Overview

ParyonUSD is a decentralised, over-collateralised stablecoin protocol on Bitcoin Cash. Users lock BCH in a borrowing position and receive a dollar-denominated token without placing their collateral with a custodian. The protocol also supports staking and direct redemption of the stablecoin against the collateral behind it.

The protocol adapts the Liquity V2 model to CashTokens. Positions require a minimum collateral ratio of 110%, while direct redemptions and dynamic interest rates help the stablecoin hold its peg. Its rules and positions live on-chain, and neither the application nor its operators hold user funds or keys.

The system is designed to minimise trusted control. All protocol contracts are immutable except the price oracle, whose centrally operated price feed is the protocol's only trusted external input. The application connects directly to the Bitcoin Cash network for core operations rather than routing them through a ParyonUSD server.

My work

I co-founded ParyonUSD and built the user-facing application. I also helped architect the contract system, including the division of responsibilities between contracts and the game-theoretic mechanisms through which they interact. The optimistic redemption mechanism described below was my design.

Parallel protocol design

Most DeFi protocols, including Liquity V2, assume global state that contracts can inspect and update. Bitcoin Cash instead uses independent transaction outputs. ParyonUSD turns this into an advantage: loans are independent on-chain objects, and contracts that could become points of contention are deployed as multiple instances. Operations can execute in parallel rather than queue behind a shared contract.

Redemptions are one operation that still needs a global ordering: the loan with the lowest interest rate must be redeemed against first. ParyonUSD handles this optimistically. A redeemer proposes a loan; during the following twelve blocks, anyone who identifies a lower-rate loan can replace the target and benefit financially. Economic incentives therefore enforce the correct ordering without a global on-chain list.

The contracts and their audit material are open source, and the protocol is documented in more detail in the technical documentation.

The application

The application lets users create and manage loans, make repayments, stake PUSD, claim earnings and redeem PUSD for BCH. It uses the core protocol library to query on-chain state and construct transactions, then sends them to a connected wallet for signing. The application remains non-custodial and cannot move funds without the user's approval.

Wallet support reflects the same decentralised environment. The application supports both WalletConnect and WizardConnect as well as multiple wallets, but independently maintained wallets implement different protocols, token metadata and feature sets. Cashonize, maintained by my cofounder, currently provides complete support; other wallets support different subsets of the platform's functionality. The current compatibility matrix is maintained in the wallet documentation.

Security review

The contracts went through professional external audits and extensive internal review. Follow-up AI-assisted security analysis nevertheless found a critical vulnerability that those reviews had missed. It was corrected before launch, and no user funds were exposed.

Today

ParyonUSD is live with around $500k in total value locked, making it the largest stablecoin protocol on Bitcoin Cash. Current loans, stakes, redemptions and protocol activity are published on the public statistics site.