TLDR:
- Reeve Collins, Tether’s co-founder and first CEO (2013-2015), is launching Pi Protocol, a new yield-bearing decentralized stablecoin project set to debut in late 2025 on Ethereum and Solana
- Pi Protocol’s stablecoin USP will be over-collateralized with assets including US Treasuries, money-market funds, and insurance products, with users able to mint tokens and earn yields
- The platform includes USI tokens and USPi NFTs that give holders governance rights and revenue sharing from platform activities
- This launch comes as Tether faces regulatory challenges, having exited the EU over MiCA regulations, while Pi Protocol aims to be compliant with transparent reserves
- The current stablecoin market shows USDT maintaining 63% dominance, setting a high barrier for new entrants
Reeve Collins, who co-founded Tether and served as its first CEO from 2013 to 2015, has announced the development of Pi Protocol, a new yield-bearing stablecoin project scheduled to launch in the second half of 2025.
The platform will introduce USP, a decentralized stablecoin that will be available on both Ethereum and Solana blockchains. Unlike traditional stablecoins, USP will offer users the ability to earn yields from their holdings through a system of over-collateralization.
Pi Protocol’s structure relies on smart contracts that accept various forms of collateral, including US Treasuries, money-market funds, and insurance products. This approach marks a departure from centralized stablecoin models, where the issuing company typically retains all yield benefits.
“We view Pi Protocol as the evolution of stablecoins,” Collins stated in a recent interview. “Tether has been extremely successful in showcasing demand for stablecoins. But they keep all the yield. We believe 10 years later, the market is really ready to evolve.”
The platform introduces multiple token types to create a comprehensive ecosystem. Users who mint USP will receive USI tokens as rewards, though specific details about these tokens remain undisclosed. Additionally, the protocol features USPi, a yield-bearing NFT that grants holders voting rights and a share of the platform’s revenue.
Governance rights extended to USPi holders will include decision-making power over risk parameters, collateral policies, and revenue distribution. The project has allocated 25% of the governance token supply to its team and advisors, with a pre-sale currently underway.
The timing of Pi Protocol’s launch coincides with increasing regulatory scrutiny in the stablecoin sector. Tether recently withdrew from the European Union due to MiCA regulations, and similar regulatory frameworks are expected in the United States.
Pi Protocol aims to position itself as a compliant alternative by maintaining transparent reserves and emphasizing Treasury bonds as collateral. This approach aligns with anticipated US regulatory requirements for stablecoin issuers.
Stablecoin Market
Recent market data shows stablecoins reaching record market capitalization, with Tether’s USDT maintaining 63% market dominance. This presents both an opportunity and challenge for Pi Protocol as it enters the market.
Robinhood CEO Vlad Tenev recently highlighted the importance of yield generation in stablecoins, noting that traditional bank deposits currently offer around 4% yield in the high-interest environment. This observation underscores the market gap Pi Protocol aims to fill.
The project faces competition from existing yield-bearing stablecoins like USDe, which initially offered a 30% annual percentage yield (APY) but has since adjusted to 6%. USDe has already achieved the position of third-largest stablecoin, surpassing DAI by approximately $1.5 billion.
Pi Protocol’s smart contract system will evaluate submitted collateral, with particular emphasis on Treasury bonds. This focus aims to ensure regulatory compliance while maintaining stability.
The project, while sharing a similar name, has no connection to the Pi Network, another well-known cryptocurrency project. This distinction may require clear communication to avoid market confusion.
Launch preparations are underway, with the project team focusing on technical development and security measures. No financial terms regarding the initial funding or token distribution have been publicly disclosed.
The stablecoin is expected to debut simultaneously on Ethereum and Solana networks, leveraging both platforms’ established user bases and technical capabilities.
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