Reconstructing the Stablecoin Worldview: A Multi-Dimensional Classification Framework to Assist Users in Selection

As stablecoins gradually penetrate various scenarios such as global payments, DeFi, and safe-haven storage, it is no longer a concept that can be defined by a single narrative. Different users have vastly different understandings and uses of stablecoins - it can be a primary tool for cross-border transfers, or it can be a core component of on-chain yields.

This means that the use cases of stablecoins vary from person to person and arise from different needs. Driven by diverse demands, a multidimensional classification framework based on user intent, risk trust, and technical architecture has essentially become the key starting point for understanding the stablecoin ecosystem.

This article attempts to reconstruct a worldview of stablecoins from the user's perspective, focusing on three dimensions: user goals, risk models, and technical architecture, in order to build a cognitive framework for stablecoins that truly meets user needs and adapts to usage scenarios.

1. A Panorama of Stablecoins in the Traditional Sense

The narrative in the crypto world is noisy, but stablecoins have always been an eternal theme.

In traditional narratives, the market has long been accustomed to centering on the "anchoring mechanism," mainly categorizing stablecoins into three types:

• Fiat-backed: such as USDT, USDC, etc., pegged to the US dollar at a 1:1 ratio, with strong liquidity and high acceptance;
• Crypto-collateralized: such as DAI, RAI, which maintain their peg through over-collateralization of assets like ETH, emphasizing decentralization and censorship resistance;
• Algorithmic stablecoins: such as the already collapsed UST, rely 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 euros, for example, the recently popular Tether Gold(XAU₮), which represents one ounce of gold for each token, supports on-chain transfers and physical redemptions, and is currently stored by a company in a self-built vault in Switzerland, with a holding scale reaching 8 billion USD, making it one of the largest private holders of gold in the world.

In the past few years, this classification framework has provided us with a preliminary understanding of stablecoins, but in terms of usage, this way of categorizing based on anchoring mechanisms has become increasingly difficult to meet the diverse understanding and selection needs of users.

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

For example, USDT and USDC are both fiat-collateralized stablecoins, but their reserve structures, compliance levels, and market trust differ greatly. At the same time, new regulations ( such as the GENIUS Act and MiCA ) are also categorizing based on use and compliance, further making traditional classifications difficult to match the actual policy framework.

2. The Classification Dilemma of Stablecoins under New Variables

Recently, the CEO of a well-known stablecoin issuer explained that during the economic downturn since 2020, some developing countries have been greatly impacted, with skyrocketing prices, currency depreciation, and high unemployment rates, leading many families to face financial difficulties. Stablecoins like USDT can meet the needs of these families to some extent, being used for value storage, cross-border remittances, and daily payments.

For this reason, in regions such as Latin America, the Middle East, and South Asia, many users have become global users who are first-time participants in the crypto world. They use stablecoins due to the depreciation of their local currency and difficulties with cross-border transfers, and thus only care about its stability, fees, and whether they can cash out at any time.

In contrast, native Crypto players - experienced on-chain users, arbitrageurs, and institutional-level traders, have a completely different focus on stablecoins. They are more concerned with native liquidity, protocol support, portfolio efficiency, and arbitrage paths, rather than just the anchoring mechanism.

This also means that the differentiation of user groups is becoming increasingly obvious. The stablecoin sector must break out of the traditional framework of "fiat collateral/crypto collateral/algo pegging" and reconstruct the classification logic from the user's perspective. From this angle, the "change" of stablecoins is essentially the result of the joint push from user demand and the market ecosystem.

This includes the explosion of stablecoin application scenarios ( from DeFi staking to cross-border salary payments ), as well as the differentiation of user groups and usage demands ( from capital preservation to high returns ), and the improvement of regulatory frameworks in a macro sense ( from the EU MiCA to the US GENIUS Act ). Therefore, in the eyes of users, the stablecoin world has already split into several parts:

• Crypto newcomers need a "simple and secure" stablecoin that allows them to safely store funds and learn gradually.
• DeFi enthusiasts focus on "yield potential", using stablecoins to lend on Aave and provide liquidity mining on Curve;
• Experienced traders pursue "extreme liquidity", needing stablecoins that can be quickly exchanged on mainstream exchanges;
• Global users pay more attention to "low-cost cross-border payments"; on-chain fees and transaction speed are the core indicators.

The traditional classification system is destined to gradually become ineffective against the backdrop of today's increasingly diverse demands.

