12. Scalability and Yields of DEFI Stablecoin Pairs

The use of DEFI stablecoin pairs provides a strategic advantage in terms of scalability, allowing us to scale up or down far more rapidly than our centralized counterparts. This efficiency is attributed to the readily available liquidity in DEFI pools, which can be withdrawn or deposited in mere minutes.

12.1. Scalability Factors

The scalability of our stablecoin is primarily constrained by the Total Value Locked (TVL) and the Volume/Yields generated. Although the overall market capitalization of stablecoins is approximately $230 billion, pools involving stablecoin-to-stablecoin pairs constitute only about 1% of this market. As the DEFI sector continues its exponential growth, it is anticipated that the TVL associated with stablecoins will expand correspondingly.

12.2. Enhancing Yields and Overcoming TVL Limitations

One viable strategy to enhance yields and mitigate the limitations posed by TVL is to engage in the arbitrage of USDC against USDT and other non-stable pairs. For instance, if USDC and USDT are trading at parity, but the USDC/BTC pair is valued at $99,000 USDC while the USDT/BTC pair is valued at $99,500 USDT, we can capitalize on this arbitrage opportunity by buying BTC with USDC and selling for a profit in USDT . This method not only increases yields but also significantly improves scalability with minimal risk.

By exploring these strategies, we can effectively amplify our yields and navigate the constraints of TVL, positioning ourselves advantageously within the rapidly evolving DEFI landscape.