Written by: imToken

How many categories of stablecoins do you know?

As stablecoins gradually penetrate into multiple scenarios such as global payments, DeFi, and safe-haven storage, it is no longer a concept that can be defined by a unified narrative. Different users have huge differences in their understanding and use of stablecoins - it can be the main tool for cross-border transfers, or it can be a core component of on-chain revenue.

This means that its usage scenarios vary from person to person and are born out of need. Driven by diversified needs, a multi-dimensional classification framework based on user intentions, risk trust, and technical architecture has essentially become the key starting point for understanding the stablecoin ecosystem.

This article attempts to reconstruct a stablecoin worldview from the perspective of users, and from the three dimensions of user goals, risk models, and technical architecture, and to build a stablecoin cognitive framework that is truly based on user needs and adapted to usage scenarios.

I. Panorama of Stablecoins in the Traditional Sense

The crypto world is full of narratives, but stablecoins have always been an eternal theme.

In the traditional narrative, the market has long been accustomed to the "anchor mechanism" as the core, and stablecoins are mainly divided into three categories:

• Fiat currency collateral: Such as USDT, USDC, etc., 1:1 anchored to the US dollar, with strong liquidity and high acceptance;
• Crypto collateral: Such as DAI, RAI, through over-collateralization of ETH and other assets to maintain the link, emphasizing decentralization and anti-censorship;
• Algorithmic stablecoin: Such as the collapsed UST, relying on mechanism design and market expectations to regulate prices, without the need for real asset collateral;

In addition, there are stablecoins anchored to non-US dollar assets such as gold and the euro, such as the recently popular Tether Gold (XAU₮), each of which represents one ounce of gold, supports on-chain transfer and physical redemption, and is currently stored by Tether in its own vault in Switzerland, with a holding scale of 8 billion US dollars, becoming one of the world's largest private gold holders.

In the past few years, this classification framework has provided us with a preliminary entry point for understanding stablecoins, but at the usage level, this way of classification by anchoring mechanism has actually become increasingly difficult to meet the understanding and selection needs of diversified users.

The core reason is that with the breakthrough of stablecoins, users are not all on-chain traders or DeFi players, which makes it difficult for a single anchoring mechanism dimension to answer the questions that users care about most: "Is it suitable for me?" "Is it safe to use?" "Can it be used on the chain I often use?"

For example, USDT and USDC are both fiat-collateralized stablecoins, but their reserve structures, compliance levels, and market trust vary greatly. At the same time, new regulations (such as the GENIUS Act and MiCA) are also using usage and compliance as the basis for classification, which further makes it difficult for traditional classifications to match the actual policy framework.

II. Dilemma of stablecoin classification under new variables

In an interview not long ago, Tether CEO Paolo Ardoino explained: During the economic downturn since 2020, some developing countries have been hit hard, with soaring prices, depreciation of local currencies, and high unemployment rates, which have caused a large number of families to face financial difficulties. Stablecoins such as USDT can meet the needs of these families to a certain extent and are used for value storage, cross-border remittances, and daily payments.

For this reason, many users in Latin America, the Middle East, South Asia and other regions have become global users who are exposed to the crypto world for the first time. They use stablecoins because of the depreciation of their local currencies and the difficulty of cross-border transfers, so they only care about their stability, fees and whether they can withdraw cash at any time.

In contrast, Crypto native players - experienced on-chain users, arbitrageurs, and institutional traders, have completely different concerns about stablecoins. They are more pursuing native liquidity, protocol support, combination efficiency and arbitrage paths, rather than just anchoring mechanisms.

This also means that the differentiation of user groups is becoming increasingly obvious. The stablecoin track has reached the point where it must jump out of the traditional framework of "fiat currency mortgage/crypto mortgage/algorithm anchoring" and reconstruct the classification logic from the user's perspective. From this perspective, the "change" of stablecoins is essentially the result of the joint promotion of user demand and market ecology.

This includes the explosion of stablecoin application scenarios (from DeFi staking to cross-border salary payments), the differentiation of user groups and usage needs (from capital preservation to high returns), and the improvement of the regulatory framework in a macro sense (from EU MiCA to the US GENIUS Act). Therefore, in the eyes of users, it has long been divided into several stablecoin worlds:

• Crypto novices need "simple and safe" stablecoins, where they can safely store funds and gradually learn;
• DeFi enthusiasts focus on "income potential" and use stablecoins for lending in Aave and liquidity mining in Curve;
• Experienced traders pursue "extreme liquidity" and need stablecoins that can be quickly exchanged on mainstream exchanges;
• Global users pay more attention to "low-cost cross-border payments", and on-chain fees and arrival speed are core indicators;

This is destined to make the traditional classification system gradually ineffective in the context of increasingly diversified needs.

In short, for the current Web3 world and stablecoin track, there is no "best" stablecoin, only the "most suitable for a specific goal" stablecoin.

