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My assumption is that the stable coins are constantly illiquid and therefore it doesn't really matter how much is created because they're not used outside of DEFI itself. This means, they just bubble up the market and prove financial utility without getting really tested considering their legitimacy.

That's a fair assumption.

The thing is, we must create lending...true lending in crypto...wide spread. I am talking home loans 30 year mortgages, business loans. Only then stables will be stable.

Wouldn't that mean we have vast loans leaving the crypto space via the FIAT exchanges to buy building materials and pay for construction work?

We might need to get domestic exchanges of goods up first. I'd run a Hive/HBD-based webshop sooner than later. The dream would be a WooCommerce plugin and run with that.

Maybe start with selling PIZZA for Hive, that seems about right for the space :D