The co-founder of Tether, Reeve Collins, is launching a new yield-bearing stablecoin.
It was revealed by Bloomberg, citing the DeFi Pi Protocol project.
Tether: the new stablecoin with yield
The new stablecoin will be called USP, and it will allow users to obtain returns guaranteed by bonds and other real-world assets.
Despite this, the project claims to be decentralized.
Pi Protocol will be launched on the blockchains of Ethereum and Solana by the end of the year. It is a Defi project that includes yield farming for NFT and “Circles”, but also offers the possibility to obtain unique NFTs, both through the pools and through PI Treasure Hunt.
Additionally, it is equipped with an NFT DEX, PIPX, which allows users to create their own vaults to enable NFT trading.
Currently, it does not yet have its own stablecoin, and this is why they are working on the creation of USP.
Pi Protocol will use specific smart contracts to allow the minting of the USP stablecoin tokens in exchange for the yield-bearing USI token. According to Bloomberg, the stablecoin should be backed by bonds and other real-world assets.
The co-founder of Tether
Reeve Collins, in addition to being co-founder of Pi Protocol, was also one of the co-founders of Tether.
Tether was founded in 2014 by Reeve Collins, Brock Pierce, and Craig Sellars under the name “Realcoin”. Collins was also the CEO.
In 2015, control passed to the crypto exchange Bitfinex, founded in 2012 by Raphael Nicolle, before coming under the control of Giancarlo Devasini and JL van der Velde, along with Paolo Ardoino.
Once he left Tether, Collins co-founded another blockchain company, BLOCKv, with which he raised 22 million dollars through an ICO to create a platform for NFTs. He was the CEO of BLOCKv until 2018.
In 2019, he then co-founded a Web3 platform, SmartMedia Technologies, which uses blockchain for adtech and works for several major brands.
The stablecoin
By now, on the crypto markets, many stablecoins are circulating, with a total market capitalization exceeding 225 billion dollars.
Of these, however, in reality, 63% is represented by USDT of Tether alone, which therefore capitalizes almost twice as much as all the other stablecoins combined.
Just consider that the second in this ranking, USDC, capitalizes 56 billion against the 142 of USDT. The third, USDE of Ethena, is far behind, at only 6 billion dollars.
The fact is that just as US dollars (USD) dominate traditional financial markets, USDT practically plays the same role in the crypto markets, although in Europe USDC is gaining more traction because, unlike USDT, it complies with the new EU crypto regulation.
Of the new USP, however, so little is known that for now it can still be considered just an idea, although the NFT platform of Pi Protocol already exists and the new stablecoin apparently seems to be already in development.
The returns
The stablecoins in dollars, like USDT, do indeed produce returns.
For example, Tether invests the USD it receives for the issuance of USDT in U.S. Treasury bills that yield about 4.5% per year.
The fact is that Tether keeps all these returns for itself, and since it owns more than 110 billion dollars in T-bonds, it is cashing in several billion dollars a year practically without doing anything other than keeping USDT active, pegged, and functioning.
For some time now, in light of these returns, there has been talk of a possible sharing of parts of them with the token holders, but it should be remembered that these are not fixed returns.
The reason why T-bonds yield so much is that the US central bank has significantly raised the reference rates in recent years, but these are bound to fall, sooner or later.
For example, in the case where over the next two or three years they are halved, imagining a 50% sharing of returns, a holder of USDT could end up receiving only a little more than 1% per year, which is much less than they would receive by putting them in earn on other crypto platforms.