This episode unpacks Eco's strategy to aggregate the fragmented trillion-dollar stablecoin market, creating a unified liquidity layer crucial for efficient cross-chain operations and future on-chain applications.
Speaker Introductions: The Minds Behind Eco
- Ryan Saxs (CEO, Eco): From Physics to Crypto Law
- Ryan details his unconventional path from studying physics and math (seeking freedom beyond engineering's limits) to a brief stint in physics grad school, then foreign development, and finally Stanford Law.
- He highlights Stanford Law's flexibility, allowing him to explore diverse interests including design, business, and physics, which led him to discover crypto during its early emergence beyond cypherpunk circles.
- Ryan emphasizes crypto's unique appeal: "crypto I quickly realized was the only sort of subject or domain I'd ever discovered that allowed me to sort of engage like nerdy math interests and coding interests and economic interests and then like inevitably legal regulatory interests at the same time." This convergence hooked him, pulling him back from traditional law into the rapidly evolving crypto space.
- Jay Kurahashi-Sofue (COO, Eco): Brand Strategy Meets Crypto Infrastructure
- Jay discusses his background, including a significant role at Ogilvy as a Brand Strategist, working with Fortune 500 tech/fintech clients and early crypto players like Circle during their diverse business explorations (trading, OTC, Venmo competitor).
- He explains the role of a Brand Strategist as providing the core narrative glue for marketing, essential in the noisy crypto space often fixated on "faster, cheaper" rather than relatable value (saving time, making money).
- Jay notes that most crypto projects aren't yet ready for full-service agencies like Ogilvy, needing to validate niche markets first. He contrasts this with his experiences building infrastructure/DeFi at Avalanche and AirSwap, seeing Eco as a convergence of these experiences.
The Genesis of the Eco Partnership
- Jay recounts learning about Eco serendipitously through a former Avalanche colleague who had interacted with Eco's earlier marketing.
- A recruiter later connected Jay with Ryan, who pitched Eco's new direction focusing on stablecoins, interoperability, and infrastructure – areas Jay found compelling precisely because they were less discussed yet potentially highly valuable.
- They bonded over the challenge of defining Eco's brand strategy and cutting through market noise, iterating constantly to align with the dynamic industry and product shifts.
The Stablecoin Market: Growth and Fragmentation
- The conversation acknowledges the universal consensus on stablecoin growth, currently around a $220 billion market cap.
- Ryan frames the total addressable market (TAM) far beyond current figures, comparing it to M1/M2 money supply and noting the potential for non-dollar stablecoins. He defines stablecoins as simply a "different better digital dollar" on a superior ledger, offering benefits like cross-border/inter-bank liquidity, faster settlement, and 24/7 availability.
- A major untapped demand source identified is institutional capital and various B2B/wholesale/consumer payment flows, currently hindered by inadequate tooling and liquidity organization. Ryan sees the current $220B as a "pittance relative to what it's going to inevitably be."
- However, Ryan highlights the critical problem: fragmentation. New chains, rollups (Layer 2 scaling solutions processing transactions off the main chain for speed/cost), and stablecoins launch constantly, outpacing liquidity growth. This is compounded by redundant liquidity pools (e.g., dozens of USDC/USDT pools on the same chains) creating a "drastic mismatch between where is stable coin liquidity needed and in demand versus where is it actually sitting."
Eco's Solution: An Aggregated Stablecoin Liquidity Layer
- Eco is positioned as a platform or protocol designed specifically to aggregate and intelligently allocate stablecoin liquidity, addressing the fragmentation problem.
- Ryan uses the analogy of Airbnb or Uber: networking vast amounts of passive, unorganized capacity (idle stablecoins) and creating an efficient market structure for it.
- This layer aims to bridge the gap, incentivizing builders, chain ecosystems, and stablecoin issuers to share liquidity, which is then directed where needed, improving efficiency over the current manual, off-chain capital allocation for routes like cross-chain swaps.
