The Fusion of AI and Stablecoins: The Dawn of a New Era in Decentralized Finance

In the latest episode of the "WEB3 MINT TO BE" podcast, DeFi pioneer Min Dao engaged in an in-depth discussion with host Alex about the intersection of stablecoins, Decentralized Finance, and AI. This article summarizes the key points from the conversation.

Changes in the Stablecoin Market Landscape

The civil path points out that since the LUNA crash in 2022, there has been a significant differentiation in the stablecoin market:

• Fiat-backed stablecoins still dominate the market
• Algorithmic stablecoins and over-collateralized stablecoins are gradually fading away.
• Emerging financial stablecoins like Ethena's USDE( are beginning to take the spotlight.
• Large technology companies and financial institutions are beginning to enter the stablecoin space.

He emphasized that although the total TVL of the entire crypto market has not yet recovered to historical highs, the minting volume of stablecoins has reached a new high of about 250 billion dollars. This indicates that the demand for stablecoins is breaking away from the cyclical fluctuations of cryptocurrencies.

Evolution of the Regulatory Environment

The United States and the European Union are accelerating the legislative process for stablecoins. According to the public opinion, this will have a profound impact on the industry:

• Clarified the identity and qualification requirements of the stablecoin issuer
• Established a tiered regulatory system ) at the federal and state level (
• May limit large tech companies from directly issuing stablecoins.
• Provides a reference framework for regulations in other countries and regions

He pointed out that these regulatory measures will promote the development of compliant stablecoins and may eliminate some non-compliant projects.

USDT vs USDC: The Battle for Market Share

Minda analyzed the differences in market share between USDT and USDC:

• USDT is more like a "shadow dollar", with a wider usage scenario ) such as perpetual contract margin, OTC trading, etc. (
• The main advantage of USDC lies in its deposit and withdrawal channels, but its use cases are relatively limited.
• The network effects and liquidity advantages of USDT are significant, while USDC still relies on high channel costs to maintain its market position.

He believes that USDC and other newcomers will find it difficult to challenge USDT's dominance in the short term.

The Future of Decentralized Stablecoins

Regarding decentralized stablecoins, Mindao believes that their positioning and narrative are changing:

• Pure payment-oriented decentralized stablecoins find it difficult to compete with fiat-backed stablecoins
• Financial management type decentralized stablecoin ) such as Ethena ( has certain development space.
• As a stablecoin ) for the internal accounting system of DeFi protocols, such as Aave's GHO (, it may continue to exist.

He emphasized that decentralized stablecoins need to find specific application scenarios, rather than directly competing with fiat stablecoins.

The Integration of AI and Decentralized Finance

Minda believes in the potential of the integration of AI and Decentralized Finance:

• AI can solve the limitations of traditional Decentralized Finance development models, achieving more flexible business logic.
• Future DeFi projects may only have 10-20% of their logic implemented on-chain, with the rest completed by AI agents.
• AI can help DeFi projects adapt to market changes more quickly, shortening product iteration cycles.
• Stablecoins will play an important role in the payment and settlement by AI agents.

He predicts that the next generation of Decentralized Finance products will no longer be limited to pure on-chain logic, but will be a hybrid of AI and smart contracts.

Challenges and Opportunities

Mindaoy also pointed out some challenges faced by the integration of AI and Decentralized Finance.

• The "hallucination" problem of AI models needs further resolution.
• Need to develop a more specialized MCP)Modular Cognitive Protocol( to handle specific Decentralized Finance tasks
• The introduction of AI may bring new security risks, such as environmental poisoning, etc.

However, he believes that these issues are all surmountable, and AI may actually help to address some of the traditional Decentralized Finance security problems.

Conclusion

The summary of the people's path states that the intersection of stablecoins, Decentralized Finance, and AI is ushering in a new era. Although challenges still exist, the innovative potential in this field is immense and deserves continuous attention and exploration from the industry.