Original Title: Stable Investment Analysis (in 6 Red Flags)
Original Author: @green_but_red
Translated by: Peggy, BlockBeats
Editor's Note: Recently, Stable completed two rounds of substantial pre-deposit activities in a short period, with the first phase amounting to $825 million being quickly snapped up, and the second phase seeing qualified subscription amounts exceeding $1.1 billion, attracting significant industry attention.
However, behind the impressive data, there are some uncomfortable issues to clarify: the project is driven by key figures from Tether, with USDT as the native asset forming a strong natural binding; the pre-deposit amounts are highly concentrated among early institutions and insiders; and the time gap between the implementation of the "GENIUS Act" and the accelerated advancement of the project is too tight.
This article attempts to present a more complete picture beyond the hype: what infrastructure problems is it actually solving? Who benefits in the early stages? Where are the risks? And why is this issuance worth careful dissection beyond its surface?
Below is the original text translation.
TL;DR: Basic Situation
The Stable project swept the field in its first phase with a TVL of $825 million, completing fundraising in just 20 minutes, and recently launched a public testnet. However, behind this frenzy lie some uncomfortable questions: the risks brought by the high concentration of stablecoins, insiders pre-positioning, and whether this project is truly solving payment issues or merely creating a new batch of "greater fools." Here is a relatively honest interpretation:
What is the project?
A Layer 1 with USDT as the native asset, supported by insiders from Tether— but who are the real beneficiaries?
Key Data:
Raised $28 million in seed funding, with a pre-deposit scale of $825 million (snapped up in 20 minutes—was that too fast?); the public testnet is live, but the mainnet is still weeks away from official launch, and early insiders are already preparing to exit.
Core Narrative:
Stablecoins need new payment tracks, but the current design of Stable favors those who got in early, while retail investors are clearly at a "disadvantage."
Value Proposition: 7/10
What problem is it actually solving:
Using USDT as gas does indeed eliminate the hassle of back-and-forth with dual tokens, which is reasonable. But a straightforward question arises: do users really care about this, or are they mainly chasing high yields from pre-deposit mining?
Honest Assessment:
It does address a real issue (gas fees for stablecoin transfers), but on Solana/Polygon, a single transfer of $100,000 can already have fees of less than $1. Tether's USDT0 cross-chain mechanism can achieve similar effects without needing to create a new L1. The so-called "pain point" may not be as significant as marketing suggests.
The truly valuable part:
It seems more like a payment infrastructure for institutions rather than a payment innovation aimed at the retail end.
But the current structure is: retail investors speculate, while institutions take the value at the protocol layer.
Six Major Red Flags
Red Flag 1: Solving Problems That Aren't That Painful
USDT transfers are already quite cheap, with fees generally below $1 on @Solana. So why launch an entirely new L1 just to reduce fees by another 10-20%?
Competitive Landscape: 6/10
Real Competitive Environment:
@Plasma ($XPL): Similar narrative, smaller funding scale, but with a different token economic design.
@Solana + $USDT: USDT's daily trading volume has already reached $5 billion, and friction is inherently low.
@LayerZero_Core / $USDT0: USDT can flow through existing cross-chain infrastructure without needing to create a new chain.
Why Stable is Not Unshakeable:
First-mover advantage does exist, but it can be replicated within 6 months.
If alternatives are equally usable, network effects are hard to sustain.
Validator concentration (only about thirty main validators) means significant centralization risk.
Red Flag 2: Timing Seems Too "Coincidental"
The "GENIUS Act" passes (June 2025)
→ @Tether_to suddenly accelerates the new L1 in August 2025.
→ In October 2025, pre-deposits are oversubscribed by 39 times.
This series of timelines looks like a pre-designed coordinated action.
Growth and Hype: 7/10
$825 million pre-deposit: Let's Calmly Look at Reality
Snapped up in 20 minutes (more like FOMO than naturally growing demand), it's highly likely that 95% of the funds came from whales and insiders who had advance knowledge, leaving almost no FOMO phase for retail investors. Funds are locked until the mainnet goes live, with no early exit.
What These Phenomena Actually Indicate:
Institutional interest is real, but the distribution of funds and chips is highly concentrated. Early insiders are likely to choose to sell at the mainnet launch, while retail investors will probably enter at the peak of excitement.
Public Testnet Activity (Mediocre):
600+ Discord subscribers (not impressive for a project focused on a new L1), developer activity remains to be seen (the testnet has only been live for two weeks). Real applications will only be rolled out after the mainnet launch, and there is currently no reference for actual on-chain trading volume data.
