Reeve Collins, one of many unique architects behind Tether USD (USDT), is backing a brand new yield-bearing stablecoin venture known as Pi Protocol.
Collins co-founded Tether alongside Brock Pierce and Craig Sellars and served as its first CEO from 2013 to 2015.
In accordance with a Bloomberg Information report, the decentralized stablecoin will launch within the second half of 2025 and can initially be out there on Ethereum and Solana.
USP is Pi Protocol’s stablecoin, which is minted utilizing sensible contracts. The stablecoin shall be over-collateralized with property reminiscent of US Treasuries, money-market funds, and insurance coverage merchandise.
Collins mentioned in an interview:
“We view Pi Protocol because the evolution of stablecoins. Tether has been extraordinarily profitable in showcasing demand for stablecoins. However they hold all of the yield. We consider 10 years later, the market is actually able to evolve.”
He added that Pi Protocol goals to capitalize on the increasing stablecoin market and the rising function of real-world property in crypto.
Moreover, minting USP will reward customers with one other token, the USI, whose particulars weren’t disclosed.
The venture’s official web site additionally mentions USPi, a yield-bearing non-fungible token (NFT). Holders will obtain a share of the platform’s income, which comes from numerous sources, together with yield from stablecoin minting.
USPi holders may also have decision-making energy and can vote on danger parameters, collateral insurance policies, and income distribution. Pi’s staff and advisors have been allotted 25% of the governance token provide, with a pre-sale underway.
Significance of yield-bearing stablecoins
Vlad Tenev, CEO of Robinhood, not too long ago warned throughout a Bloomberg TV interview that stablecoins should provide yield-accrual alternate options to compete with different strategies of holding and transacting {dollars}.
He added that though money deposited in banks can accrue a 4% yield in a high-interest setting, providing this yield by stablecoins shouldn’t be easy.
USDe provided holders an almost 30% annual proportion yield (APY), however its dynamic rebalancing decreased the yield to six% as of press time. Ethena Labs’ stablecoin is the third-largest out there, surpassing veteran DAI by roughly $1.5 billion.
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