SS #17 - PayPal Unlocks Merchant Crypto Payments

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Welcome to our 17th edition of the StableScope. A new 2x a week, stablecoin-focused newsletter from Launchy. Given the growth of the vertical, there's an increasing demand for more recurring reporting and curation on stablecoins.

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In Today's Edition:

• Headline: PayPal Unlocks Merchant Crypto Payments

• Quick Bites: OSL Group raises $300M ahead of Hong Kong's stablecoin regulation plan

• Yield of the Week: 18.134% APY in USDC on Gauntlet

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HEADLINE

PayPal Unlocks Merchant Crypto Payments

State of play: PayPal has launched "Pay with Crypto," a new service enabling U.S. small businesses to accept over 100 cryptocurrencies, automatically converting them into the PYUSD stablecoin to streamline international payments with competitive fees.

• The service will support a wide range of cryptocurrencies, including major tokens and select memecoins, accessible from popular wallets like Coinbase, MetaMask, and Exodus.

• All accepted cryptocurrencies will be instantly converted into PayPal's proprietary PYUSD stablecoin, which is increasingly integrated into its business model and currently holds an estimated $900M market capitalization.

• PayPal is offering initial transaction fees of 0.99% (rising to 1.5% after the first year), positioning them as significantly lower than traditional international credit card processing fees, aiming to boost merchant profit margins.

What’s Next: Expect increased PYUSD utility and adoption, as the service rolls out and merchants are incentivized by lower fees and potential PYUSD yield. This move will likely pressure competitors to follow suit, further mainstreaming crypto payments.

Why it Matters: This initiative marks a significant step towards mainstream crypto adoption, bringing digital currency payments to a vast network of small businesses. It represents an evolution in international payments, offering a potentially cheaper and more efficient alternative to traditional systems.

Our Take: PayPal's strategy is smart: consolidating diverse cryptos into PYUSD manages risk while offering broad payment options. This strengthens PYUSD's position as critical payment infrastructure.

QUICK BITES

• Plasma raises $373M in 10-day token sale.

• Interactive Brokers mulls stablecoin launch.

• First Digital’s USD stablecoin is natively live on TON.

• Wyoming's Stablecoin is expected to debut next month.

• SYRUP bucks bearish crypto slump with 23% upside move.

• Nigeria opens doors to stablecoin firms under regulatory oversight.

• OSL Group raises $300M ahead of Hong Kong's stablecoin regulation plan.

• Bybit and Tether launch strategic partnership to accelerate crypto adoption in Brazil.

• Tether acknowledged by U.S. Authorities for freezing $1.6M connected to terrorism financing.

YIELD OF THE WEEK

Gauntlet hJLP 1X: 18.13% APY in USDC

• Gauntlet’s hJLP 1x vault provides yield from Jupiter Liquidity Pool (JLP) while neutralizing price risk through short positions in underlying assets (SOL, ETH, BTC), offering reduced volatility and passive management.

• Drift Protocol is the primary platform for executing these hedging strategies, offering deep liquidity, cross-margining for capital efficiency, and an on-chain orderbook for reduced risk.

• The strategy involves converting user deposits into JLP, collateralizing them on Drift, and maintaining hedge positions through automated, dynamic rebalancing.

Dolomite Looped sUSDe: 19.57% - 69.24% APR in sUSDe

• Dolomite’s strategy involves continuously leveraging sUSDe (1x to 8x) by using it as collateral to borrow USDe and then converting that USDe back into more sUSDe. It's designed to be delta-neutral, as both assets are stablecoins with a direct price correlation, thus minimizing intrinsic price exposure.

• The strategy primarily generates returns through the inherent price appreciation of sUSDe (which reflects its yield) and additional Ethena Sats rewards. Currently the yield on sUSDe is 11.95% APY

• The main risks include the USDe borrow rate rising above the sUSDe yield, which could lead to negative returns and potential liquidation if prolonged. Additionally, the inherent smart contract risk associated with DeFi protocols is always a factor.

Euler mBASIS / RLUSD on Euler Yield: 25.48% - 153.48% in mBASIS

• Euler enables leveraging mBASIS as collateral, borrowing RLUSD up to 8.31x to maximize yield.

• With a max LTV of 88%, the liquidity in this pool is up to $15.44M.

• mBASIS is structured to reflect the dynamics of crypto funding rate strategies within market-neutral frameworks by Edge Capital on MidasRWA.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.