Stablecoins Surpass Visa in Transaction Volume, Reaching $18 Trillion

DeFi founders seeking success in the current crypto landscape should focus on addressing real-world problems, as advised by Rob Hadick, a partner at Dragonfly. This approach has been exemplified by the success of stablecoins, which have demonstrated significant utility and adoption. Stablecoins have surpassed Visa in transaction volume, processing over $18 trillion in transactions, highlighting their role in facilitating faster and cheaper cross-border payments and digital asset transfers. This milestone underscores the growing integration of digital assets into the mainstream financial ecosystem.

Hadick believes that the backdrop for crypto right now “is as good as it’s been” now that the US is mulling regulation and has been overall friendlier to the industry. Add in Hadick’s optimistic stance on things like stablecoins, and bam! He says he’s “never been more bullish for crypto in the US.” However, he noted that valuations across crypto are still “very high.”

Dragonfly is slowing down a bit in order to properly pick and choose its spots, he told me. But that makes sense, given that it focuses on Series A and B rounds rather than pre-seed or seed stages. “We frankly haven’t done a lot. In fact, Q1 was maybe our slowest quarter ever in terms of new term sheets out, new term sheets signed,” he said. But that’s not necessarily because of the overall macro situation, he was careful to add. It’s partially due to Dragonfly balancing itself out because it was “very aggressive last year.”

It’s also because Dragonfly’s “really sensitive” to the fact that valuations have taken off. “And to us, [that means] just changing the way we’ve invested over the last few years. We do less deals, but we do larger check sizes and take more ownership,” he noted, so that they can partner more with their portfolio companies. So far, the firm’s been very busy as the second quarter gets underway. “We did one term sheet out of all of Q1, and the first two weeks of Q2, we’ve actually had [a few] term sheets out already at the seed stage,” he said.

One thing I was curious about, admittedly, was Hadick’s thoughts about stablecoins. He told me there’s a lesson buried in the success of stablecoins for the crypto native folks. Despite the volatility we’ve seen across DeFi and crypto, stablecoins have managed an upward trajectory — and yes, there’s still a slight correlation between stablecoins and crypto. But the difference is that they’ve managed to hit the nail on the head when it comes to solving real-world issues.

For DeFi projects looking to succeed in crypto right now, Hadick advises founders to “solve the problems” that folks in the real world are experiencing. “Let’s continue to make DeFi rails better than traditional rails,” he said, but it’s about usability at the end of the day and “bringing a better experience for the mass market.”

The U.S. Congress has proposed several bills on stablecoin oversight, but none have been passed, leaving the payments ecosystem in a state of regulatory uncertainty. This lack of clear regulation has not hindered the growth of stablecoins, which continue to gain traction due to their stability and utility. DeFi projects can learn from this by focusing on solving practical problems and providing tangible benefits to users.

The yields of most DeFi protocols have dropped to between 2% and 4% in 2024, down from the returns exceeding 10% during 2021–2022. This shift indicates a maturing market where sustainability and real-world applications are becoming more important than speculative gains. DeFi founders should prioritize building robust and user-friendly platforms that offer practical solutions to financial challenges.

The growing role of cryptocurrencies in the mainstream financial system has been acknowledged by regulators, who are considering creating a legal framework for stablecoins. This recognition of the potential of digital assets presents an opportunity for DeFi projects to align with regulatory expectations and build trust with users. By focusing on compliance and transparency, DeFi founders can position their projects for long-term success.

The success of stablecoins can be attributed to their ability to combine the advantages of the crypto market with the reliability of traditional finance. Unlike some anonymous projects, stablecoins offer a level of trust and stability that appeals to a broader audience. DeFi founders should aim to replicate this balance by creating projects that are both innovative and trustworthy.

In summary, DeFi founders can learn from the success of stablecoins by focusing on solving real-world problems, prioritizing sustainability and compliance, and building trust with users. By adopting these strategies, DeFi projects can navigate the current regulatory uncertainty and position themselves for long-term success in the crypto landscape.