$800 Million Raised in Three Weeks, Yet 80% of Funds Are 'Lying Flat': How Much Real Demand Is There in the 'Giant Game' of OUSD?

Author: Jae, PANews

In just three weeks since its launch, Open Standard, led by Stripe, has delivered what appears to be an impressive report card, with its stablecoin OUSD reaching a circulation of $825 million. With the support of founding partners' funding, OUSD has rapidly scaled up, but whether this capital has translated into sustained payment and transaction demand remains to be seen through on-chain data.

As of now, there are only about 2,200 independent addresses holding OUSD, with the top ten wallets holding approximately 82% of the circulation. During the same period, the total on-chain transfer volume reached $3.7 billion, with an average transaction size of about $14,000. The high concentration of funds and holding addresses, along with the large transaction amounts, indicate that early growth is more reflective of institutional capital allocation and transfer, while the adoption rate among ordinary users still needs to be verified.

Beyond scale, OUSD also needs to address another question: how to cover operational costs such as compliance, clearing, and liquidity under a model that distributes reserve earnings to partners after deducting a small management fee?

Top Ten Addresses Control 82%: Large Holders Feed In, 80% of Funds Lie Flat Earning Interest

On September 30, the operator Open Standard announced the launch of OUSD, with issuance handled by Bridge, a subsidiary of Stripe. On the same day, Stripe, Coinbase, Visa, and three other founding partners committed to minting a total of about $1 billion in OUSD.

As of October 20, OUSD's circulating market value reached $825 million, with a net minting amount of $898 million and a redemption scale of only $73 million, indicating a nearly one-sided net inflow.

However, the distribution structure of the funds has exposed its early characteristics.

In terms of public chain distribution, the Tempo chain, dominated by Stripe, accounts for 64.1% of the circulating market value, standing alone; Ethereum accounts for 15.1%, while Solana and Base combined account for only 20%, corresponding to a market value of about $170 million. In the two ecosystems known for high-frequency trading and active DeFi, Solana and Base, the size of OUSD is surprisingly small, which may indicate that its growth momentum does not stem from native demand on-chain, but rather from targeted liquidity injections by the initiators.

The holder structure further confirms this point. As of now, there are only 2,200 independent addresses holding OUSD, with the top ten wallets collectively holding about 82% of the circulation, and the top address holding nearly 38% of the share. Based on this calculation, the average capital per address is about $375,000, which is a typical pattern dominated by large holders.

In the past three weeks, the total on-chain transfer volume of OUSD reached $3.7 billion, with a cumulative transfer of 271,200 transactions, and an average transaction size of about $14,000. High capital throughput, low address count, and high single transaction amounts combine to point to one conclusion: early funds are primarily allocated and configured through infrastructure, with low participation from retail users.

Real usage demand can also be glimpsed from liquidity data.

Currently, OUSD's DEX trading volume is about $7.7 million, corresponding to about $57 million in DeFi TVL, with a capital utilization rate of only 13.51%. This means that over 80% of OUSD is simply lying quietly in wallets, without entering actual circulation activities.

The on-chain liquidity distribution is also highly concentrated: Morpho alone accounts for 71.14% of the share, with TVL growing rapidly from zero to over $35 million in three weeks; Orca and Uniswap account for 18.65% and 10.21%, respectively. Funds are primarily flowing into lending protocols to earn interest, which is a typical capital allocation behavior.

OUSD Wins in Initial Scale, Adoption Speed Needs Verification

The scale growth of stablecoins heavily relies on breaking through cold starts. In the first three weeks, OUSD's supply was about 33 times that of USDG at launch, 6.5 times that of PYUSD, and 2.5 times that of U, with an initial size far exceeding that of competitors during the same period.

From the perspective of cold start growth paradigms, the commercial resources relied upon by different stablecoins will determine the differences in their expansion routes.

USDG: Embedded in Exchanges

USDG, another alliance-based stablecoin, takes a more direct approach: by binding with exchanges like OKX, Robinhood, and Kraken, it embeds the stablecoin into their underlying architecture, eliminating the need for additional user education.

This is a typical "exchange synergy strategy." On-chain data shows that approximately $2 billion of USDG is aggregated on the X Layer and Robinhood Chain, accounting for over 65% of the total network share. The exchange entry is one of the most powerful growth engines for stablecoins.

PYUSD: Expanding Application Scenarios

PYUSD, issued by another payment giant PayPal, follows a different path. Backed by a massive user base, its initial performance was not impressive, with market value once stagnating below $200 million.

It wasn't until May 2024 that it expanded to Solana and re-entered payment scenarios like YouTube creator revenue sharing and Visa cross-border remittances that its scale began to rise rapidly. This indicates that the user base of a payment brand does not automatically translate into stablecoin scale; it must rely on on-chain ecosystems and application scenarios to land layer by layer.

