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Last night, I went to my third Mets game of the season, and I was unfortunate enough to spot Grimace, the big, terrifying purple lump that’s become the team’s unofficial mascot during a recent winning streak.
It’s crazy to think that McDonald’s actually put this monstrosity in commercials back in the day — and then were bold enough to reboot him? Anyways:
What can stablecoins actually buy?
I’ve accumulated a few Solana-based USDC stablecoins while buying memecoins for this newsletter, and this morning, I set out to find a way to spend them on something else.
My Google search for “where to spend Solana online” turned up an aggregator that sent me to websites including an Alabama-based store for “silkie”-breed chickens and a Greek cosmetics site (I think? The words were all in Greek, so it was a bit hard to tell).
What the venues had in common is that they wouldn’t take my stablecoins as payment.
It’s been more than two years since Solana Pay launched with the promise of ushering in a new era of payments. And it’s been roughly two months since PayPal deployed its stablecoin on Solana with similar ambitions. These programs tout Solana’s cheap fees and fast confirmation times as ideal for making real-world payments happen on a blockchain. Stablecoins are a natural fit for this, since they track the currencies we already all use for payments.
But it’s still most common to use stablecoins within the existing crypto economy. A large amount of the PYUSD initially minted on Solana was loaned out on the DeFi platform Kamino Finance rather than used as a means of exchange for purchasing tangible goods. There doesn’t seem to be widespread demand for crypto payments outside of the crypto world, yet. This is an age-old problem in crypto and can be seen in bitcoin’s narrative pivot from being decentralized peer-to-peer electronic cash to a reserve asset for corporations (and potentially the US government).
One Redditor who runs a custom merch site said they integrated Solana Pay’s Shopify plugin, but “sadly no one uses it.”
“In the 3 or so years we’ve accepted crypto payments, one person has paid in btc,” they added.
The Solana Pay Shopify plugin, which is overseen by crypto payments company Helio, had processed over $50 million in transactions in its first six months or so, I previously reported. That’s not nothing, but it’s also not a very big drop in the trillions-of-dollars payments industry bucket.
One potential hurdle to crypto payments taking off more broadly is the cost of converting between crypto and fiat currencies. If fees are too high, it could wipe out potential savings from eschewing credit cards — and holding USDC in a crypto wallet isn’t useful to most merchants.
Helio offers an auto off-ramp feature, and a spokesperson told me this program is powered by a startup called Bridge and costs 0.25% per transaction for merchants.
Credit cards usually charge merchants 1.5% to 3.5% per transaction. Even combining the Helio plugin’s 0.75% fee, the 0.25% off-ramp fee, and the fraction of a cent typically charged by the Solana network, this would still be cheaper. Maybe a more straightforward explanation for the lack of adoption is that Solana is very new whereas credit cards are less new, and everybody already uses them.
At the end of my experiment, I used Helio’s Solana Pay plugin to buy canned coffee from Raposa Coffee. The plugin had me sign into my Phantom wallet before choosing which asset I wanted to pay with and confirming the payment on Phantom. The whole process involved a bit of clicking around, but it definitely was less arduous than entering a credit card number by hand.
The total came out to $12 after shipping. That’s one expensive coffee, but it’s a preview, maybe, of Solana’s uses beyond memecoin trading.
— Jack Kubinec
Zero In
$74 billion and $3 billion
Those are roughly the amount in stablecoins being held on Ethereum and Solana, according to data from Artemis.
Much has been made of Solana passing Ethereum in certain DeFi activity metrics, but Ethereum still retains a large lead in assets being held onchain, and stablecoins magnify this trend. Ethereum’s market capitalization is roughly 4.8 multiples of Solana’s, but its stablecoin market cap is nearly 25x Solana’s stablecoin market cap.
Stablecoin transfer volume is a notably unreliable statistic, but to the extent that you trust it, Ethereum wins by roughly 4x in that category, too.
— Jack Kubinec
The Pulse
On Tuesday, the SEC announced its decision to amend its complaint against Binance, dropping allegations that certain tokens, including solana (SOL), are securities. Previously, the complaint had led to widespread uncertainty for market participants, resulting in platforms like Robinhood delisting SOL, negatively impacting the asset’s market presence.
Some see the SEC’s recent decision to remove these allegations from the Binance case as a potential easing of regulatory pressures on these tokens, even though the broader regulatory environment remains precarious.
In celebration of the news, posters on X rallied to one of their favorite pastimes: bashing SEC Chair Gary Gensler. @BrianeKare62898 commented, “Big W for crypto holders Gary’s taking Ls left and right gotta keep eyes on this case.” @TrumpelonCrypto joked that, “Gensler is busy doing his last rites!” User @AvoToastCapital speculated, “Gary Gensler tryna do what he can to keep his job now,” while @LpcMark1 was more severe, suggesting, “Now put gary in prison for market manipulation.” @Artsy_rare added, “Wasted everyone’s time fire the bald guy.” @robert81225 questioned, “How does Gensler even have a job anymore? Him n Warren are so out of touch with reality it’s embarrassing.”
Reflecting on the broader implications, @TrueCryptoPower remarked, “BlackRock and other funds with the world’s money get what they want […] No SEC will stand in their way.” Meanwhile, @solendshill hurrahed, “The most transformational technology ever existed up to date does not need anything to fully blast through the speed of light.”
— Jeffrey Albus
One Good DM
A message from Arnold Lee, CEO of Sphere:
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