Stablecoin Adoption Beyond the Numbers: Why Automation Isn’t the Problem

🔑 Key Takeaways

• Stablecoin adoption isn’t about raw volume — it’s about design. Most DeFi activity is automated by default, powering liquidity, peg stability, and system resilience across decentralized markets.

  
  

• Automation isn’t a distortion — it’s infrastructure. Bots rebalance AMMs, execute liquidations, and maintain stablecoin pegs. In DeFi, code runs the system — visibly, verifiably, and at scale.

  
  

• TradFi automates just as heavily — but behind closed doors. SEPA direct debits, algorithmic trading, and fraud detection are all bot-driven. DeFi simply exposes that automation for all to see.

  
  

• Stablecoins do more than move money. In DeFi, they’re liquidity engines — powering lending markets, derivatives, and cross-chain coordination far beyond traditional retail use cases.

  
  

• Comparing DeFi and Visa misses the point. One is built for consumer swipes. The other is programmable infrastructure. The metric isn’t just volume — it’s composability, uptime, and resilience.

  
  

• Institutions can’t afford to sit out. Stablecoin rails are already settling trillions — with instant finality and programmable logic. The question isn’t if they matter. It’s when you’ll integrate.

Introduction – DeFi Isn’t Here to Copy Visa

Over 90% of stablecoin volume, according to Visa’s own research, is generated by bots and smart contracts rather than human users. The implication? That stablecoin adoption is inflated — or worse, irrelevant.

But that reading oversimplifies what’s actually happening.

Stablecoins weren’t designed to rival Visa at the checkout terminal. They’re not a cleaner payments layer — they’re the backbone of a programmable financial system. In decentralized finance (DeFi), value moves differently: between protocols, through automated agents, across chains — all in real time.

And yes, bots are everywhere. But here’s the difference — in DeFi, automation is visible, in traditional finance, it’s buried behind corporate infrastructure:

• Visa’s fraud monitoring? Algorithmic.

• Recurring payments and settlements? Automated.

• Trading desks and liquidity management? Handled by code.

  
  

The real distinction isn’t bots vs. humans — it’s transparency vs. opacity.

This post moves beyond the surface debate to ask a more strategic question:

How should we measure stablecoin adoption in a system that was never built to look like TradFi?

We’ll break down:

• What DeFi actually is — and how automation powers it

• Why automation in TradFi isn’t new — it’s just hidden

• Why comparing transaction volume across these systems often misses the point

• What DeFi still needs to fix — from UX to MEV

• And why this isn’t a story about volume dominance, but about financial design intent

  
  

Because in the end, adoption isn’t about counting swipes. It’s about building infrastructure that works — under pressure, in the open, at scale.

What Is DeFi – And Why Automation Is at Its Core

Decentralized finance (DeFi) is often framed as an “alternative” to traditional finance. That’s true — but it undersells the shift underway. DeFi isn’t just recreating finance on blockchain rails. It’s re-architecting the system itself, where financial functions like trading, lending, and payments are handled by code — not intermediaries.

And in DeFi, automation isn’t a feature. It’s the core infrastructure.

Why bots aren’t a bug — they’re the system

In DeFi, automation doesn’t sit quietly in the background. It runs the entire machine:

• Trades on decentralized exchanges (DEXs) are routed, arbitraged, and executed by bots — especially MEV bots that profit from price movements between blocks. This isn’t manipulation — it’s liquidity provision. On platforms like Uniswap, bots facilitate the majority of trading activity, ensuring constant price alignment.

  
  

• Lending protocols like Aave and MakerDAO rely on liquidation bots to maintain solvency. When volatile markets threaten collateral positions, these bots step in — not out of opportunism, but to protect the system’s integrity. In Q3 2023 alone, Aave recorded over 12,000 automated liquidations, totaling $78M in recovered assets.

  
  

• Stablecoin pegs are maintained by autonomous agents like Keepers on MakerDAO. These bots rebalance supply and demand, place bids in auctions, and keep assets like DAI close to their intended peg — all without manual oversight.

  
  
  
  

  

  
  

This isn’t artificial inflation. It’s structural automation — programmatic behavior that keeps the system functional, stable, and liquid.

If you want a deeper breakdown of how different types of stablecoins work (and programmable money comes into play), we’ve covered that in detail in our previous post: Stablecoins Under the Hood – What Keeps Them Stable (or Not).

It’s a solid foundation for understanding why stablecoins don’t just differ by design — they differ in risk, resilience, and regulatory exposure.

TradFi automates too — but you don’t see it

Critics often frame DeFi volume as “inorganic” because so much of it is automated. But the irony? Traditional finance runs on automation too — it’s just better disguised.

Think about it:

• Your Netflix subscription? That’s a bot charging your card monthly.

• Your SEPA direct debit for rent or utilities? Initiated by a bot.

• Student loan repayments, payroll tax deductions, standing instructions — all automated processes, triggered without your involvement each time.

  
  

These aren’t “human-initiated” transactions in the moment. They’re pre-authorized machine-to-machine operations — the same dynamic DeFi is criticized for. The only difference? In TradFi, you don’t see it happening.

