PIP-50 l Introducing Parallel V3: A Modular, Scalable & Decentralized Stablecoins Protocol

Summary:

The proposal aims to introduce and launch Parallel V3, a modular, scalable & decentralized stablecoins protocol.

Context:

Launched in 2021, Parallel pioneered by launching the first decentralized EUR stablecoin. It grew rapidly and then slowly declined over time, mainly due to the many limitations it has encountered over the years:

• Scalability: almost impossible to scale the supply of stablecoins without spending astronomical sums in incentives, mainly due to the architecture of the protocol, which is a collateralized debt protocol (CDP).
• Stability: Difficulty in maintaining a stable peg over time, mainly due to the lack of redeemability of the stablecoin against its collateral and the complexity of updating borrowing rates in correlation with market conditions.
• Upgradability: The protocol was designed to be partially upgradable, and this has been done several times over the years. However, it was very complicated to update securely, making any operation risky.

With this in mind, we decided it would be simpler to start from a fresh base to develop a V3. There were several options open to us:

• develop v3 from scratch
• fork an existing, proven protocol

Both for reasons of time (short) and cost (cheaper), it seemed unreasonable to redevelop an architecture that had already been developed dozens of times in the past by different protocols. So we decided to fork an existing protocol. Starting October 2024, we got in touch with teams from several protocols to discuss an agreement to deploy a friendly fork. After several months of discussions, we reached an agreement with Angle Labs, the main developer of Angle Protocol, to deploy a licensed friendly fork of the Transmuter, their decentralized price stability module.

Rationale:

Parallel V3 is a stablecoins protocol allowing the creation of decentralized, capital-efficient and over-collateralized stablecoins built using a modular & upgradable architecture. The protocol consists of several different modules,which can be added or removed over time by the DAO, from which stablecoins can be issued or minted. Any type of stablecoin can be deployed on Parallel V3, for instance: USD, EUR, CHF, ETH, BTC, etc..

Parallel V3 is in majority a licensed friendly fork of Angle, with some in-house built modules (e.g. bridging module)

[FULL PROPOSAL ON THE GOVERNANCE FORUM, DUE TO SNAPSHOT LIMITATIONS]

III. Codebase Licenses

Parallel V3 is divided into 3 different repositories, each with different licenses: parallel-core: Licensed under MIT license, available here. Basically, you can do whatever you want as long as you include the original copyright and license notice in any copy of the software/source. The license includes the AccessManager contract. parallel-tokens: The license includes the stablecoins token contracts, as well as the Bridging & Flashloan modules. parallel-parallelizer: Licensed Friendly Fork of Angle Protocol codebase. Released under Business Source License 1.1 (BUSL 1.1) with rights granted to Mimo Labs & Cooper Labs to use the license for commercial purposes via a signed License and Fee-sharing Agreement. This agreement does not engage the Parallel DAO into anything. The license includes the Parallelizer & Savings modules.

IV. Fee Sharing

The parallel-parallelizer repository is a licensed-friendly fork of Angle Protocol's Transmuter. The licenses have been granted to Mimo Labs and Cooper Labs without any financial remuneration. It is however mentioned in the agreement that Cooper Labs and Mimo Labs would propose to the Parallel DAO to share part of the fees generated by the licensed friendly fork, up to 1% of the fees generated until the licenses expire. We therefore propose that the Parallel DAO share 1% of the fees generated by the parallel-parallelizer repository until the license expires on June 1, 2026.

V. Audits

While Parallel V3 is for the majority of the codebase a licensed friendly fork of the Angle Protocol, which is already audited and in production since 2 years, we decided to conduct an additional audit performed by Bail Security (audit report available here) and a partial formal verification performed by Certora (partial formal verification report available here).

In agreement with Mimo Labs, they decided to cover the costs of the audit & partial formal verification prior to the approval and production deployment of Parallel V3. The total cost for it is $200k. Bail Security audit invoice can be found here ($120k), Certora partial formal verification invoice can be found here ($80k).

We are requesting the DAO to reimburse the costs of the audit & partial formal verification for an amount of $200,000.

Note: Mimo Labs does not make any profit from this reimbursement.

Means:

• Human Resources: Multisig signers will need to sign transactions to execute the proposal.
• Treasury Resources: $200,000 worth of PAR/paUSD/USDC on Ethereum to Mimo Labs.

Technical implementation: For each stablecoin and on each chain where the protocol will be deployed: I. Core Protocol:

• Deploy the AccessManager contract
• Deploy TokenP contract
• Set targetSelector of TokenP contract to TokenP_MINTER_ROLE by calling the accessManager

II. Parallelizer Module:

• Deploy All facets
• Deploy DiamondInitializer if not deployed (used to initialize the Parallelizer)
• Deploy Parallelizer with the following collaterals config:
• Collateral1:
  • Oracle:
    • oracleType
    • targetType
    • quoteType
    • stalePeriods
    • chainlinkDecimals
  • Hyperparameters:
    • xMintFee
    • yMintFee
    • xBurnFee
    • yBurnFee
  • RedemptionSetup:
    • xRedeemFee
    • yRedeemFee
• Set targetSelector of Parallelizer contract to GUARDIAN_ROLE and GOVERNOR_ROLE
• Grant TokenP_MINTER_ROLE to the Paralleliser by calling the accessManager

III. Savings Module:

• Deploy sTokenP
• Set targetSelector of sTokenP to GUARDIAN_ROLE and GOVERNOR_ROLE
• Grant TokenP_MINTER_ROLE to the sTokenP by calling the accessManager

IV. Bridging Module:

• Deploy BridgeableTokenP contract
• Setup Peer and DVNs to link BridgeableTokenP with others chains
• Set targetSelector of BridgeableTokenP contract to GUARDIAN_ROLE and GOVERNOR_ROLE
• Grant TokenP_MINTER_ROLE to the BridgeableTokenP by calling the accessManager

V. Flashloan Module:

• Deploy FlashParallelToken contract
• Set targetSelector of FlashParallelToken contract to GOVERNOR_ROLE
• Grant TokenP_MINTER_ROLE to the FlashParallelToken by calling the accessManager

Voting options:

• For the Launch of Parallel V3
• Against / Rework the Proposal
• Abstain

Author(s): Cooper Labs