Traditional stablecoins have failed to live up to the promise of being a modern form of programmable money. Rather, they continue to bear the burdens of an archaic financial system: their reserves are consistently in doubt, they are vulnerable to periodic runs and they operate for the benefit of a handful of insiders.
But most importantly, they all fail to fulfil the second most important function of money serving as a true store of value - because they do not provide a native yield. While new contenders have emerged to address this issue, they essentially function as money-market funds, offering a yield pass-through.
We deserve better.
We set out to build Parabol as a modern, functional and resilient stablecoin protocol free from a complex web of dependencies, risks or gimmicks. Underpinning this are our three core principles:
Safety and Stability: Our stablecoins are backed by our Reserve Assets comprised solely of Treasury Bills held outright or via overnight repurchase agreements. Treasuries constitute the largest and most liquid government securities market globally, ensuring that we do not bear any liquidity risk. Investing in ultra-safe risk-free collateral also means we are not exposed to credit risk. We eliminate any additional counterparty risk by generating yield from the underlying collateral rather than by lending your tokens to a third party. Finally, Reserve Assets are maturity matched to the liabilities of the Protocol thereby eliminating the risk of a “bank run”.
Compliance and Accessibility: Parabol operates within existing regulatory frameworks and features institutional-grade safety measures. Our stablecoins are compliant with upcoming MiCA regulations and the yield mechanism is based on private law. This structure allows anyone in the world to interact with the Protocol permissionlessly, offering unparalleled access to financial freedom for everyone.
Superior Risk-Free Yield: Parabol allows savers to obtain superior risk-free yields in a simple, transparent and fair way through its Reserve Stability Pool. We achieve this by harnessing the power of the collective where the returns from liquidity-focused users are reallocated to savers. This means no matter how much any individual decides to save, all users get the same risk-free returns that are higher than what they individually can obtain.
So, why settle for less?
From onboarding Real-World Assets to facilitating hawalas in Emerging Markets, stablecoins are already playing a critical role in finance. We are clearly at the very early innings of a market which is projected to reach trillions of dollars.
However, beyond mere dollars and cents, we firmly believe in a future characterized by an inclusive, accessible, and open financial economy. That is why we are thrilled to be working on Parabol and help build towards this goal.
If you share our vision, we’d love to hear from you.
Early access to the Parabol Protocol is available via our website.
Collect this post on Base:
