Author: Jae, PANews
Stable Blockchain’s Tumultuous Debut: ‘Tether’s Son’ Grapples with Market Skepticism and Trust Issues
The highly anticipated Stable blockchain, often dubbed “Tether’s son” due to its deep incubation by core Bitfinex and Tether teams, has officially launched its mainnet and the STABLE token. Positioned as a dedicated Layer 1 for stablecoins, Stable generated considerable buzz, yet its market reception has been anything but stable.
Amidst a tightening liquidity environment, Stable’s launch on December 8th failed to replicate the initial success seen by competitors like Plasma. Instead, the STABLE token experienced a significant price drop and faced immediate accusations of insider trading, casting a shadow over its ambitious vision. Is this merely a difficult start for a project destined to rise, or does it signal deeper challenges for the new stablecoin-centric blockchain?
STABLE Token Plunges 60% Amidst Insider Trading Allegations
Prior to its mainnet launch, market sentiment surrounding Stable was overwhelmingly optimistic. The project’s two pre-deposit rounds collectively attracted over $1.3 billion from approximately 25,000 unique addresses, averaging $52,000 per participant. This strong engagement, especially during a period of broader market downturn, underscored investor confidence in the “Tether-backed” narrative and hopes for a lucrative debut akin to Plasma’s.
Prediction markets like Polymarket reflected this enthusiasm, with an 85% probability once estimated for STABLE’s Fully Diluted Valuation (FDV) to exceed $2 billion.
However, the adage “buy the rumor, sell the news” proved true once again. The STABLE token’s performance on its Token Generation Event (TGE) day was notably disappointing. Opening at approximately $0.036, it briefly peaked near $0.046 before plummeting over 60% to a low of $0.015. By December 9th, its FDV had shrunk to $1.7 billion, with thin liquidity exacerbating the downward pressure and deterring new buyers.
A significant contributing factor to STABLE’s struggles is the **absence of listings on major centralized exchanges (CEXs) like Binance, Coinbase, and Upbit**. This crucial omission severely limits the token’s accessibility to a broader retail audience, thereby hindering liquidity and price discovery.
The sharp decline and initial controversies quickly ignited community debate:
- DeFi researcher @cmdefi expressed low expectations, citing “amateur operations” during the early stages and questioning the project’s seriousness.
- Crypto KOL @cryptocishanjia suggested that the market prefers novel narratives. With a clear leader like Plasma established, consensus for a “second-runner” like Stable might be diluted, leading to reduced profit margins.
- Former VC practitioner @Michael_Liu93 critically noted Stable’s “inflated FDV” of $3 billion pre-launch, deeming it a long-term shorting opportunity. However, he also speculated that the lack of top CEX listings could paradoxically set the stage for a reversal.
Adding to the market’s skepticism were **allegations of insider trading** during the pre-deposit phase. Reports surfaced of a whale wallet depositing hundreds of millions of USDT before the officially announced opening time for the first pre-deposit round. This sparked widespread community outrage regarding fairness and transparency, yet the project team proceeded with a second pre-deposit round without directly addressing the accusations. Such a trust deficit, particularly for a project built on the promise of transparent, reliable, and compliant infrastructure, poses a significant hurdle to community engagement and its long-term narrative.
USDT as Native Gas: Innovation Meets Tokenomics Concerns
At its core, Stable’s architecture is meticulously engineered for optimal transaction efficiency and user experience. **It stands out as the first Layer 1 blockchain to utilize USDT as its native gas fee**, offering a near-gasless experience for users. This innovative design significantly reduces friction by allowing users to pay transaction fees directly in USDT, eliminating the need to acquire and manage volatile native governance tokens. This feature is poised to enable sub-second settlements and minimal fees, making Stable particularly attractive for daily transactions and institutional payments where price stability and predictability are paramount.
Stable employs the **StableBFT consensus mechanism**, a Delegated Proof of Stake (DPoS) model customized from CometBFT (formerly Tendermint) and fully compatible with the Ethereum Virtual Machine (EVM). StableBFT guarantees transaction finality through Byzantine fault tolerance, ensuring irreversible transactions—a critical requirement for payment and settlement systems. Furthermore, its ability to support parallel processing of proposals by nodes ensures high throughput and low latency, meeting the stringent demands of a modern payment network.
