View: Stablecoins are not more profitable than lending markets

Huobi HTX reported that Lido strategic consultant Hasu said in response to X user’s post “Lending DEXs such as AAVE and Fluid have enough advantages to issue stablecoins” that the idea that stablecoins are more profitable than lending markets is one of the biggest misunderstandings in DeFi. Both lending markets and stablecoins borrow money from A and then lend to B, and earn interest spreads in the process. Stablecoins do have implicit convenience gains such as global transferability, but this gain is limited to stablecoins with deep global liquidity and acceptance networks, such as USDT and USDC. Everyone else is fighting for the same scarce pool of funds and increasingly need to pay interest to lenders. There are actually only two advantages for new stablecoins entering the market – excellent distribution (let you borrow at a lower borrowing amount) and excellent ALM (let you borrow at a higher borrowing amount). Which one does AAVE or Fluid have?