Tether's self-built Stable Chain: Is it a solution to high Gas fees, or is it a new ecological moat?

Author: Ryan Yoon, Tiger Research

Compiled by: BlockBeats

Original Title: Stable: The New USDT Trojan Horse for the Stablecoin Era

TL;DR

·Stable positions itself as the "Trojan Horse" in the stablecoin market, driving mass adoption by focusing on the infrastructure of USDT.

It offers gas-free USDT transfers, sub-second settlement, and a simplified user interface to address key barriers such as high fees, slow transactions, and complexity of use.

The expected route is: first attract users with free and seamless transfers, and then gradually expand to payments, DeFi services, and institutional partnerships.

1. Stablecoins: Entering the Market in the Form of a Trojan Horse

Stablecoins have quietly entered the cryptocurrency market, like a Trojan horse.

Since then, they have gradually grown into a dominant force in the ecosystem. Initially, they were mainly seen as a tool for hedging volatility. Over time, they have evolved into a core component of market infrastructure.

The stablecoin market led by USDT has a circulation of over 150 billion USD, with more than 350 million users, and trading volume even surpassing Visa. This makes stablecoins not just crypto assets, but also a truly operational global payment network.

Their growth reflects the bridging role between traditional finance and digital finance. In centralized exchanges, stablecoins serve as the main medium of exchange between fiat currency and cryptocurrencies. In decentralized finance (DeFi), they are the benchmark assets for providing liquidity and lending. In the field of cross-border remittances, they offer a faster and more cost-effective alternative than traditional banks.

The shift in market behavior is also quite significant. Early crypto trading relied on direct exchanges between tokens, such as BTC/ETH or BNB/ETH, where value was typically measured in Bitcoin. Nowadays, trading pairs like BTC/USDT and ETH/USDT dominate the market. DeFi yields are usually denominated in USDT. In some regions of Southeast Asia and Latin America, USDT is even increasingly being used for direct payments, replacing physical US dollars.

Markets that once relied on the valuation of volatile tokens have now seen stablecoins become the universal unit of account.

They were originally introduced out of necessity, but have now become the central axis of the cryptocurrency ecosystem.

II. Another Aspect of Growth: The Manifestation of Infrastructure Limitations

The rapid expansion has also exposed structural weaknesses. The current stablecoin infrastructure faces three key constraints.

Source: Tiger Research

· Unpredictable high transaction fees: Stablecoins operate on multiple blockchain networks, but when the network is congested, gas fees can skyrocket, making small transactions unfeasible. In some cases, transferring $10 might require a fee of $20. This directly undermines the core value of stablecoins as everyday payment tools.

· Slow settlement times: On Ethereum, stablecoin transactions may take several minutes or even longer to confirm, depending on the current network conditions. For scenarios such as online checkout or offline retail that require real-time settlement, this delay is nearly unacceptable.

· Complex user experience: For most ordinary users, the calculation of gas fees, the use of wallets, and the management of private keys still pose a significant barrier. In contrast, consumers have long been accustomed to simple and intuitive payment interfaces like PayPal, while the current stablecoin experience appears overly complicated.

The limitations of these infrastructures have become a major obstacle for stablecoins to enter the next stage of development. Ironically, within the cryptocurrency ecosystem, stablecoins have already become the de facto benchmark asset, but for mainstream users, their everyday usability remains very low.

Stablecoins have completed their initial mission as a Trojan horse: bringing stability to turbulent markets and establishing themselves as the core of the ecosystem.

The next challenge lies beyond the crypto world: infiltrating traditional financial markets and mainstream consumer payment systems. To achieve this, it is essential to fundamentally address the existing technical constraints, which requires a new "Trojan Horse" strategy.

3. The New Trojan Horse: Stable

Creating a new Trojan horse does not require inventing another stablecoin. A stablecoin is essentially just a tool pegged to the US dollar. The new Trojan horse is dedicated infrastructure built for existing stablecoins that dominate the market.

Source: Stable

This is precisely the significance of Stable. Unlike general-purpose blockchains, Stable is a chain built specifically for USDT. It not only supports the coexistence of USDT with other tokens but also serves as a dedicated high-speed network specifically designed to handle USDT transactions.

Source: Tiger Research

Stable has three missions:

· Eliminate Gas fees for USDT peer-to-peer transfers: Completely remove Gas costs to solve the inefficiency problem where even transferring 10 dollars on the existing network may incur high fees.

· Achieve sub-second settlement: All transactions are settled within one second, eliminating the common waiting time in online and offline payments.

· Simplified user experience: Shielding the complexities of gas fee calculations and wallet management, allowing users to operate intuitively like using traditional payment tools, without the technical burden.

The key point is that these improvements are interconnected. Eliminating gas fees simplifies the user experience, while faster transaction processing enhances usability in real business environments. These factors together lay the foundation for stablecoins to move out of the crypto world and into the mainstream payment market.

The vision of Stable is not to become yet another ordinary blockchain, but to become the core infrastructure supporting the USDT ecosystem. The market size of USDT has reached 160 billion dollars, and Stable aims to meet this enormous market demand by addressing the structural limitations in the existing stablecoin infrastructure— including unpredictable fees, slow settlement speeds, and complex user interfaces.

