1/ Last month I explained how every USDp CDP on @polarisfnd acts like a virtual USDp/pETH LP, and how that can create a deep onchain ETH/USD route. The same architecture has a much bigger endgame: A universal liquidity hub for onchain forex.

What is actually the most interesting about the pETH bonding curve is this curve carries the same properties over all sizes of TVL This means that once the curve has a a couple of hundred million in TVL it actually becomes one of the most liquid and least volatile ETH liquidity venues During market stress it will have far more depth and likely less volatility than LSTs that rely on the backlog of the exit queue and onchain liquidity pools This actually makes pETH extremely stable collateral with an extremely liquid market for large orders to be facilitated both ways with very little price impact Now at billions in TVL this becomes an enormous ship sailing through the ocean during rough seas hardly moving at all

These are all really good questions and for some reason I never got a notification of your reply above. I will answer below but if you want to dig deeper feel free to dm me and we can discuss there for ease of communication The bonding curve will be using a beta of 0.15. To put this into perspective beta of 0 means pETH trades lock step with ETH with no additional volatility. With a beta of 0.15 each doubling of the ETH denominated TVL results in a 10% price move of ETH/pETH. This means that if the curve has 5,000 ETH, for pETH to increase 10% in price the curve must consume another 5,380 ETH. This is true across all sizes of the curve. So if there is 50,000 ETH in the bonding curve, an additional 53,800 ETH need to move the pETH price 10% higher. Now thinking of a whale manipulating the pETH price hunting minters. Assuming the figures on the current testnet bonding curve a whale would need to sell 28.96% of the ENTIRE pETH supply to move the price down 5%. They are also required to buy this pETH to begin with, which will push the dynamic swap fee up to its 1% upper bound, pushing pETH yield to pAsset minters as they do it (they also make their pETH worth more as they buy). Then as they sell they hit the 1% fee bound on the sell and continue to drive yield to pAsset minters from the selling. Roughly the pETH price is impacted 88% by the ETH/USD price and then 12% by the bonding curve inflow/outflow. Using just ETH as the collateral token has been tried before, by both Maker (DAI) and Liquity (LUSD). It has also been attempted many times to use LST's as collateral and all have failed to reach any meaningful scale due to inherent issues with using ETH and LST's as collateral. They are not scalable and they rely on borrowers to continually increase demand by borrowing. There is no way to tie demand for the stablecoin to its growth without borrowers continuing to borrow. What pETH enables is: - Scalable collateral that grows with adoption of the protocol and becomes safer over time - Allows for the first ever decentralised ETH based PSM that allows for permissionless minting and redemptions for peg stability - First ever peg driven dynamic interest rate for a stablecoin - A low risk passive ETH yield from the floor price represented as fpETH that will be a genuine alternative to ETH staking - The ability to over collateralise low yielding tokens such as gold - The ability to offer negative interest rates due to the ability to incentivise asset minters in pETH on their collateral - Many, many other unlocks For us, the risk of a slight volatility vs ETH is well and truely worth the reward for all users of the protocol...including minters

Testnet is important for us to test the code and trial some launch configurations It will not be incentivised nor will there be an airdrop However using it will give you alpha on how to best utilise the real incentives that flow come mainnet

fpETH Reserve Loan image is live in the docs I suggest figuring this one out anon 2.8x non-liquidatable leverage on a yield bearing collateral is something to pay attention to

Raising in a bear market was one of the toughest things I’ve ever done Sleepless nights, hundreds of calls and tears went into ensuring the world will get to see Polaris Thank you to all the angels who backed us

Update on the USDp minter experiment pETH collateral: Increased by 0.3751E USDp debt: decreased by 20k USDP Overall protocol P&L = 23k USDp or +41.5% You might ask how did my collateral increase & debt decrease This is what @polarisfnd minting & redemption unlocks

While all my group chats are chasing ohm forks on RH chain im building looping calculators for non-liquidatable reserve loans Boys this is gonna cook 3,3 might actually be back...and sustainable this time

1/ A little-known feature of @polarisfnd: Because anyone can permissionlessly issue or redeem USDp against pETH through the PSM, every USDp CDP effectively behaves like a virtual USDp/pETH liquidity position.