Red Flag 3: Design of Pre-Deposit Structure
Funds are locked in the vault before the mainnet goes live and can only be unlocked when they are available for withdrawal.
This is a typical "Unlock—Dump" structure:
Early depositors naturally become the most motivated sellers at the moment they can withdraw.
Narrative and Story: 7/10
Why the Story is Appealing:
The clear regulatory framework (the "GENIUS Act") creates a sense of urgency that "if you don't get in now, you'll miss the opportunity."
With backing from @Tether_to, it appears to have formal institutional endorsement.
There is indeed an objective gap in payment infrastructure.
From a chronological perspective, everything seems to fall into place.
The Flaw in This Narrative:
"USDT as gas" is not a disruptive innovation; it's merely a gradual improvement. The proliferation of stablecoins does not depend on creating a new L1; the real beneficiaries are insiders of the protocol, not ordinary users.
The story told to retail investors remains the same: "Holding stablecoins can earn additional yields," which has already been validated as a classic trap in the previous cycle.
Red Flag 4: Regulatory Story Seems a Bit "Over the Top"
The "GENIUS Act" just passed, and immediately a "perfectly timed, unbeatable narrative" USDT L1 appears? Overall, it feels more like a transaction that was already structurally designed, just waiting for regulatory approval to don a layer of compliance.
Supporter Situation: 5/10
Real Beneficiaries:
@paoloardoino (Tether CEO): If Stable becomes a mainstream payment track, he is the most direct beneficiary.
@bitfinex: As a liquidity provider, they can continuously earn from trading fees.
Franklin Templeton: Strategic investors laying out in emerging infrastructure.
Early seed round investors: Positioned before the mainnet launch, waiting to sell at the peak of sentiment.
Potentially Hurt Individuals:
Retail investors buying into the pre-deposit vault, participants entering the mainnet late, ordinary users thinking this is a "free payment" solution (they will pay the price elsewhere).
Red Flag 5: Conflicts of Interest
The CEO of Tether is backing a set of infrastructure with $USDT as the native token— the more USDT is used, the more he earns.
Such a clear conflict of interest has not been publicly emphasized as a "major conflict."
Red Flag 6: Insiders Pre-Positioning
The $28 million seed round likely secured a massive allocation. The pre-deposit itself is filled with insider funds.
At the moment the public mainnet goes live → insiders are almost guaranteed to be able to dump their chips to retail FOMO.
Market Timing: 6/10
Why Launch Right Now?
The "GENIUS Act" provides a compliant umbrella, and market sentiment towards stablecoins is generally positive. But all of this seems "too coincidental" in terms of timing.
Potential Problem Areas:
Regulatory winds could shift (there are opposing voices regarding the "GENIUS Act"); competing stablecoin L1s may launch faster and steal the narrative; after the mainnet launch, actual trading volume may fall short of expectations; insider dumping could lead to a collapse in token prices.
To put it more frankly:
The rhythm of this issuance is: "We wait for regulatory certainty, then rush into the market." This could either be textbook-level execution or a highly coordinated "carefully orchestrated" effort.
Summary
Final Score: 38/60 (63%)
Bullish Logic (Still Valid):
Global payment infrastructure is indeed very important; a network with USDT as the native asset is likely to become some sort of industry standard in the future; pre-positioning in infrastructure can indeed capture long-term value; based on currently disclosed information, the technical execution of the mainnet seems reliable.
Bearish Logic (Equally Real):
Insiders have already heavily pre-positioned before retail entry; the problem being solved has already been "mostly addressed" by existing solutions; the token structure is extremely favorable to early depositors but unfavorable to those buying in on the mainnet; if the "GENIUS Act" faces challenges, the project faces regulatory uncertainty.
Uncomfortable Truth:
This may indeed be a "not bad" project at the infrastructure level, but its distribution and issuance mechanisms are clearly skewed towards insiders: early depositors are most motivated to sell at the peak of FOMO on the mainnet, while retail investors typically buy in at the peak of excitement.
This is a classic structure.
Conclusion:
Stable has solid technical highlights and indeed targets real existing problems.
However, the timing it chose, the pre-deposit mechanism, and the way insiders positioned themselves all highly conform to the standard paradigm of—
"Looks like an infrastructure upgrade, but essentially is an early insider-friendly issuance."
This does not mean the project is necessarily bad,
It just means: the risks are extremely asymmetric.
Be sure to think clearly: which side of the timeline you are on.
This is not investment advice, but you can pay attention to one detail:
Institutional pre-deposits were snapped up in 20 minutes,
While retail investors are still asking, "What is Stable?"
The time gap between insiders and retail entry,
Is often where most losses occur.
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