Reeve Collins, a co-founder of Tether, aims to create a more decentralized and yield-bearing stablecoin alternative through his new project, Pi Protocol.
What Is Pi Protocol?
Pi Protocol is a self-proclaimed decentralized stablecoin project that will launch on Ethereum and Solana later this year. Unlike Tether, which monopolizes the minting process, 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 such as U.S. Treasuries to generate yield for stablecoin holders. This model aligns with emerging competitors like Ethena’s sUSDe and Mountain Protocol’s USDM. 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. Pi Protocol is launching at a time when stablecoin regulations are tightening, particularly in the U.S. and EU, potentially giving an advantage to its compliance-first approach.
Can Pi Protocol Challenge Tether’s Dominance?
Despite its potential advantages, Pi Protocol faces significant challenges. Tether remains the largest stablecoin with a $141 billion market cap and dominance over 63% of the stablecoin market. Its deep liquidity and established network effects make it the most traded digital asset in the crypto space. Major financial players, including BlackRock, are betting on programmable dollars as the next phase of financial innovation, while the IMF suggests that stablecoins may reinforce the U.S. dollar’s global dominance.
Led by Reeve Collins, Pi Protocol seeks to reshape the stablecoin market by offering a decentralized and yield-bearing alternative to existing solutions like Tether. The project's success will hinge on its ability to navigate the complex regulatory landscape and compete with established players.
