ARK Invest researchers commented on OpenUSD: Essentially similar to early DAOs, competitor alliances face multiple obstacles

ARK Invest Research Director Lorenzo Valente commented on the OpenUSD stablecoin project launched by several institutions. He stated that, despite the strong capabilities of the participants (including Visa, Stripe, Mastercard, BlackRock, Coinbase, etc.), OpenUSD faces multiple significant obstacles:

• First, there are liquidity and cold start issues; USDC and USDT have already formed strong network effects, dominating exchanges, payment processors, and brokers, making it difficult for the new stablecoin to gain trading pairs and large-scale holding willingness;
• Second, the decision-making speed of the alliance composed of 500 competitors will be extremely slow, lacking successful precedents, and conflicts of interest will be hard to coordinate;
• Third, the regulatory and antitrust risks are extremely high; the joint issuance of currency by large banks and card networks is likely to become a regulatory focus;
• Fourth, the revenue-sharing model results in issuers retaining too little capital, making it difficult to cover high operational and promotional expenses;
• Fifth, the actual commitments from partners are limited, mostly consisting of letters of intent (LOI), and parties are still supporting competitors, preferring multiple hedges rather than exclusive binding.

Valente concluded that OpenUSD is essentially similar to "a DAO of multiple competitors," making it difficult to execute and make decisions quickly, and it may ultimately repeat the governance failures of early DAO projects, which could not be effectively implemented.

Affected by the OpenUSD plan, Circle's stock fell over 17% in a single day, and ARK Invest took the opportunity to buy in.