Its direction is to break away from the fragmented model where each chain independently supports USDT, and instead build a unified environment optimized for the operation of USDT.

IV. Operating Mechanism of the Architecture

Source: Stable

In order for Stable's core vision to operate in practice, various technical elements must work in coordination. Stable is currently still in the testnet phase, and the team is preparing for the mainnet launch. Its target architecture clearly demonstrates how the system operates.

Gasless USDT0 Transfers: EIP-7702 and Account Abstraction

There are two types of tokens when the Stable network is operational.

USDT0 represents USDT transferred from an external network via cross-chain bridging. gasUSDT is a token specifically used for paying network fees, maintaining a 1:1 peg with USDT0, and can only be used for transaction fee payments. Both can be exchanged for real USDT at a 1:1 ratio.

To achieve peer-to-peer transfers without Gas, Stable adopts EIP-7702 and Account Abstraction. This way, users only need to hold USDT0 to complete all transactions.

Source: Tiger Research

In the existing blockchain system, accounts are mainly divided into two categories:

· Externally Owned Account (EOA): A standard wallet (e.g., MetaMask) controlled by a private key, capable of signing transactions but with limited functionality.

· Contract Account (CA): A smart contract account that can execute complex logic but cannot proactively initiate transactions.

Account abstraction merges these two types of accounts, enabling standard wallets to possess the functionality of smart contracts. As a result, users can directly specify, for example, "pay Gas with USDT" or "request a Gas fee exemption."

The first standard to attempt to solve this problem is ERC-4337, which requires users to create a new smart wallet and transfer funds from the original wallet to the new wallet, a process that is prone to user errors.

· Previous method: Create a new smart wallet → Transfer funds from the original wallet → Use the new address

· EIP-7702 method: retain the original wallet → add smart contract functionality → address remains unchanged

EIP-7702 eliminates the migration step, allowing existing wallet addresses to have smart functionality directly without the need to move funds. Users can continue to use their original MetaMask wallet, simply gaining additional smart capabilities.

In Stable, all wallets natively support EIP-7702, so the smart wallet features can be used without additional setup. This also includes features like gas fee sponsorship, which can be directly enabled in the existing wallets.

Source: Tiger Research

For example:

· Ryan transferred 100 USDT0 to Jay through MetaMask.

· Wallet supports EIP-7702, requesting exemption from Gas fees.

· Paymaster service providers pay for the transaction gas.

· Ryan's balance decreased by exactly 100 USDT0, while Jay also received a full 100 USDT0.

No extra Gas was deducted during the process, and Ryan didn't need to hold or calculate fees; the experience was just like using PayPal for transfers. This means there is no need to hold Gas tokens separately, nor is there a need to manually calculate transaction fees.

Sub-second Transaction Finality

Stable adopts the StableBFT consensus algorithm, producing a block approximately every 0.7 seconds, with transactions achieving finality after a single confirmation. This eliminates the common "pending confirmation" phase found in many blockchains, providing an experience similar to instant approval at payment terminals.

To further accelerate speed, Stable is developing Block-STM parallel processing, which can execute independent transactions simultaneously, accounting for 60% to 80% of network activity. This method is like having multiple checkout counters open at a supermarket, thereby reducing wait times.

In the long-term plan, Stable intends to upgrade to the Autobahn DAG consensus structure. This architecture allows for multiple blocks to be proposed simultaneously and separates data propagation from sorting, reducing bottlenecks. Internal testing shows that its throughput can reach up to 200,000 transactions per second, but it is still in the pre-production stage.

Simplified User Experience

Stable removes the burden of gas fee calculation and separate gas token management while maintaining compatibility with the Ethereum ecosystem. Users can still continue to use familiar tools such as MetaMask and Etherscan without needing to learn anything extra.

On this basis, these tools will run more smoothly under the USDT optimization feature: MetaMask supports gasless USDT0 transfers, and Etherscan presents USDT transaction records in a more intuitive manner.

It's like upgrading to a new phone, but all the original apps are still available. Users retain a familiar environment while gaining enhanced features.

USDT from other networks can also be seamlessly imported through the existing LayerZero cross-chain bridge. USDT0 uses LayerZero's OFT (Omnichain Fungible Token) standard, fundamentally addressing the complexity of traditional cross-chain solutions. In the traditional model, each network maintains a separate version of USDT, leading to fragmented liquidity.

After adopting the OFT standard, USDT0 is completely consistent across all networks. Whether it comes from Ethereum or Arbitrum cross-chain bridging, the final result is the same USDT0, thereby eliminating the problem of liquidity fragmentation and simplifying asset transfers.

The future plan also includes a Stable Name System, which will replace complex wallet addresses with human-readable names, further enhancing usability. Similar to email addresses, users will be able to directly send funds to identifiers like "ryan.stable" or "jay.stable" in the future. Although it is still in the planning stage, implementation and popularization may take time. From a technical perspective, it is expected to adopt a structure similar to Ethereum ENS (Ethereum Name Service) but will include features optimized for USDT transactions.

