pUSD: A Design for the Future
- pUSD: A Design for the Future
Stablecoins↗ are one of the most important intermediaries in the crypto world. They serve as intermediaries in the diverse crypto ecosystem, and because they are pegged to the value of fiat currencies, they also act as intermediaries between the crypto world and the traditional world. Given their unique importance, various designs of stablecoins have been developed.
pUSD, short for Pando USD, is a decentralized stablecoin pegged to the US dollar. It is based on the leaf protocol of Pando Protocols and is minted using collateralized native crypto assets. Since it is minted on the ERC20, it supports all Ethereum ecosystems and is highly versatile. At the same time, pUSD is the mainstream stablecoin for Pando DeFi↗ related applications and serves as a value hub for the Mixin network ecosystem.
Why pUSD Exists
A closer look at DeFi↗ reveals that the entire blockchain has created better financial tools. It has the potential to generate tremendous value through wider participation, a more diverse product range, and easier innovation involvement. Therefore, many innovations have been made in this direction.
Mixin↗ has created a decentralized transaction network that is compatible with numerous blockchain networks, offers zero-cost quick transactions, and ensures user privacy. It provides a new infrastructure for DeFi. Pando DeFi is becoming an important participant in DeFi, based on a series of Pando Protocols, offering a wide range of products and services, and has the potential to provide a new paradigm. The success of these innovations has resulted in a massive amount of value being stored in the entire network. Therefore, an excellent stablecoin can better activate these vast value assets, promoting transaction efficiency and product innovation through better intermediaries.
A native stablecoin within an ecosystem can better promote capital efficiency.
In addition, there are a variety of stablecoins on the market. However, most of them are collateralized by traditional assets and have a centralized entity as a guarantor. They provide a certain degree of safety and stability on the one hand, but on the other hand, they pose potential risks of traditional, centralized finance - making it challenging for them to support the architecture of a large decentralized financial system. Blockchain creators, believers, and idealists hope for a blockchain-native stablecoin: it should be entirely protocol-based, collateralized by blockchain native assets, and truly decentralized.
Hence, pUSD was introduced and carries unique value:
Firstly, it is issued based on ERC20, can circulate throughout the entire Ethereum ecosystem, possesses good versatility, and can serve as a general asset. It is the mainstream stablecoin for Pando DeFi. All Pando DeFi applications trade based on Mixin, therefore, it can provide a wealth of financial products, convenience, and high efficiency for a massive amount of assets. Finally, as a decentralized stablecoin minted by collateralizing blockchain native assets, it points towards a more exciting future. As a token running on the blockchain, pUSD possesses all the characteristics and advantages of blockchain. Every transaction is publicly available for inspection on the Mixin network.
The mechanism for minting and reducing pUSD
pUSD is a decentralized stablecoin on the Pando Leaf ↗ protocol, it is pegged 1:1 with the US dollar. The total supply of pUSD is 100 billion, of which 99.975 billion is locked in the Mixin Trusted Group, and the remaining 25 million can be minted through Pando Leaf. Users can mint pUSD by pledging crypto assets like Bitcoin and Ethereum.
Process of minting pUSD:
- Users pledge assets like BTC and ETH into the vault in Pando Leaf.
- According to the value of the pledged assets and the set collateral rate, users can mint a certain amount of pUSD. For example, pledging 1 BTC when the value of BTC is $30,000, at a collateral rate of 150%, the maximum amount of pUSD that can be minted is 20000 pieces.
- The minted pUSD will enter the user's wallet and can be used freely.
- The assets pledged in the vault cannot be withdrawn until the user repays the minted pUSD.
Process of reducing pUSD:
- Users can return the minted pUSD to the vault at any time, while also paying the accumulated stability fee.
- Once the pUSD is repaid, the pledged assets can be unlocked and withdrawn from the vault.
- The returned pUSD will be eliminated from circulation, reducing the total supply.
In this way, the issuance volume of pUSD will automatically adjust according to the ratio of collateral to minted volume, maintaining its 1:1 peg with the US dollar.
Liquidation procedures may occur when prices fluctuate rapidly or when users are unable to repay. For more detailed rules on liquidation and interest, you can refer to: Mint and pUSD ↗.
How to Obtain and Use pUSD
Each pUSD has a minting process, coupled with over-collateralization, making pUSD have good security and stability, giving it more opportunities to be applied to DeFi transactions and investments as an important intermediary token, making it a trustworthy and freely usable currency. Therefore, we hope to recommend pUSD to more people.
In the Pando DeFi ecosystem, there are four regular ways to get pUSD:
- Over-collateralize high-consensus crypto assets such as BTC and ETH in Pando Leaf ↗ to get pUSD. (Tip: Interest is needed to ensure stability.)
- Borrow pUSD by pledging BTC, ETH, and EOS in Pando Rings ↗. (Tip: Interest is needed to reward the lender.)
- Get pUSD through token-to-token transactions. Token-to-token transactions can be carried out under the Pando Swap ↗ protocol, and the Mixin ecosystem has a variety of trading systems to get pUSD.
- Purchase pUSD with fiat currency. The Tiga ↗ service in the Mixin ecosystem can purchase with fiat currency.
People are willing to pay interest to get pUSD mainly because it can participate in various financial behaviors to profit, but pUSD is also developing a variety of possibilities, with more and more uses:
- As an investment intermediary currency in the Mixin ecosystem, it participates in various investments and trading behaviors.
- In the Pando DeFi ecosystem, it serves as a stable intermediary for exchanges with other tokens, better evaluating investments and trading behaviors.
- There are many pUSD-involved trading pairs in the Pando DeFi system, which makes it easier to participate in market making and gain long-term benefits.
- Based on applications like Bazaar ↗, pUSD can participate in traditional world trading behaviors, and Mixpay ↗ is bringing pUSD to more trading scenarios.
Blockchain is facing its rapid development and the slow acceptance process of the general public, so stablecoins can play a long-term value in this process. As a blockchain-native stablecoin, pUSD can help a large volume of funds to fully and efficiently enjoy blockchain innovations and gain more value; it is also increasingly associating with the traditional world.
We expect pUSD to better help blockchainize this world, to be more transparent, decentralized, free, and efficient.
The information contained in this article is for informational purposes only and does not constitute financial, investment, or other professional advice. The views expressed in this article are those of the author and do not necessarily represent the views of the company or organization they work for or Pando. Any investment decisions made by the reader should be made after consulting with their own financial advisor and conducting their own research. The author and the company or organization they work for and Pando will not be liable for any financial losses incurred as a result of reliance on the information contained in this article.