The Pi Protocol will launch later this year on the Ethereum and Solana blockchains
Tether co-founder Reeve Collins is stepping back into the stablecoin market with a new decentralized project aimed at offering yield-producing digital assets. His latest venture, Pi Protocol, is set to launch later this year on the Ethereum and Solana blockchains, introducing a fresh competitor in the evolving stablecoin space.
Pi Protocol will introduce a new stablecoin called USP, which can be minted through smart contracts in exchange for USI, a token that generates yield. The backing for USP will reportedly come from bonds and other real-world assets, though specific details about its peg to the US dollar or other fiat currencies remain unclear.
Collins had previously hinted at the growing appeal of yield-bearing stablecoins, suggesting they could attract more investors looking to earn passive income on their holdings.
Collins was one of the original developers of Tether before selling it to Bitfinex in 2015. Since then, Tether’s USDt has become the dominant stablecoin, growing from under $1 billion to a market value of $142 billion. Despite its success, competition in the stablecoin market is increasing, with rivals such as Circle’s USD Coin, Ethena’s USDe, and Dai gaining traction.
According to DefiLlama, the stablecoin sector now exceeds $225 billion in circulation, with USDC showing faster growth than USDt early in 2024. Ethena’s USDe recently surpassed Dai to become the third-largest stable asset by market capitalization.
Stablecoins are essential in the crypto ecosystem, providing liquidity and efficiency for transactions. They have also gained popularity for cross-border payments, offering a cost-effective alternative to traditional financial networks. Recent data from ARK Invest revealed that stablecoin transactions hit $15.6 trillion in 2024, surpassing Visa and Mastercard in total volume.
