Argentine and peso basically becomes useless and the powers want the Argentinian peso to still be useful because that's you know that's what

their Reserve is so there is this in the developed World there might be I mean you can't stop it right it's non-custodial so what are you gonna do unless you're gonna like I don't know shut down on chain access within your country I never thought about that the consequence of this like for sure this is happening but the consequence is I mean already I think the US is 80 of all transactions around the globally occur in US Dollars that goes like parabolic close to 100 if this at least digital transactions will go this way if they all are this a stable coin in US Dollars yeah that's very interesting it does give a lot more power to us that's for sure now I think it's fine because in the long run we have the solution which

is things like eth in Bitcoin which will be the like eventual currencies but we have this transition period which is gonna take 10 20 30 years where I think stablecoins will be that solution for sure yeah the other thing that I think is important to recognize is there is this like chicken and egg problem stable coins are ready to solve all these problems that we discussed but there's just not enough people on chain we only have 20 million people on chain how do we get to a billion users well but I think this is again where you have the web screen wallet or the D5 mullet right yeah we're not going to get a billion users that download a metamask wallet on

their Chrome browser that's just never gonna happen I don't even I'm sure a billion people don't even like use Chrome I don't know how many people use Chrome but it's not that so we're not going to have a billion people using stable coins from coinbase wallet from from metamask any of that they will use stable coins not knowing that they're using stable coins they will use stable coins from fintech applications that it just looks like a US dollar they probably won't even call it pyusd or usdc or whatever you actually might not even know they might just say it's USD like my guess I don't know for sure but like if Twitter ever was to do this why why do they need to say what the underlying stable coin is like just say it's US dollar and who cares what it is underneath the users themselves might

not care we will as well as web3 people will be all pissed off and it doesn't say which one like well what if I'm using usdt I don't want to use that like you know what I mean but like eventually I think it probably just goes as US Dollars that's it and that's when the billion people use this and they just again they don't know that they're using it it's kind of like Reddit nfts right now right um Reddit avatars are easily the biggest thing happening at tease but it's because people have no idea they're using nfts and they just they signed up for it in a web two-like way they're not using a metamask wall Okay so I believe in the future of stable coins I'm stoked I'm fired up I want to capitalize on the opportunity obviously can't invest in a stable coin

itself it's the equivalent of investing in US Dollars and buying US Dollars which is a deep currency slowly right but that's also a store of value for a lot of people around the world sure so there's a start use stable coins if you're not how else can somebody capitalize on the opportunity yeah so check out our Pro report that's coming out next week on Thursday we're doing a whole Pro report specifically on valuable cruel and this what I'm going to explain here is essentially that every app every use case everything that happens on chain makes money the same way there's value that's accruing for anyone to capitalize on um and we all can do it and it doesn't matter what the use case is so the way

that I'm about to explain how you can capitalize on stable coins reaching a billion users is the same as how you can capitalize on friendtech getting I don't know 100 000 users in two weeks or base getting however many people or the next nft Mint or whatever it's all the same and what I'm saying here is so we understand that moving on chain is removing friction for transferring money right it's costly it's slow there's all these payments Etc to do it in the normal traditional way moving on chain gets rid of almost all of that now the reason it does that is because you're using block space you're making transactions happen via blockchains and to do that there is a fee but it's very very small at least on layer twos to make all that happen right so whether using Solana or optimism or arbitrim or

bass or whatever every time that you transact with a stablecoin you make a payment for a coffee you use Solana pay on Shopify you use this gnosis pay thing to buy whatever coffee your rent anything anything that is powered via stable coins there is a fee that's associated with that now it might be you paying it and it's a penny to make that transaction it might be the app like PayPal paying for it who cares who knows doesn't really matter it's super cheap and irrelevant to you but there's 20 million people or however many that have this transacting every single day which means that that one penny or however much that fee is when you times that by 20 people and then eventually 100 million people and then eventually a billion people those fees

really really really really really add up and where do those fees go they go to the layer two that is being transacted on whether that's base optimism arbitrim whatever and then a portion of those fees go and settle on ethereum and so then ethereum takes some of that now a percentage of that is burned and a percentage of that is paid to people who are staking their eth which means that every single transaction that happens on stable coins as long as it's in the ethereum network on any Layer Two an etholder is making money as a result of that any Staker is making even more if you just hold these then every single stable coin transaction Burns a little bit of ease which means that your eth is becoming a little bit more scarce every single stablecoin transaction ends up

paying e-stakers a little bit of money right a little bit of it and so when those right now we're talking a very small amount of transactions yes 11 trillion dollars was in volume that's quite a bit how many transactions did that I'm not sure but it's probably in the millions I would assume per month I think you're happening on state points right now but when a billion people are using them over the next couple years that goes to billions of transactions happening right or I don't know if it's billions but Millions for sure right and that is going to generate a lot of fees which means the l2s that it's happening on are going to generate money to those tokens and then eth is going to always generate a ton of money from that we're going to burn a bunch of these and we're going to

pay out the stakers a bunch of money for facilitating those stablecoin transactions so even though stable coins have no up or down right you can't appreciate or depreciate they're just worth a dollar it's everyone's using them there's no speculation on them we just use them to do our daily life and every time that happens eth people make money so if you want to capitalize on a billion dollar use case or sorry a billion person use case that has no speculation to it it's completely sustainable the companies that are creating Statewide making a ton of money there's no like speculating on pfp projects and stuff that's not sustainable okay the stable coins of course are and it's generating a ton of value back to the holders of L2 tokens

