First Digital Labs narxiFDUSD

After reviewing the broad market data over the past week, one pattern became impossible to ignore: Crypto no longer runs on $ETH or $BTC. It runs on dollars. The total stablecoin supply, $312.3B now, is not just liquidity. It has become the monetary base of the entire crypto economy. Stablecoins now play the same role that M2 does in traditional finance: they serve as the denominator for every yield, collateral, and leverage cycle in DeFi. Every expansion and contraction in stablecoin supply has mapped closely to the market’s risk-on and risk-off phases. ● Why This Shift Redefines Crypto’s Economy From a macro perspective, crypto has entered its dollarization phase. This shift has three defining features: > Stable liquidity exceeds speculative liquidity: Yield, staking, and perpetual futures are all settled in USD terms. > Dollar rails are becoming the infrastructure layer: Cross-chain flows, RWAs, and restaking activities are now denominated in stable value. > Supply growth equals credit expansion: When stablecoin supply increases, DeFi TVL and trading activity expand almost mechanically. This dynamic means that blockchains no longer represent “alternative economies.” They now operate as parallel dollar economies. ● The Onchain Metrics Here are Stablecoin market share and Supply as of October 2025 (DefiLlama data): ➤ $USDT (57.9%): $180.8B ➤ $USDC (24.4%): $75.7B ➤ $USDe(4.0%): $12.3B ➤ $USDS + $DAI (4.1%): $12.7B ➤ Others (4.9%): $15.3B Total $312B However, velocity is the real signal. When stablecoins circulate through lending pools, perpetual futures, or restaking vaults, credit expands. When they sit idle in wallets or treasuries, liquidity slows. Historical examples show the pattern clearly: In 2020, stablecoin supply grew fivefold, and DeFi TVL rose from $1 billion to $100 billion. In 2022, redemptions erased $10 billion, and TVL dropped by half. In 2025, supply has plateaued, and so has growth. Stablecoin velocity is becoming crypto’s version of M2 money velocity. ● Competitive Landscape Issuers are competing to define how crypto holds dollar liquidity. 🔹Centralized Giants ( $USDT, $USDC ): Over 80% of supply; deep liquidity but dependent on banks and regulators. 🔹Protocol-Native Dollars ( $DAI, $sDAI, $crvUSD ): Backed by staked ETH, RWAs, and vault yields. 🔹Synthetic Stablecoins ( $USDe, $FDUSD ): Use perps and hedged strategies to stay uncustodied yet yield-bearing. 🔹RWA Primitives ( $OUSG ): Tokenize Treasuries yielding 4.5–5.2% and plug into restaking for “yield-backed dollars.” Each answers the same question: how can crypto sustain dollar liquidity without centralized custody? Each design attempts to answer the same structural question: How can crypto sustain dollar liquidity without relying on centralized custody? ● What’s Next? > Stablecoin Expansion Will Reprice Risk: As supply grows, leverage and TVL will likely expand in lockstep. > Yield-Bearing Collateral Will Lead: RWAs and restaking receipts will merge into hybrid, interest-bearing dollar instruments. > Velocity Will Become a Market Indicator: Stablecoin velocity will replace price charts as the leading macro signal for market direction. > Dollar Infrastructure Will Be the New Battleground: Control of issuance, redemption, and composability rails will define the next cycle’s winners: Circle, Ethena, and Falcon. ● My Take From my perspective, this is crypto’s most structural yet overlooked shift. Everyone talks about AI, L2s, and restaking, but everything still settles in dollars. Stablecoins aren’t a byproduct of liquidity. They are the liquidity. Until supply expands again, crypto stays in quiet monetary tightening. If DeFi is the economy, stablecoins are its money supply, and that supply isn’t growing.

💵 Top Stablecoins by Market Cap (2025) 1️⃣ USDT (Tether) — $174.34B 2️⃣ USDC (Circle) — $74.02B 3️⃣ FDUSD — $14.30B 4️⃣ DAI — $5.09B 5️⃣ TUSD — $4.44B 🔹 Stable dominance grows as crypto volatility rises. #Stablecoins #Crypto #DeFi

