Solana Foundation President: Anticipate a Drop in Profits for Tether and Circle

Disregard meme coins. By 2025, the landscape of crypto asset is being reshaped by stablecoins. Tether’s USDT continues to reign supreme, dominating with over $175 billion in early October 2025. In the runner-up position is Circle’s USDC, while algorithmic options like Ethena’s USDe and Sky’s USDS are experiencing remarkable growth.

The surge in stablecoins has invigorated the overall crypto market, benefiting some of the top cryptocurrencies available for purchase. As Tether generates billions, investments have shifted to Ethereum and Bitcoin, propelling both to new all-time highs in 2025. While USDT, USDC, and other stablecoins thrive, their creators are reaping immense profits. Each $1Bn increase in USDT or USDC supply translates to revenue for the issuer derived from interest on its treasury bill holdings, which primarily supports these coins.

(Source: Coingecko)

In numerical terms, during the first half of 2025, Tether reported a net profit of $5.7Bn, primarily fueled by interest income generated from its reserves, predominantly U.S. Treasuries and similar assets. Conversely, Circle recorded net income of around $315.8M in the same timeframe, with its reserves yielding $1.23Bn.

DISCOVER: 10+ Next Crypto to 100X In 2025

Solana Foundation President Raises Concerns: Tether, Circle Profits Poised to Decline

Despite these staggering numbers and the stronghold of Tether and Circle in the stablecoin arena, Solana Foundation President Lily Liu is sounding the alarm.

In a recent update on X, she cautioned that Tether and Circle are on the verge of a significant transformation. A substantial share of their revenue is expected to be redistributed, not only to their platforms but also to the foundational networks and trending dApps managing vast amounts of value.

(Source: calilyliu, X)

She emphasized that, in contrast to the current situation where most stablecoin issuers retain every dollar, the environment is transitioning rapidly. The expected reorganization of the $305Bn stablecoin sector will finally start reallocating those profits to users.

Liu articulated that the “profit pool” established by the assets collateralizing stablecoins is fundamental to this shift. At present, following the recent interest rate reduction to the 4–4.25% range, issuers typically earn approximately a 4% yield from Treasuries. This yield, which reflects the net interest margin (NIM), is what enabled Tether to amass billions in net profits. In 2024, Tether alone secured 100% of the NIM, resulting in $13.7Bn.

However, as stablecoins gain wider acceptance and additional contenders emerge to issue their own, this balance of power is shifting. Major stakeholders on prominent blockchains, where these stablecoins are created and exchanged, are now competing for a share of the profits. To ensure immediate adoption, issuers might need to forfeit substantial portions of their margins in exchange.

DISCOVER: 9+ Best Memecoin to Buy in 2025

Is It Time for Network dApps and Tech Companies to Take the Lead?

A notable instance is USDC. While Circle represents the public image of the stablecoin, it partners with Coinbase to share revenue, with the exchange boasting over 100 million users globally.

Consequently, even as Circle generates billions from its Treasury assets, Coinbase secures a significant portion, leveraging the trading volume and network effects that price floor Circle’s expansion.

Circle earned ~$1.7b revenue in 2024 and paid out $900M+ to @coinbase as a distribution partner

That ~$1B going to Coinbase likely comes with little to no cost/opex to serve. At 10x earnings = $10 B mkt cap and likely contributes ~25% of $COIN valuation

For perspective -… pic.twitter.com/2Et3yaSgas

— James Ho (@jamesjho_) April 1, 2025

This collaboration highlights how significant platforms managing vast assets utilize their power to negotiate strongly for their share.

PayPal’s PYUSD stablecoin, issued by Paxos and currently overseeing over $1.1 billion, follows a comparable strategy. By harnessing PayPal and Venmo’s enormous user base, Paxos achieved swift integration while allowing the payment giant to profit from the coin. The greater the issuance of PYUSD, the more revenue flows toward PayPal, bolstering its profitability.

1/Breaking News: @PayPal USD (PYUSD) is live on Solana!

PayPal USD stablecoin issued by @Paxos will leverage Solana and coin extensions to serve over 30m+ merchants, empowering users with fast and secure stablecoin transactions. pic.twitter.com/h66iejTv50

— Solana (@solana) May 29, 2024

This trend is picking up speed among trending protocols as well. Hyperliquid recently introduced its native stablecoin, USDH, issued by Native Markets. The framework stipulates that a significant portion of revenue must be shared with protocol users and used for buying back and burning HYPE tokens from the marketplace.

Native Markets securing the USDH ticker sets up two big shifts:

+ A brand-new token airdrop farm
+ A vampire attack on USDC/USDT

Here’s why: NM’s proposal splits yield 50/50.
Half goes to HYPE buybacks
Half fuels ecosystem growth

That “growth” side is essentially a fresh… pic.twitter.com/9BOdZi07FI

— Cypher (@NxtCypher) September 19, 2025

In particular, +50% of USDH revenue will base level the Hyperliquid Assistance Fund for HYPE buybacks and burns, while the remainder is reinvested into the USDH ecosystem.

DISCOVER: 16+ New and Upcoming Binance Listings in 2025

The post Solana Foundation President: Expect Tether and Circle Profits to Tank appeared first on 99Bitcoins.