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

3. How to Build a Multidimensional Stablecoin Worldview?

It is against this background that, in order to allow every user to find the stablecoin that best suits them, the industry has proposed a stablecoin classification framework consisting of three core axes:

From the user's perspective of (, why use ), how safe is risk trust (, and where and how to use the technical architecture ), aiming to provide a clear picture of each stablecoin, helping users make informed judgments in complex scenarios.

( 1. User Intent and Financial Goals ) Why use ###

This is a classification axis based on user motivation, clarifying the use cases of stablecoins and directly answering the question "why use it."

As we all know, the functions of stablecoins have diversified, with different options corresponding to different scenarios:

• Payments and value transfer: such as USDT(Tron), low fees, wide coverage, convenient for cross-border remittances;
• Capital preservation and risk hedging: such as USDC, suitable for use as an on-chain dollar account or bear market hedging;
• Yield generation and wealth appreciation: Like USDe, it generates native yield through a pegging mechanism and derivative hedging model;
• Uses of Collateral and Leverage: Assets such as DAI, USDC, USDT are the most commonly used collateral in DeFi protocols, facilitating lending and trading;

This classification can directly address the most common question from users: I want to do X, which stablecoin should I choose?

( 2. Risk Status and Trust Model ) How safe is it ###

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

The highest tier consists of bank-grade and regulated stablecoins, whose credibility is rooted in government oversight and the traditional financial system, with typical representatives being USDC and PYUSD. Next are market-dominant and systemic stablecoins, such as USDT, whose trust primarily comes from enormous network effects and unmatched liquidity, although there are controversies regarding their regulatory status and reserve transparency.

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

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

( 3. Technical Architecture and Ecological Adaptation ) Where to use & how to use ###

The third classification axis focuses on the technical architecture and ecosystem, which determines "where and how" the stablecoin is used.

In simple terms, the deployment method on different chains determines its availability, security, and cost structure, with the distinction between native and cross-chain deployment being crucial - native stablecoins are directly issued by the authorities, such as USDC on Base, which is safer; cross-chain versions rely on cross-chain bridge mechanisms, which carry 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, while high-performance Layer 1s like Solana attract a large number of payment and transfer activities due to their low fees and high speed. Meanwhile, Ethereum Layer 2s like Arbitrum and Base are rapidly becoming the main venues for DeFi activities because of their low Gas fees and compatibility with Ethereum.

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

As of the time of writing, a well-known wallet has created a token collection feature based on the above considerations, dividing stablecoins into several exploratory sub-collections:

• Mainstream stablecoins Bluechip Stables: USDT, USDC and other top assets;
• DeFi protocol stablecoins DeFi Stables: DAI, crvUSD, USDe, and other stablecoins with broad DeFi scenarios;
• Global payment stablecoin Remit Stables: stablecoins aimed at settlement such as Tron-USDT, TUSD, etc.
• Compliant stablecoins Legal Stables: PYUSD, FDUSD and other regulated assets;
• Yield Stables: USDe, USDS, USDB and other stablecoins with built-in yield mechanisms.
• Non-USD Stablecoins: Exploring currency diversification such as EURC, XAU₮, PAXG, etc.

This token collection categorizes stablecoins based on user intent (, such as beginner's guide, DeFi yield, global payments ). Users can quickly match the most suitable stablecoin combinations according to their cognitive level, financial goals, and availability in their region.

Summary

The essence of stablecoin is a tool that serves people.

From traditional classification to a multidimensional worldview, what has changed is not only the classification method but also the service to the actual needs of users. Therefore, there is no universal stablecoin, only stablecoins that fit the scenario:

For example, a complete description of USDC would incorporate both "capital preservation" and "collateral" attributes in terms of user intent; it belongs to the first tier in terms of risk status, being "bank-grade and regulated"; in terms of technical architecture, it offers native versions across many mainstream L1 and L2.

This is much richer and more practical than a simple "fiat collateralized" stablecoin, as it can truly help users understand the trade-offs between different stablecoins in terms of security, yield potential, composability, and trading efficiency, thereby making the most informed choices based on their own needs.

In short, we believe that the ultimate value of stablecoins comes from their ability to "serve people"; they should not just be a derivative of the crypto narrative but should become the most practical tool in users' asset management toolbox.

In the Web3 world, the best choice is always the one that is "suitable for oneself."