Risk Factors ➡️Token unlocks and dilution large team/foundation/investor allocations and scheduled vesting or unlocks can create predictable selling pressure that outpaces demand. ➡️ Airdrop and distribution volatility mass airdrops or marketing distributions can trigger immediate sell-side liquidity as recipients realize gains. ➡️ Liquidity fragmentation and narrow order books listings across multiple exchanges can split liquidity, increasing spreads and slippage and making the token easier to manipulate during low‑volume windows. ➡️ Regulatory uncertainty — stablecoin and DeFi infrastructure projects face concentrated regulatory scrutiny; adverse guidance or enforcement actions can quickly compress valuations. ➡️ Stablecoin and protocol risk (USDf dynamics) — if USDf or yield strategies underperform, depeg, or reveal insufficient reserves, demand for governance token FF may collapse. ➡️ Market / macro correlation — as a newly listed/high‑beta token, FF will amplify broader crypto declines; a BTC or macro risk event will likely cause outsized drawdowns. ➡️ Execution and adoption risk — mainnet/features might underdeliver, partners may delay, or node/operator economics may prove unattractive, all of which reduce on‑chain utility and token demand. ➡️ Concentration of holdings — high allocation to early backers or foundations increases the systemic risk of large sell-offs if those holders choose to realize profits. ➡️ Smart contract and custodian risk — protocol bugs, bridge vulnerabilities, or custodian failures for reserve assets would materially impair confidence and price. Catalysts and Bullish Drivers ↘️USDf adoption and yield sustainability — strong growth in USDf circulation, reliable reserve attestations, and attractive, sustainable yields for sUSDf would increase FF demand for governance and staking. ↗️ Major exchange listings and liquidity partnerships — deep, reputable listings and market‑making support reduce slippage and attract institutional flow. ↗️ RWA integrations and treasury yield sources — successful tokenized real‑world asset (RWA) partnerships that generate reliable yield improve protocol economics and narrative. ↗️ Transparent, predictable unlock schedule and buyback/burn mechanics — governance that limits shock dilution or actively retires supply supports price stability. ↘️ Real utility uptake — adoption by node operators, enterprise partners, or developer ecosystems that pay fees in USDf/FF creates organic token sinks. ↘️Favorable macro or altcoin market cycles — broader liquidity inflows into risk assets can supercharge speculative demand for new protocol tokens. Short‑ and Medium‑Term Outlook (0–90 days) ↘️ Expect elevated volatility around listings, airdrops, and token unlock dates. Short‑term price action will be driven by liquidity events and speculative flow rather than fundamentals. ↗️Probable pattern: initial post‑listing pump on retail and airdrop activity, followed by correction and consolidation as vesting schedules and selling pressure normalize. ↗️Monitor USDf reserve reports, exchange order‑book depth, and large wallet flows as primary real‑time signals for whether the token is absorbing or bleeding supply. Medium‑to‑Long Term Outlook (3–24 months) ↘️ The long‑term case depends on two linked outcomes: (1) USDf achieves durable product‑market fit with transparent, audited reserves and sustainable yield mechanics; and (2) FF accrues meaningful on‑chain utility (staking, governance capture, fee allocation). ↗️If both succeed, scarcity narratives, protocol fee capture, and ecosystem growth can support materially higher valuations (multi‑x from initial prices). ↗️ If either fails — weak USDf adoption, regulatory clampdown, or persistent dilution — FF risks secular depreciation and structural illiquidity. Risk‑Managed Playbook (practical rules) ↘️Position sizing: limit single‑trade risk to 1% of portfolio; total $FF exposure should be a small satellite allocation until fundamentals prove out. ➡️ Entry signals: require confluence — rising on‑chain demand (wallet inflows, staking growth), clear OBV/volume pickup on breakouts, or successful technical retest of resilient support. Defensive rules: tighten stops around known unlock cliffs and airdrop distribution windows; avoid adding into low‑volume green candles. Hedging: consider short correlated large‑cap exposure or options (where available) around major events to limit tail risk. Due diligence: track weekly reserve attestations for USDf, public vesting schedule updates, and major exchange custody announcements. Key Metrics to Monitor Continuously - USDf reserve size and audit cadence. - Net flow into sUSDf / staking participation rates. - Exchange order book depth and spread on major pairs (USDT, USDC, FDUSD). - Large wallet movement and exchange inflows/outflows. - Token unlock timeline and foundation/team sell schedules. - On‑chain activity: active addresses, node operator counts, and transaction fee accrual. Final assessment: $FF is a high‑reward, high‑risk proposition. Its upside relies on real adoption of USDf and demonstrable protocol economics; its downside is driven by dilution, liquidity fragility, and regulatory exposure. Trade and invest accordingly, privileging objective, event‑driven confirmation over narrative hope.

RT @DOLAK1NG: Stablecoins aren’t all the same. We see “$1” across USDC, USDT, PYUSD, FDUSD, crvUSD, GHO… Not every “$1” is created equal.…

RT @DOLAK1NG: Stablecoins aren’t all the same. We see “$1” across USDC, USDT, PYUSD, FDUSD, crvUSD, GHO… Not every “$1” is created equal.…