U: Driven by Trading Ecosystem

U, backed by the Binance ecosystem, continues the crypto-native route: directly entering the liquidity hinterland of CEX and DeFi. On its first day, it integrated multiple DeFi protocols like Aster and PancakeSwap, and subsequently, Binance launched mainstream trading pairs and introduced zero-fee activities, relying on trading demand and liquidity mining to gain traction.

Its characteristic is a relatively high on-chain activity level, achieving an average daily trading volume of hundreds of millions of dollars in a short time, with market value soaring to $1.6 billion. The trade-off is that growth heavily relies on trading incentives, with relatively weak retention and stability.

OUSD: Alliance Resource Tilt

OUSD represents a fourth model: initiated by an alliance of payment giants, card organizations, and exchanges, rapidly scaling up through targeted capital injections from founding partners. Its advantages are a high starting point, abundant resources, and high institutional trust; however, it also has clear shortcomings: a lack of DeFi incentive schemes aimed at C-end users and a lack of support from major CEX spot trading pairs, with the liquidity flywheel yet to form.

In other words, OUSD has solved the cold start problem of "from 0 to 800 million," but the growth from "800 million to 8 billion" still relies on real payment, transaction, and lending scenarios to support it.

Stablecoin Business Model: Circle's Net Profit Only 7%, How Does OUSD 'Lie Earn'?

More noteworthy than growth is the business model of stablecoins. Many believe that stablecoins are a good business for earning interest margins, but Circle's latest financial report lays bare the accounts of the stablecoin sector.

In the first half of this year, Circle recorded about $1.4 billion in revenue, but profits were not as substantial as expected. Breaking down the costs and profits for every $1 stablecoin issued:

• 59 cents to channels: $819 million was used for paying distribution partners' shares and transaction costs. For every dollar earned, about 59 cents goes to the channels that help acquire customers;
• 34 cents invested in infrastructure: $473 million was reinvested into compliance qualifications, infrastructure, liquidity support, and network development. Stablecoins are a "heavy asset" business, with anti-money laundering, reserve audits, cross-chain verification, and interbank settlement channels, each of which is a rigid cash consumption;
• 7 cents net profit: The final net profit is about $103 million, with a pure profit of only 7 cents for every dollar of revenue.

An even more hidden cost is the redemption liquidity. To ensure around-the-clock, near-real-time fiat currency two-way conversion and prevent runs during extreme market conditions, Circle must maintain a large amount of low-interest buffer capital in mainstream clearing banks and bear high inter-institutional capital transfer costs. This part of the cost is not listed separately but is also eroding profits.

In fact, OUSD will face a similar cost structure. Its underlying issuer is Bridge, with custodians including BlackRock and Bank of New York Mellon, facing regulatory requirements and capital clearing standards that are no less than Circle's. Anti-money laundering monitoring, reserve audits, interbank settlements, and cross-chain operations all require funding.

A rough calculation: based on an $800 million supply and a 5% annual reserve yield, OUSD's annual gross income from reserves is about $40 million. If the operator retains only 7% profit, the funds available for covering costs throughout the year would only be $2.8 million, which clearly cannot support a complete compliance and operational system.

Not to mention the risk of declining interest rates: for every 1 percentage point drop in reserve yield, the annual gross income at the same scale would decrease by $8 million. For stablecoins that rely on interest margins for survival, whether scale growth can offset interest rate declines will directly determine whether their business model can hold.

In addition to cost pressures, alliance-based stablecoins also have an inherent weakness: the loyalty of distribution partners.

In the list of founding partners of OUSD, the top distribution partners generally have a "multi-host" identity:

• Coinbase is not only one of the initiators of OUSD but also a major shareholder and the largest beneficiary of USDC;
• Visa is involved in the governance board of OUSD while also extensively using USDC for its Visa Direct business in underlying settlements.

For them, OUSD is just one more option, not the only choice. Whichever stablecoin offers higher profit sharing, better experience, and stronger liquidity will attract channel resources. This "mercenary-style" cooperation can scale up together in favorable conditions, but once faced with cost reductions and conflicts of interest, channels may quickly shift.

This is also the main contradiction in the second half of the stablecoin competition: early competition was about whose reserves were more real and transparent; as the industry matures, the competition will focus on the ability to control compliance and liquidity costs, as well as bargaining power over distribution channels.

Regardless, $825 million is undoubtedly a good start for a stablecoin that has been online for only three weeks.

However, scale is just a ticket to entry, not a moat. The challenge OUSD faces next is whether it can establish competitive use cases and channel ecosystems based on the resources of giants.

Leading at the start is only a short-term advantage; successfully running a profitable model is the only way to survive in the fiercely competitive stablecoin arena.

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