Visa’s own systems settle trillions per year through automated routing and fraud checks — yet that volume is still considered “organic.”

This is where the narrative breaks.

In DeFi, automation is transparent — every transaction is recorded, every interaction auditable. In TradFi, automation is opaque — buried behind compliance frameworks, internal APIs, and closed systems.

So the real difference isn’t whether bots are involved. It’s whether you’re allowed to see them work.

The Blurred Line Between DeFi and TradFi

It’s tempting to draw a clean line between DeFi and traditional finance. One is permissionless, transparent, open-source. The other is regulated, closed, institutional.

But reality isn’t that binary — and the line between them is already fading.

TradFi is integrating DeFi infrastructure

The most telling signal? Traditional players aren’t just observing DeFi — they’re integrating it.

• Visa is actively testing stablecoin-based settlement using USDC on Ethereum and Solana, bypassing SWIFT and reducing settlement times from days to seconds​.

  
  

• Mastercard is piloting on-chain transaction messaging to increase transparency and auditability.

  
  

• Jump Trading — one of the largest HFT firms in TradFi — has become a major liquidity provider across DeFi protocols.

  
  

• Circle, issuer of USDC, has forged partnerships with BlackRock, BNY Mellon, and other major financial institutions to bridge fiat and on-chain value.

  
  

These aren’t symbolic gestures. They’re infrastructure experiments — early attempts to combine the efficiency and transparency of DeFi with the scale and trust of TradFi.

DeFi is adopting TradFi tools too

At the same time, DeFi isn’t trying to exist in a vacuum.

• Many stablecoin protocols incorporate real-world assets (RWAs) like U.S. Treasuries into their collateral base.

  
  

• Platforms like MakerDAO, Aave, and Compound are launching permissioned pools for KYC-compliant institutional activity.

  
  

• Onboarding providers are building fiat gateways and AML layers, bringing TradFi standards into on-chain environments.

This isn’t convergence by accident. It’s happening because both systems recognize a common goal: faster, safer, more flexible finance.

What they’re converging toward

This convergence doesn’t mean the systems are identical. Their design goals remain fundamentally different:

• TradFi is built for scale, legal compliance, and consumer protection — but often at the cost of speed, flexibility, and transparency.

• DeFi is built for programmability, openness, and censorship resistance — but it struggles with usability, predictability, and regulatory fit.

As the two move closer, the challenge isn’t choosing sides. It’s understanding what each is optimized for — and where the overlap creates opportunity.

The Organic Volume Illusion

Visa’s report made headlines with a striking statistic: 90% of stablecoin volume is “inorganic.” Defined by their methodology, this refers to activity not initiated by distinct human actors — often involving bots, smart contracts, or inter-protocol flows.

To their credit, Visa has been transparent about how they calculate this figure, publishing a detailed framework to explain what qualifies as “organic.” But the broader issue isn’t whether the definition is disclosed — it’s how that definition shapes the narrative.

Traditional finance automates too — just out of sight

Much of Visa’s “organic” volume stems from transactions you authorize once, then forget:

• Recurring subscription payments — Netflix, Spotify, enterprise SaaS

• Installment plans or scheduled repayments

• Automatic credit card bill payments

  
  

These aren’t human-triggered in the moment — they’re system-driven. But they still count as “organic,” because they’re linked to end-user intent.

Meanwhile, DeFi volumes are criticized precisely because they show their automation.

A liquidation bot maintaining solvency on Aave? Not organic.

An arbitrage bot equalizing prices across DEXs? Not organic.

A Keeper rebalancing a stablecoin peg? Still not organic.

And yet — all of these functions are essential. They’re not artificial inflation. They’re structural integrity.

DeFi gets penalized for transparency. TradFi gets praised for volume — even when its automation hides in the backend.

Definitions matter — but so do incentives

Visa’s definition is available. But its application reinforces a familiar bias: that financial activity must look like card swipes or manual input to be valid.

What it overlooks is that:

• DeFi is designed for automation — it’s not a glitch, it’s the architecture

• Bots are maintaining market efficiency, not faking engagement

• The infrastructure is public, verifiable, and audit-friendly

  
  

So yes — we can and should interrogate stablecoin volume critically. But we also need to ask: What counts as “real” activity? And who gets to decide?

The Problems DeFi Still Has to Solve

Let’s be clear: transparency doesn’t mean perfection. While DeFi offers a radically different financial model — open, programmable, censorship-resistant — it still has critical pain points that block wider adoption.

User experience is still miles behind

For most people outside crypto, using DeFi feels like assembling a server rack without instructions.

• Wallets are complex and insecure by default

• Gas fees fluctuate with no warning

• Interfaces vary wildly across platforms

• Mistakes can be irreversible — and costly

  
  

Even crypto-native users often stick to centralized exchanges (CEXs) for convenience. Until DeFi becomes as intuitive as mobile banking, its adoption ceiling remains limited.