and eth and so if you want to capitalize you just hold those tokens and you automatically make money every time something happens in stable coins so you can sit there and support and be proud that people are using stable coins and you can profit from it and that's one of the beautiful things of blockchains you can't really do that you can really profit off the internet facilitating frictionless information around the world right but you can by the internet facilitating well not the internet but blockchain's facilitating frictionless payments around the world and that's a huge opportunity yeah I mean ironically it's sort of the equivalent of investing in a bank in the Trad Phi world yeah kind of I guess so well like

investing in circle so that's the creator of usdc that would be your bank version I guess and then the blockchain is almost like investing in like Swift or swiss ch right the protocol that's like allowing the things to happen it's like investing in that I guess yeah what you've never I think that's it's one of the things that is core to the web 3 Academy thesis is that we've never been able to invest in protocols before because we couldn't build decentralized protocols that were owned through a token right we could build decentralized protocols we've that basically they were called open source protocols right that

existed but this idea of a decentralized protocol which is governed and owned through a token didn't exist until blockchain and this is why people this is why I'm so bullish on eth versus something like Bitcoin Bitcoin may or may not work out right Bitcoin may or may not become the global Reserve currency maybe it does I hope it does I support it you know what I mean one day maybe it does maybe it's 40 years from now maybe it's tomorrow like I don't know but I hope it does but it also might not but you know what stablecoins is 100 a better invention or innovation and Technology than the current way that we use Fiat money so it's for sure gonna happen that we use stable coins over the normal way that we have digital dollars

and it does not matter if eth becomes a Reserve currency either it does not matter either way as long as people use stable coins eth wins that's the thing as long as gaming becomes a thing in web 3 youth wins as long as D5 becomes a thing eth wins whereas Bitcoin has to work out it's the only way that holding Bitcoin works out but eth doesn't need any speculative crypto Degen thing to work out at all it just needs stable coins which is gonna happen that's how easy it is to invest in this space and that's a tough thing I think for people to understand funny to say that something is easy and tough to understand all the same sentence yeah that's true well I mean the internet look the internet everyone's

like well this most people didn't get it but it was quite obvious wasn't it like for those that got it no I think I think it's true though it is both easy and tough to understand because it's easy to invest in but can't ignore sentiment and sentiment continues to be bad right there's just no way around that there's every week there's some major headline story that just takes sentiment into the tank and we truck on hey it's just it just gives us lower prices to dollar cost average and two guys any final thoughts before we wrap up on stable coins yeah I think the

other interesting thing from it too is you can look on chain to see what's happening with Sable coins right and so you can always see the growth of these things you can see the amount of people using them the amount of volume that's being traded and again that goes back to your investment in eth right or Solana or whatever like whatever chain it's on and I think that one is really cool investment wise the other part that we didn't really touch on is okay so we already talked about how stable coins make a way better payment way better remittances way better like all of the things to do with Fiat money it also unlocks something that just doesn't exist in money right now which is programmability and interoperability which means that when someone buys your coffee with a stable coin it's on chain right and now you can do something we

always talk about those nfts how you can do things with people buy with mfts you could also do things when people buy with stable coins you cannot do that with fiat currency and so now you you not just have a better Financial system you also then it comes back to like e-commerce and branding and all this stuff where you can actually do cool things because they purchased on chain and so that's also going to be something where a lot of innovation is going to come doesn't really exist right now because it's just not big enough yet but I think that's going to be a huge ecosystem that kind of explodes as stable coins become a bigger thing well it makes me think about about loyalty programs right so right now in order to get points for a loyalty program you have to buy through the app basically like if

you were at Starbucks and you want the Starbucks point you gotta if I buy on my credit card this my Starbucks points don't they don't know that I bought it right there's no connection between my credit card and my Starbucks account so I have to buy on the app right but in the future think about how much easier it would be for anybody to start a loyalty program right because again you could say oh we want to reward anybody who buys or spends this amount of dollars in our store it's interoperability is crazy though I hope because like I mean you can just look at let's say you have the wallet for Starbucks the wallet for the stores in those specific locations and

you see where all the wallets that are interacting with them now you know all the Starbucks customers in Seattle or in wherever as cool as that is I also think privacy things will come into play here and we'll probably get rid of some of that so it's not going to be completely transparent in that regard I don't know how that's going to work out that's a whole other topic but we're gonna need some of that because as much as this is cool and you can give certain experiences and understand customers and blah blah blah also a little bit too much you know like what if someone's gone to the sex store in Dallas and you can see what they're buying that can get a little bit weird I don't know okay what did you and your girlfriend do this again what do you get that

we golfed okay relax sure yeah yeah me and Sam call it golf too man so what happens when you get a kid you got code words for everything that's a wrap on today's episode make sure you check out Wednesday's podcast is with Zen co-founder of web3 auth great story talking about not stable coins exactly but I'll wallet ux is going to bring more people on chain and how it's improving and he tells great stories from McDonald's and working at the ethereum foundation so listen to that if you're not subscribed to the newsletter make sure you subscribe see you around Twitter see you around Discord have a great week everybody thank you for listening to

web3 Academy your one trusted source to capitalize on the next big phase of the internet if you enjoyed this episode please share it and subscribe or follow so that you don't miss the next one while you're at it there's a link in the description for a free newsletter where we provide timely and relevant web3 insights so you can confidently build and invest in web 3. make sure to subscribe today one final note this podcast is for educational purposes only and nothing we say is financial advice crypto and Webster are risky and you should never invest more than you're willing to lose thank you friends and see you in the next one