Tether co-founder Reeve Collins is set to launch Pi Protocol, aiming to offer a more decentralized and yield-bearing alternative to USDT.
What Is Pi Protocol?
Pi Protocol is a self-proclaimed decentralized stablecoin project launching on Ethereum and Solana later this year. Unlike Tether, Pi Protocol will allow users to mint their own stablecoins by submitting collateral via smart contracts. The project introduces two key tokens: USP, the main stablecoin, and USI, a yield-bearing token received in exchange for minting USP.
How Will Pi Protocol Work?
Pi Protocol will use tokenized real-world assets (RWAs) to generate yield for stablecoin holders. The governance structure will revolve around USPi, a governance and yield-bearing NFT. USPi holders will earn a share of the platform’s revenue, vote on key risk parameters and collateral policies, and influence the protocol’s overall direction. The project launches amid tightening stablecoin regulations, especially in the U.S. and EU.
Can Pi Protocol Challenge Tether?
Despite its potential advantages, Pi Protocol faces significant competition. Tether remains the largest stablecoin, with a $141 billion market cap and a 63% market dominance. Moreover, Tether’s deep liquidity and established network effects make it the most traded digital asset in crypto. Vlad Tenev, CEO of Robinhood, notes that stablecoins must offer yield to compete with traditional banking deposits, which currently earn around 4% in a high-interest environment. This is precisely the gap Pi Protocol seeks to fill.
Pi Protocol's USP stablecoin is projected to launch on Ethereum and Solana by the second half of 2025. The project faces challenges like brand confusion, yet Reeve Collins’ reputation as a Tether co-founder adds credibility.