3. How to build a multi-dimensional stablecoin worldview?

It is in this context that, in order to allow each user to find the most suitable stablecoin for themselves, imToken proposes a stablecoin classification framework consisting of three core axes:

From the three levels of user goals (why use), risk trust (how safe), and technical architecture (where to use & how to use), it aims to give a clear portrait of each stablecoin and help users make informed judgments in complex scenarios.

1. User intention and financial goals (why use)

This is a classification axis based on user motivation, which clarifies the usage scenarios of stablecoins and directly answers the question of "why use".

As we all know, the functions of stablecoins have long been diversified, and different scenarios correspond to different choices:

• Payment and value transfer: such as USDT (Tron), low fees, wide coverage, and convenient cross-border remittances;
• Capital preservation and risk hedging: such as USDC, suitable for on-chain US dollar accounts or bear market hedging;
• Income generation and wealth appreciation: such as USDe (Ethena), generating native income through hooking mechanisms and derivative hedging models;
• Collateral and leverage use: such as DAI, USDC, USDT, the most commonly used collateral assets in DeFi protocols, are convenient for lending and trading;

This classification can directly respond to the most common questions of users: I want to do X, which stablecoin should I choose?

2. Risk status and trust model (how safe)

This determines how much risk users are willing to take when making choices. Its core elements include reserve composition, audit status, regulatory licenses, etc.

The highest tier is bank-level and regulated stablecoins, whose credibility is rooted in government regulation and the traditional financial system, with USDC and PYUSD as typical representatives. Next are market-leading and systemic stablecoins, such as USDT, whose trust mainly comes from huge network effects and unrivaled liquidity, although its regulatory status and reserve transparency are controversial.

Next are decentralized and on-chain verifiable stablecoins, such as MakerDAO's DAI, where users trust publicly auditable code and community consensus rather than a centralized entity; finally, synthetic assets and algorithm-driven stablecoins that represent cutting-edge exploration, such as Ethena's USDe, whose trust is based on complex economic models and are also accompanied by new risks that have not been tested for a long time.

Regulatory rating agency S&P has rated USDC as "strong" and USDT as "restricted", which also confirms the realistic basis of this layered framework.

3. Technical architecture and ecological adaptation (where to use & how to use)

The third classification axis focuses on technical architecture and ecosystem, which determines where and how stablecoins are used.

To put it bluntly, different on-chain deployment methods determine their availability, security and fee structure, among which the difference between native and cross-chain deployment is crucial - native stablecoins are directly issued by the official (such as USDC on Base), which is safer; cross-chain versions rely on cross-chain bridge mechanisms and have the risk of smart contract attacks;

Secondly, a stablecoin-dominated ecosystem determines its core application scenarios. For example, the Ethereum mainnet is more suitable for settlement due to its high security. High-performance L1s such as Solana have attracted a large number of payment and transfer activities with their low fees and high speeds, while Ethereum L2s such as Arbitrum and Base are rapidly becoming the main venue for DeFi activities due to their low gas fees and compatibility with Ethereum.

This means that users can choose the most suitable version between different networks based on on-chain costs and usage requirements.

As of the time of posting, imToken Web has created a token collection function based on the above thinking, dividing stablecoins into multiple explorable sub-collections:

• Mainstream stablecoin Bluechip Stables: USDT, USDC and other top assets;
• DeFi protocol stablecoin DeFi Stables: DAI, crvUSD, USDDe and other stablecoins with a wide range of DeFi scenarios;
• Global payment stablecoin Remit Stables: Tron-USDT, TUSD
• Legal Stables: PYUSD, FDUSD and other regulated assets;
• Yield Stables: USDe, USDS, USDB and other stablecoins with their own income mechanism;
• Non-USD Stables: EURC, XAU₮, PAXG and other currency diversification exploration;

This token collection classifies stablecoins according to user intentions (such as beginners, DeFi income, global payments). Users can quickly match the most suitable stablecoin combination according to their own level of knowledge, financial goals, and availability in their region.

Summary

The essence of stablecoins is a tool to serve people.

From traditional classification to multi-dimensional worldview, what has changed is not only the classification method, but also the actual needs of users. Therefore, there is no all-round stablecoin, only stablecoins adapted to the scenario:

For example, the complete description of USDC will be that it has both "capital preservation" and "collateral" attributes in terms of user intention; it belongs to the first echelon in terms of risk status, "bank-level and regulated"; in terms of technical architecture, it provides native versions on many mainstream L1 and L2.

This is much richer and more practical than a simple "fiat-collateralized" stablecoin, which can truly help users understand the trade-offs of different stablecoins in terms of security, profit potential, composability and transaction efficiency,so as to make the most sensible choice according to their own needs.

In a nutshell, we believe that the ultimate value of stablecoins comes from the ability to "serve people". It should not be just a derivative of the crypto narrative, but should be the most practical one in the user's asset management toolbox.

In the Web3 world, the best choice is always the one that "suits you".