MEV is an ongoing vulnerability

Maximal Extractable Value (MEV) — allows sophisticated actors to reorder, insert, or censor transactions before they are included in a block (it's a huge oversimplification, but we are sticking with it). This isn’t theoretical. It’s a daily phenomenon.

• Sandwich attacks front-run your swaps and drain value

• Liquidations can be gamed for profit

• Bots can pay higher gas to skip the queue

While some MEV is structural (e.g. for liquidations), much of it is predatory by design. The ecosystem is working on solutions — like MEV smoothing, block auctions, and encrypted mempools — but they’re not widely adopted yet.

Regulatory friction isn’t going away

Jurisdictions vary. Compliance rules change. On-chain protocols can’t geo-fence users. This creates real tension between the decentralized design of DeFi and the national frameworks that regulate finance.

Some platforms are building permissioned pools or regulated front-ends, but the question remains:

Can you stay truly decentralized while complying with fragmented global regulation?

Liquidity fragmentation and bridge risk

Assets exist across multiple chains. Moving them often involves token bridges — a frequent attack vector in DeFi’s short history. Billions have been lost to exploited bridges, undermining trust and breaking composability.

Until native multi-chain support becomes frictionless and secure, liquidity will remain siloed, and risks will stay high.

Stablecoin Adoption: Why Raw Volume Isn’t the Metric That Matters

The stablecoin debate often defaults to one metric: volume.

Who moves more value? Who settles more transactions? Can stablecoins "catch up" to Visa’s $12 trillion annual throughput?

But this entire framing misses the point.

Stablecoins — especially in DeFi — aren’t designed to mimic Visa. They're part of a fundamentally different system. One that’s not built around consumer payments — but around programmable liquidity, market integrity, and automated financial coordination.

DeFi is a full-stack financial infrastructure

Comparing stablecoin volume to card networks is like comparing shipping containers to shopping bags. The purpose, architecture, and participants are different.

Stablecoins in DeFi are not just used for:

• Payments

• Remittances

• Cross-border treasury

  
  

They’re also used as infrastructure components in:

• Liquidity pools

• Algorithmic rebalancing

• Decentralized exchanges (AMMs)

• On-chain derivatives and lending markets

• Rehypothecation and recursive yield strategies

  
  

Each of these layers depends on stable, automated value transfer — not on traditional consumer spending patterns.

So yes, the volume is high. But that’s because the system itself is high-frequency, high-function, and built for automation.

A paradigm shift in what we measure

Raw transaction volume tells us how much is moving. But it tells us nothing about:

• Who controls the flow

• How settlement happens

• Whether the system is transparent and auditable

• How it performs under stress

  
  

We saw in 2022 how fragile centralized systems can be — FTX collapsed while appearing solvent. Celsius melted down while promising yield. None of those platforms were DeFi — they were opaque hybrids.

For those navigating the regulated side of stablecoin infrastructure, MiCA changes everything.We’ve mapped out what it means — and what to do about it — in our deep dive: EU Crypto Regulation: VASP Market Evolution and the MiCA Compliance Deadline

In DeFi, stress is visible. Liquidations happen in real time. Pegs break publicly. Code executes — or fails — out in the open.

That’s the shift. From trusting reports to trusting systems. From quarterly audits to block-by-block truth.

Volume is just a side effect.

A Call for Smarter Questions

We don’t need more headlines arguing whether DeFi volume is “real.” We need better questions:

• Can the system function without gatekeepers?

• Can the rules be verified, not just promised?

• Does it keep working when markets are under stress?

• Can it integrate — not imitate — traditional finance?

Because while critics focus on “bot-driven activity,” stablecoins are already settling trillions with code, not call centers. They enable 24/7 liquidity, instant settlement, and programmable asset control — not on paper, but on-chain.

And no — DeFi isn’t perfect. UX is still clunky. MEV still distorts outcomes. Regulatory clarity is still evolving. But the foundational shift is already happening — in the open, in production, and at scale.

Stablecoins aren't the endgame — they're the new foundation

We’re not comparing old and new. We’re witnessing a transition — from institution-led systems to infrastructure-first finance. Stablecoins aren’t trying to beat Visa. They’re redefining the rails beneath the system itself.

This shift isn’t theoretical. It’s live, operational, and scaling fast.

If you’re still watching from the sidelines, the real question isn’t whether DeFi infrastructure will matter — it’s how long you can afford to wait.

At ASD Labs, we work with companies, investors, and fintech teams who are ready to move from custody to utility — turning idle capital into programmable tools for growth.

Whether you're dealing with:

• Capital sitting in custody without purpose

• B2B payments that still take days to settle

• Uncertainty about which protocols are secure or scalable

  
  

We help you build a clear strategy — one grounded in working infrastructure, not market noise.

Let’s build systems that don’t just follow the future — they enable it.

What’s next?

Volume still matters — but context matters more.

In a system built on transparency, programmability, and 24/7 uptime, volume is just one signal among many.

The smarter question isn’t how much is moving — it’s why it’s moving, how it’s secured, and who controls the rails beneath it.

And if you’re ready to move beyond headlines — and into infrastructure — let’s build.