According to MarginFi, Solana’s first major decentralized stablecoin will be XBY.
MarginFi, the DeFi protocol ranked sixth on Solana by TVL, has declared its intention to introduce XBY, a decentralized stablecoin that accrues yield, this month.
The co-founder of MarginFi, MacBrennan Peet, said at the Solana Crossroads 2024 conference that his team is now finishing up the second audit for XBY and plans to deploy the stablecoin before June.
According to Peet, SOL-based liquid staking techniques (LSTs) would collateralize XBY in full. This will provide Solana a decentralized stablecoin that may reduce the network’s need on USDC, the second-largest centralized stablecoin.
Overall, Solana DeFi is currently dependent on USDC, according to Peet. Since USDC is a key component in all major trading pairs, Solana DeFi would have significant difficulties if USDC maintained its depreciation from a year ago.
Additionally, he said that the initiative has received around $12 million in committed liquidity and aims to raise over $100 million before it launches.
Edgar Pavlovsky, co-founder and CEO of MarginFi, withdrew from the project unexpectedly one month ago, and now word of XBY’s imminent debut has spread. Despite early users already earning points—which normally qualify holders for future airdrops—the change seemed to be a consequence of an apparent debate over whether the project should issue a governance token.
In reaction to Pavlovsky’s resignation, many MarginFi customers hastily withdrew their assets from the protocol. In a matter of days, over $300 million, or over half of MarginFi’s TVL, left the system.
On the other hand, according to Peet, Pavlovsky stepped down as CEO because of the stress he was under, not because of disagreements over whether the project will issue a token.
The token was the only point of contention, according to Peet. “Developing an on-chain financial protocol is a full-time job; there are no weekends.”
Peet has also revealed that MarginFi is secretly developing its governance token and plans to announce it in the future.
The idea of MarginFi was to create a decentralized system using a token, according to Peet. Tokens released for tokens’ sake aren’t something the Margin Foundation is very enthusiastic about. Tokens with inherent genuine governance weight and meaningful content are of interest to us.
The massive withdrawals were really rigors “stress-testing” for MarginFi, according to Peet, who also mentioned that the protocol was running properly despite the load.
Users should expect their XBY balances to grow in tandem with the token’s payout since XBY is a rebasing stablecoin.
Token holders will first receive XBY from staking incentives made possible by the LST collateral, and later on, they will also be eligible to collect MarginFi lending returns. Upon the protocol’s launch, Peet said, “hundreds of millions of dollars in LSTs” from MarginFi users would be available as collateral for the minting of XBY.
Also Read: JPMorgan Onyx industrializes Project Guardian blockchain PoCs
Wallets