coindesk.com
Stablecoin infrastructure firm Brale is rolling out an interoperability protocol designed to end what it says is a bottleneck in the industry's growth: moving a rapidly expanding number of custom stablecoins across blockchains.
Dubbed ION Protocol, it allows participating stablecoins to move between blockchains by burning tokens on one network and minting an equivalent amount on another. Unlike most blockchain bridges, the model does not require liquidity pools to be pre-funded on every supported chain.
While the $300 billion stablecoin market is dominated by Tether's USDT and Circle Internet's $USDC, new participants are piling in. Banks, fintechs, crypto firms and asset managers are increasingly issuing their own branded tokens for payments, settlements and tokenized assets.
Data provider CoinGecko already tracks more than 350 of the coins, whose value is pegged to a real-world asset such as a fiat currency, underscoring the growing need for infrastructure to connect an increasingly fragmented ecosystem. Brale argues today's interoperability model won't scale as more issuers introduce their own versions.
Stablecoin scaling problem
The company supports over a hundred stablecoin programs across more than 30 blockchains, founder and CEO Ben Milne said in an interview with CoinDesk. Many of its customers process billions of dollars in monthly payment volume while maintaining relatively small stablecoin balances because their tokens are designed for transactions rather than investment.
Moving assets across blockchains typically depends on liquidity pools or wrapped tokens, requiring capital to be locked up across each supported network. As the number of stablecoins and blockchains grows, the capital requirement grows with it.
“The liquidity between stablecoin programs is the No. 1 barrier to scaling bespoke stablecoins,” said Milne. “There's not enough capital in the world to solve the problem,” he added.
With insufficient capital to build deep liquidity pools for every stablecoin on every blockchain, the current model becomes unsustainable as issuance accelerates. Instead, ION adopts a burn-and-mint approach similar to $USDC issuer Circle's Cross-Chain Transfer Protocol (CCTP), extending the model to any participating stablecoin issuer rather than a single token.
The protocol debuts with partners including Monad, Rain, Coinflow, Turnkey, Etherfuse, Spark and Canton, initially on testnet before a broader rollout.