Other Technical Components

The network is still developing StableDB, a specialized database architecture that separates state submission from state storage.

In most blockchains, new blocks must be fully written to disk before the next block can be processed, and the delay in disk writing can slow down processing speed. StableDB eliminates this bottleneck by confirming execution results in memory first and then writing to disk in parallel.

This architecture also incorporates memory-mapped file I/O (mmap), which directly maps files stored on disk into the operating system's memory space, making read and write operations for frequently used data nearly indistinguishable from operations in memory, thus bypassing slower disk access and significantly enhancing processing speed. The effect is similar to a waiter in a restaurant quickly jotting down orders, allowing the kitchen to start preparing immediately, with the order later entered into the cashier system.

For enterprise customers, the Stable plan introduces "Guaranteed Block Space", which specifically allocates a portion of transaction capacity to ensure stable throughput even during network congestion, just like a bus lane on a highway. At the same time, a "Confidential Transfer" feature is also in development, which can hide transaction amounts while complying with anti-money laundering and KYC regulations. Looking to the future, the current execution engine written in Go will be replaced by the C++ based StableVM++. This upgrade will provide underlying memory control and performance optimization, aiming to achieve up to six times the execution speed increase.

5. Expansion Scenarios of the Stable Ecosystem

Stable positions itself as the new "Trojan Horse."

Gas-free USDT transfers, sub-second settlement, and a simplified user experience are all entry incentives that attract users. This "loss-leader" strategy aims to drive mass adoption. Once the user base is established, Stable can generate revenue through a wide range of supporting services.

On this basis, there seem to be three main extension paths that are the most feasible.

Source: Tiger Research

Scenario 1: Expansion of Institutional Services and Partnerships

Stable can expand its ecosystem by broadening institutional services and partnerships. A key factor is high-end services such as "guaranteed block space," which ensures low cost and high reliability.

This strategy is particularly effective in cross-border settlements for enterprises. Using Stable instead of traditional international transfers can significantly reduce time and costs. However, during peak periods such as the end of the month, processing speed becomes critical. Dedicated block space can ensure consistent speed, and enterprises are willing to pay a premium for this reliability.

The same logic applies to fintech collaborations. Remittance companies like Limitless and Wise can provide better services to their customers by integrating Stable's infrastructure; in return, Stable charges fees based on transaction volume.

This model is also applicable to cryptocurrency trading platforms. Trading platforms can obtain a reliable partner by using Stable for USDT deposits and withdrawals. Although individual users can use these services for free, the real business objective is high-frequency institutional traders.

Scenario 2: Rapid Growth of On-Chain Service Ecosystem

Free transfers and high-speed performance will greatly increase the usage frequency of on-chain services. Currently, on Ethereum, even a $10 DeFi transaction often requires high gas fees. On Stable, small-scale DeFi operations are economically viable.

Users can invest $100 in liquidity or participate in staking without incurring significant costs, which will expand the user base of DeFi. Stable profits from the execution fees of smart contracts from these activities, and as trading volume increases, the overall scale will also expand.

A more significant change is the emergence of new on-chain services. Real-time micropayments will enable content subscriptions, in-game items, and tipping to be completed directly on the blockchain. Paying a YouTube creator $1 or paying $0.10 for a news article has become possible.

Once this micro-payment ecosystem is formed, the number of transactions will grow exponentially. The fees for each transaction may be small, but the accumulated transaction volume will reach a considerable scale.

Scenario Three: Deep Integration with the Real Economy

The most ambitious scenario is for stablecoins to become the standard payment method in the real economy. In Southeast Asia and Latin America, USDT payments have already started to rise, but high fees and low speed limit their adoption.

If Stable can solve these problems, offline commerce may undergo rapid changes. Buying coffee for 2 dollars in a café in Vietnam or purchasing daily necessities with USDT at a convenience store in the Philippines could become commonplace.

This will fundamentally change Stable's business model, transforming it from a blockchain network into a provider of global payment infrastructure. It can offer payment terminals to merchants and digital wallets to consumers, charging fees from both parties.

By charging a minimal fee for every USDT transaction occurring on the Stable network, it can establish a stable income base while transaction volume grows.

The delay in the launch of central bank digital currencies (CBDCs) has also brought opportunities. If private stablecoins are more convenient and accessible than government-issued digital currencies, users will naturally choose the former.

VI. The Real Strategy of Stable

Stable's strategy is very clear: to attract users through free USDT transfers and ease of use. As the ecosystem expands, build a business model around the diversified services that arise from this.

A single transaction may not generate much income, but the rapidly growing trading volume can create a huge overall scale. This is similar to Amazon's early strategy: selling books at near-cost prices to attract customers, and then making huge profits through cloud services and advertising.

Free transfers are just bait. The real goal is to become the central hub of the USDT ecosystem, ensuring that all transactions go through Stable. Once the network effect is established, it will be difficult for users to migrate to other platforms.

Ultimately, Stable will firmly secure its position in the market. This is the true power of the new Trojan horse.