Reeve Collins, co-founder of Tether, announced the launch of Pi Protocol, a decentralized stablecoin project set to launch on Ethereum and Solana later this year.
What is Pi Protocol?
Pi Protocol is a self-proclaimed decentralized stablecoin project that will allow users to mint their own stablecoins by providing collateral through smart contracts. The project's two key tokens are 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. The governance structure will revolve around USPi, a governance and yield-bearing NFT. USPi holders can earn revenue from the platform, vote on risk parameters, and influence the protocol's direction.
Can Pi Protocol Challenge Tether?
Despite its potential advantages, Pi Protocol faces significant competition. Tether remains the largest stablecoin with a market cap of $141 billion and dominates over 63% of the market. Financial players like BlackRock are betting on programmable dollars as the next phase of financial innovation. However, Pi Protocol aims to fill the gap by offering yields that compete with traditional banking deposits in a high-interest environment.
Despite existing challenges and competition, Pi Protocol may attract attention due to its decentralization and yield. The project is expected to begin its rollout in the second half of 2025.
