Why Hack VC Invested in Stable: The Future of Stablecoins

By Rodney Yesep (Partner) and Alex Pack (Founder & Managing Partner)

At Hack VC, we invest in crypto projects building at the technical cutting-edge, in the markets that matter the most, and that are most likely to change the world. Stable, a blockchain designed specifically for stablecoins, fits all three, which is why we’re excited to announce that we are leading their seed round of financing.

First - We believe stablecoins are the most disruptive innovation to come out of crypto and probably all of digital finance. Stablecoins are the new money — the ultimate fulfillment of Satoshi’s vision in the Bitcoin whitepaper. They will penetrate every market, every commercial transaction. Stablecoins will truly change history: nations will rise and fall, and the global order will be remade based on how stablecoins develop.

Second - Stablecoins are technological achievements, but they need major infrastructural upgrades to take over the globe. The existing chains where they proliferate are not scalable enough, but there are also many other missing pieces of infrastructure needed to make stablecoins work for everyone, everywhere. Stable addresses these missing gaps in a comprehensive, novel way, which we detail below.

Third - Distribution and partners matter when bringing new technology to the world. That’s why Stable’s close partnership with Bitfinex, Tether, and USDT0 is so important. Tether’s USDT is the king of all stablecoins, with not just the most revenue, circulating supply, and market share (~60%), but also by far the deepest penetration into real-world global payments use cases.

As we’ve gotten to know the Stable project over time, we’ve been amazed at how supportive Tether and its broader ecosystem has been, working arm-in-arm with Stable to develop new tech together, onboard new users and payment businesses together, and ensure that USDT will sit on truly decentralized foundations.

The Opportunity: The Biggest Market in Digital Finance

Stablecoins are among the most adopted products in crypto. The stablecoin market is now valued at over $250 billion and continues to grow rapidly. Today, stablecoins play a crucial role in everything from cross-border payments to decentralized finance (DeFi) applications. Tether’s stablecoin, USDT, is king. It dominates the stablecoin market and is the most important player by far. In 2024 alone, USDT processed over $10 trillion in volume and generated more than $13 billion in net income, which would make it one of the most profitable financial service companies in the world (bigger than most banks).

It’s also one of the fastest-growing markets in the world. When we first started investing in stablecoins in 2017, the whole market was well below $1 billion in market cap. Few products in the world have grown more than 300x in that time.

However, as adoption accelerates, it’s becoming clear that the infrastructure supporting stablecoins is inadequate for the scale needed to support trillions in on-chain value and volume.

The Problem: Existing Blockchains Can’t Keep Up

While stablecoins have already seen significant adoption, the existing blockchain networks powering them (primarily TRON, Ethereum, and Bitcoin) weren’t designed with the demands of stablecoin transactions in mind. These networks face scalability issues, high transaction fees, and performance bottlenecks. 

As the world moves toward embracing stablecoins for everything from daily payments to institutional trading, we need new blockchain solutions that can scale, offer low-cost transactions, and provide the high-level security required by these globally important assets.

For stablecoins to truly become a mainstream form of digital money, the infrastructure behind them must support massive scalability and ensure fast, cheap transactions. Legacy blockchains (though critical to the crypto ecosystem) were not built with the demands of stablecoin transactions in mind.

• Bitcoin, first described by Satoshi in the whitepaper as a “peer-to-peer electronic cash system”, has now become a decentralized store of value. We think that Satoshi’s original vision of using blockchains to disrupt global payments will be realized by stablecoins instead, on new blockchains.
• Ethereum, where most stablecoin TVL lives, faces high gas fees and slow processing times. While Ethereum may be a secure place to store your stables, it’s not good if you want to actually transact, especially if you think that stablecoin demand will eventually scale to millions of daily transactions.
• TRON processes >60% of USDT volume, but it is increasingly bottlenecked by $3+ average transaction fees, opaque governance and centralized validators, and limited composability with modern DeFi. 
• Various L2s - on Bitcoin or Ethereum - have emerged, but we think that generally L2 architectures today are not secure or extensible enough for hosting crypto’s most important use case. 

Stable fills this vacuum by offering:

• A cheap, fast, and scalable chain purpose-built for stablecoin flows
• Native USDT support via partnerships with Tether and Bitfinex
• An architecture optimized for real-world payments, not just DeFi

Stable: Novel Tech, Purpose-Built for Stablecoins

But it turns out that there are many pieces of infrastructure needed to make stablecoins work globally at scale, beyond just performance. Stable is engineered from the ground up for the specific needs of stablecoin transactions, and the fact that it is being built in such close partnership with Tether and its USDT ecosystem means that it is able to address all these disparate issues in a holistic, integrated platform. 

Stable’s infrastructure is optimized for high-volume, low-latency transactions, which are key features for handling stablecoin payments at scale. This enables instant settlement and low-cost operations, solving the user experience, scalability, and cost efficiency problems that have plagued legacy blockchains like Ethereum and Bitcoin.

Stable is engineered for performance. Built on the Cosmos SDK with CometBFT and Ethermint, the chain supports:

• Optimistic parallel execution to process up to 10,000 TPS
• Sub-second block finality
• Memory-optimized state storage via a custom memIAVL implementation
• Future roadmap for DAG-based consensus to remove single-leader bottlenecks

Stable is a EVM-compatible Layer 1 blockchain, which means it is easy for existing DeFi users and dapps to port over.

Stable has made USDT its native gas token. This removes friction for users, merchants, and developers by eliminating the need to swap for separate gas tokens. Every transaction on the network can be paid in USDT or its omnichain representation, USDT0.

Stable supports gasless transfers using LayerZero’s OFT standard. Users holding USDT0 can transact on Stable without needing any additional wallet balance for gas. Combined with fiat onramps and debit cards, this enables an end-to-end user experience that feels like a Web2 payment app that runs on crypto rails.

Lastly, Stable is also launching a custom wallet and developer portal alongside the USDT0 team, with native support for bridging, staking, and on-chain payments, This makes it easier for real-world users and partners to onboard. Expect to see many more technical product partnerships built in collaboration with Bitfinex, Tether, USDT0, and the broader Tether ecosystem.

Conclusion: Trillions

The future of stablecoins is inextricably tied to the infrastructure that powers them. For stablecoins to become a mainstream form of digital money, we need networks that can support trillions in on-chain value while providing fast, secure, and affordable transactions. Stable is uniquely positioned to lead the way, and we’re thrilled to support their journey.

With its purpose-built blockchain, close support from Tether and Bitfinex, and focus on global scalability, Stable is poised to become the go-to platform for stablecoin adoption at scale. We’re excited to be part of their mission to build the future of stablecoin infrastructure.

Disclaimer

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