- Strategic Insight: Eco views stablecoins as a practical, critical component of the interoperability (interop) solution – the ability for different blockchains to communicate and transact. Ryan argues, "people are underestimating just the practicality of stable coins being a critical part of the interop solution because I believe... most of their experience should be denominated in stablecoin." The goal is to enable seamless, stablecoin-native user experiences.
Defining the Liquidity Layer: More Than Just Another Chain
- Ryan clarifies Eco isn't a general-purpose chain but a specialized execution environment (a system where specific transactions/smart contracts run) acting as a central hub.
- Instead of fragmented pools on many chains, Eco aims to aggregate liquidity centrally, allowing it to flow dynamically to "spoke" chains based on demand (e.g., allocating liquidity to a newly launched chain experiencing high demand, then pulling it back).
- This central aggregation should lead to greater depth, tighter spreads, and better price discovery for stablecoins market-wide. Ryan suggests thinking of it as "what would curve build if curve built today?"
Communicating the Vision: B2B Focus, B2C Awareness
- Jay explains the primary target (B2B) is developers, enabling them to build superior stablecoin-native applications using Eco's infrastructure.
- For the broader market (B2C awareness), Jay draws a parallel to Plaid (middleware connecting bank accounts to apps). Users don't need to understand Plaid's complexity, they just see the logo and know their bank is supported.
- Similarly, users might see "Powered by Eco" and understand their stablecoins are accepted, abstracting away the underlying complexity of intents, bridging, etc. This brand recognition can create pull-through demand for developers to integrate Eco.
Crowd Liquidity: Activating Idle Capital
- "Crowd Liquidity" is Eco's core concept for activating passive stablecoins sitting idle in wallets, protocol treasuries, etc.
- It's not traditional LPing (Liquidity Providing) which often involves locking tokens and impermanent loss risk. Instead, users grant Eco permission to utilize their stablecoins across the network while they remain liquid and accessible, earning yield in return.
- Ryan describes it as "liquidity for the people by the people," accessible to both large treasuries and retail users with small balances.
- He draws a direct analogy to EigenLayer (an Ethereum protocol allowing staked ETH to be re-used for securing other networks): "You're holding stables anyway, put them here to participate in this marketplace for liquidity."
- Security & Verification: Ryan emphasizes that liquidity remains on-chain within the protocol, traceable dollar-for-dollar, and never custodied off-chain by Eco developers.
- Incentives: Yield for Crowd Liquidity participants comes from multiple sources: nominal transaction fees on stablecoin sends, fees from the pool solving cross-chain intents (user-defined transaction outcomes), and fees from solvers borrowing liquidity (via flash loans – uncollateralized loans repaid in the same transaction) to fill orders.
Go-To-Market Strategy: Building Supply and Demand
- Eco's GTM involves a "pre-deposit campaign" focused on Crowd Liquidity to build the supply side, attracting both sophisticated off-chain capital and retail users.
- Simultaneously, Eco is live in beta, processing volume through partnerships with platforms like Hyperlane and Caldera, ensuring native stablecoin liquidity is easily accessible for developers on connected chains.
- Jay elaborates on the marketing strategy: moving beyond "table stakes" (Twitter, Telegram, Content) to establish trust, optimize performing channels, and explore niche forums and content channels for more ground-up engagement. He hints at successful, currently undisclosed strategies.
Final Thoughts: Making Stablecoins Fun
- Ryan and Jay express excitement about building crucial tech in a growing market, aiming to bring creativity and fun to their GTM campaigns.
- They position Eco as a key project to follow for anyone interested in the "stablecoin meta," suggesting Eco's success in organizing liquidity is a proxy for the maturity and potential of the entire stablecoin market. Jay quips about the novelty: "This is for the first time someone has said that they want to make stable coins fun."
Conclusion
Eco is building foundational plumbing to organize the rapidly growing but chaotic stablecoin market. Its success in aggregating liquidity via Crowd Liquidity could significantly enhance cross-chain efficiency and user experience, impacting Crypto AI applications reliant on seamless value transfer. Investors and researchers should monitor Eco's partnership traction and liquidity growth as key indicators.
