There are two sides to the market for stablecoins: the accept-side, and the spend-side. Tether found an easy way to get the accept-side going in the isolated environment of an exchange; the accept-side then became the spend-side. In other words, in the case of Tether, both sides of its networks effect market are one and the same. This is a consequence of the strongest use-case for Tether: as a parking mechanism for speculators to capture their profits.

I still have to see any of the stablecoins listed in this survey come up with a strategy for bootstrapping their currency for common, everyday use. It is not going to be easy to introduce a completely new currency in the open market, outside of exchanges. In order for a currency to become a medium of exchange, first it has to be in people’s possession (spend-side); and second, it has to be accepted by vendors. Do you start with the spend-side, or with the accept-side? You can’t just distribute your stablecoin for free (as in an airdrop) because then it loses its value and nobody would accept it in exchange for anything with value (like lunch). If you sell your stablecoins in an exchange, what would be the advantage of buying it if the intention is to use it as medium of exchange (instead of a way to park your profits)? How do you put your stablecoins in people’s hands without increasing its value (or decreasing its value to zero)?

Outside of an exchange, what use case for your stablecoin can really work? Talking about how your stablecoin can be stable without talking about how to bootstrap it in the market is like putting the cart before the horse.