MIR-42┃Add pyUSD as PAR collateral on Ethereum

Summary:

This proposal aims to add pyUSD as PAR collateral on Ethereum.

Rationale:

PayPal USD is a stablecoin that’s fully backed by US dollar deposits, US treasuries, and similar cash equivalents. You can buy and sell 1 PYUSD for 1 USD on PayPal.

PayPal USD is issued by Paxos Trust Company, LLC (Paxos). PayPal and Paxos are committed to ensuring the public availability of reports on the PayPal USD reserve assets. To that end, Paxos monthly self-reports the composition of the reserve asset portfolio after each month’s end, and monthly attestation reports are also issued by an independent third-party accounting firm. These monthly reports can be found on Paxos’ PayPal USD Transparency page.

Here’s the documentation about pyUSD.

Project Presentation:

Protocol name : PayPal USD

Token requested : pyUSD

Token contract address : 0x6c3ea9036406852006290770bedfcaba0e23a0e8

Audit(s) links : https://github.com/paxosglobal/pyusd-contract/blob/master/audit-reports/Trail_of_Bits_Audit_Report.pdf

Chain requested : Ethereum

Relation with the project : none.

Website: https://www.paypal.com/us/digital-wallet/manage-money/crypto/pyusd

Github: https://github.com/paxosglobal/pyusd-contract

Twitter:

• Paxos: https://twitter.com/Paxos
• PayPal: https://twitter.com/PayPal

Token metrics & Risk assessment:

• Smart Contract risk: C+

The pyUSD has been audited by Trail Of Bits. There are admin functions, but as USDP, the admin/issuer is Paxos, which is a regulated entity. There are currently 5k holders on Ethereum.

• Counterparty risk: B

pyUSD is a USD-pegged stablecoin minted through Paxos. While it’s still young, it has grown to a circulating supply of over $300M with good peg resilience. There are currently 40k transactions on Ethereum.

• Market Risk: C

pyUSD has a market capitalization of approximately $301M. The average daily trading volume, encompassing both CeFi and DeFi, amounted to $15 million. We consider the market capitalization to be justifiable for listing purposes. Although the relatively modest trading volumes indicate a lack of liquidity in the markets, totaling around $40M, this issue can be mitigated through the implementation of supply caps, debt ceilings, and borrowing limits.

• Chain Risk : A

Ethereum had 0 outages over the last 6 months. (https://etherscan.com/chart/blocks)

• Liquidity Risk of PAR on Ethereum: A-

The PAR-USDC UniV3 pool has 500K$ in concentrated liquidity. The MIMO-PAR Balancer pool has $142k in liquidity, composed of 80% MIMO and 20% PAR.

This provides the following price impact on the following trade sizes:

1000 USDC → PAR: 0.06%

10000 USDC → PAR: 0.12%

25000 USDC → PAR: 0.24%

50000 USDC → PAR: 0.48%

• Overall Risk : B

The Overall Risk is the average of the points mentioned above.

Means:

• Human resources: Multisig DAO signers will need to sign and execute transactions to add pyUSD as PAR collateral on Ethereum.

• Treasury resources: There is no cost for the treasury to add pyUSD on Ethereum.

Technical implementation:

1. Set the chainlink oracle related to the pyUSD: pyUSD/USD into PriceFeed Contract

2. Add pyUSD in the ConfigProvider Contract of PAR with all parameters decided by the Mimo governance.

Voting options:

• Add pyUSD as PAR collateral on Ethereum
• Against pyUSD as PAR collateral on Ethereum
• Abstain

Authors: @starny & @Jeanbrasse from MimoLabs