The project also boasts strong foundational support. Stable secured $28 million in seed funding, co-led by Bitfinex and Hack VC. The involvement of Tether/Bitfinex CEO Paolo Ardoino as an advisor further solidified market perceptions of a strategic alliance with the stablecoin giant Tether.
The leadership team also brings substantial industry experience. Stable CEO Brian Mehler previously served as VP of Venture Capital at Block.one, managing a $1 billion crypto fund and investing in major players like Galaxy Digital and Securitize. CTO Sam Kazemian, founder of the Frax hybrid algorithm stablecoin project, is a seasoned DeFi expert who has advised on US stablecoin legislation.
However, an unexplained **change in leadership** early on—the replacement of original CEO Joshua Harding (former head of Block.one investments) without any public announcement—has also raised questions about the project’s transparency, mirroring the concerns sparked by the pre-deposit controversy.
Tokenomics: Governance-Focused, but with Long-Term Allocation Risks
Stable’s tokenomics model deliberately separates network utility from governance value. The **STABLE token’s sole functions are governance and staking**. It is not used for network transaction fees, which are exclusively settled in USDT. Token holders can stake STABLE to act as validators, securing the network, and participate in critical decisions such as network upgrades, fee adjustments, or the introduction of new stablecoins through community voting. This design, while promoting decentralized governance, means the token does not directly capture network revenue, potentially limiting its long-term value proposition before a robust ecosystem fully materializes.
A significant point of concern for investors is the **allocation of 50% of the total supply (100 billion tokens) to the team, investors, and advisors**. While these tokens are subject to a one-year lock-up period (cliff) followed by linear release, this substantial concentration of tokens could exert long-term selling pressure and impact price stability once vesting begins.
Fierce Competition and the Imperative of Execution
The stablecoin public chain sector is intensely competitive. Established Layer 1s like Polygon, Tron, and Solana already command significant user bases and transaction volumes in global remittances and payments. Polygon and Tron are dominant in regions like Southeast Asia, South America, the Middle East, and Africa for low-cost transfers, while Solana leverages its high throughput for payment applications.
Moreover, Stable faces direct competition from **emerging vertical Layer 1s specifically designed for stablecoin payments and institutional use cases**. Examples include Circle’s Arc, which aims to be an institutional-grade infrastructure for on-chain treasuries, global settlements, and tokenized assets. Similarly, Tempo, backed by Stripe and Paradigm, is another formidable contender targeting the same payment-centric blockchain niche.
In the payment and settlement domain, **network effects are the ultimate determinant of success**. Stable’s ability to thrive will depend on its rapid execution in leveraging the existing USDT ecosystem, attracting developers and institutional users, and quickly establishing a first-mover advantage in large-scale settlement. Insufficient execution or market penetration could see it outpaced by rivals with stronger integration capabilities or deeper regulatory compliance frameworks.
Stable’s roadmap highlights **enterprise integration and developer ecosystem building between Q4 2025 and Q2 2026** as critical milestones. The successful realization of these objectives will be crucial in validating Stable’s core value proposition and the viability of its verticalized L1 approach. With only about six months from mainnet launch to the anticipated pilot implementations, Stable must navigate complex challenges including technical optimization, institutional onboarding, and ecosystem nurturing with exceptional speed and precision. Any missteps in execution could further erode market confidence in its long-term potential.
The launch of Stable’s mainnet signals a new, infrastructure-focused phase in the stablecoin race. Ultimately, whether Stable can achieve its ambitious goal of reshaping global payment networks will hinge not on its initial narrative, but on its sustained execution.
(The above content is an authorized excerpt and reprint from partner PANews, original link)
Disclaimer: This article is for market information purposes only. All content and views are for reference only, do not constitute investment advice, and do not represent the views and positions of BlockBeats. Investors should make their own decisions and trades. The author and BlockBeats will not bear any responsibility for direct or indirect losses resulting from investor transactions.
