Perena establishes a unified access point for projects to incorporate stablecoins. Despite its potential, the existing stablecoin ecosystem is witnessing heightened issuance amid thin liquidity pools and competing pressures, which may result in fragmented liquidity and impede growth. Perena fosters the enduring expansion of stablecoins by launching a range of products designed to promote the sustainable development of the stablecoin ecosystem. Perena’s AMM product, Numéraire, integrates Solana Interest Bearing Tokens (IBTs) and adapts to emerging stablecoin standards, offering a flexible foundation for ecosystem expansion.

What is Perena?

Perena is establishing the essential infrastructure for the future of digital currency, addressing significant difficulties in the over $170 billion stablecoin market. As stablecoins persist in transforming digital payments and establishing themselves as a fundamental element of decentralized finance, the proliferation of new stablecoins remains unabated. Perena aims to address the effect of the fragmented market characterized by isolated liquidity pools, capital inefficiencies, and an overwhelming array of sophisticated user experiences.

Perena product, Numéraire, is an innovative automated market maker (AMM) that facilitates stablecoins’ effortless generation and exchange while enhancing market liquidity and efficiency. The approach facilitates superior execution for traders and improved returns for liquidity providers. It offers concentrated liquidity for stablecoin issuers across all supported stablecoins with a single pool formation. Numéraire, built on Solana’s high-performance blockchain, benefits from exceptional speed and cost-efficiency. Perena, supported by an experienced Solana Foundation and Jump Trading team, aims to enhance the accessibility, liquidity, and benefits of stablecoins.

Since Perena is natively built on top of Solana, it can take advantage of the blockchain’s high throughput and low transaction costs, which are which are essential for a stablecoin operation that preserves liquidity and value stability. Integrating Solana poses a risk because the blockchain has experienced numerous outages and stability problems, but its prompt responses to security threats show a strong ability to manage immediate risks, even if the network’s long-term stability is questioned.

Numéraire provides tokenized real-world assets, allowing stablecoin holders to generate a dividend. Users can choose their risk-reward profiles when employing tranched collateralized debt holdings, making Numéraire more appealing to a broader audience.

Perena’s unified liquidity pool enables the seamless cohabitation of several stablecoins, increasing liquidity across the board. This integration improves transaction execution, increases yields for liquidity providers, and creates a more stable environment for issuers. The stablecoin market is fragmented, with several in separate liquidity pools. This can lead to inefficient execution costs and a decrease in the overall performance of stablecoin transactions.

Background of Perena

Penena was established by Anna Yuan and headquartered in Chicago, Illinois, United States. Anna Yuan co-founded Perena and was previously the head of stablecoin at Solana. She holds a B.A. in Philosophy from the University of Chicago and an MBA from Harvard Business School. Binance Labs announced its investment in Perena, implementing the concept of focusing on infrastructure applications from an investment perspective. Perena raised approximately $3 million in seed round financing led by Borderless Capital.

Perena aims to enhance the practicality and benefits of stablecoins for all users. The protocol seeks to establish an impartial platform for managing and exchanging stablecoins. Perena’s principal characteristic is a hub-and-spoke mechanism that channels all transactions through a central asset, diminishing initial capital demands and enhancing swap rates. Perena is backed by notable companies, including Borderless, Binance Labs, Breed, Anagram, and Primitive, and has been featured in Bloomberg, Blockworks, Solana Break Point 2024, and Validated.

How Does Perena Work?

Swapping

Users can facilitate seamless transactions among all supported stablecoins, including USD, its associated assets (USDC, USDT, PYUSD), and the Perena network of partner stablecoins. Users should know that buying and selling USD Star directly in the swap interface simplifies depositing and withdrawing liquidity as a singular asset from the Seed Pool.

Procedure for Executing a Swap

• Choose input and output tokens and amount.
• Evaluate the market price to ascertain the optimal available rate for the swap, utilizing a minimal size, the least output for the minimum quantity of tokens received post-swap, the swap price provided by Perena Pools, inclusive of fees, and the price impact, which denotes the alteration in a token’s price due to the magnitude of a trade within a liquidity pool.
• Adjust slippage tolerance (upper right corner). Slippage occurs when the executed deal price deviates from the advertised price.
• Validate exchange.

Providing Liquidity

To Seed Pool (USD Star)

• Single Asset: Users are required to deposit accepted stablecoins to generate USD.
• Multiple Assets: To optimize USD yield, users must deposit proportional quantities of USDC, USDT, or PYUSD directly.

Seed Pools

To Growth Pools

• Users must select between single asset deposits (USD or partner stablecoin) or balanced deposits.
• Users may employ the Multiple Assets option to optimize balanced deposits, thus lowering fees and maximizing their Growth Pool LP yield.

Growth Pool

Withdrawing Liquidity

• Single Asset: Users must withdraw a token, including the swap fee.
• Multiple Asset: Users can withdraw proportionally from all pool tokens without incurring fees.

Application of Solana Technology in Perena

The consistency of Solana’s blockchain considerably improves Perena’s dependability. Solana’s high uptime and transaction throughput assure constant access and smooth transaction processing. Perena can retain liquidity and avoid instability because of Solana’s speedy transaction processing capabilities and innovative methods. Stablecoin platforms require a stable transaction environment to function correctly. Solana is protected with strong security features to protect against common vulnerabilities. This layered security strategy is critical for ensuring transactions’ integrity through Perena. The ability to effortlessly interface with different blockchains adds to Perena’s stablecoins’ attraction. This compatibility allows for integration with a broader range of decentralized applications. Solana’s low transaction fees make using and transferring stablecoins economically practical. This affordability is critical for developing efficient markets in the cryptocurrency realm.

Perena and other Stablecoin Infrastructure

Perena is at the forefront of innovation in the stablecoin space. Its distinct approach, supported by Solana’s solid infrastructure, aims to address existing difficulties while providing a more efficient and accessible alternative in the crypto market. Perena uses a hub-and-spoke approach for liquidity, which optimizes capital and reduces issuers’ upfront obligations. Binance uses current stablecoins more efficiently through its exchange but does not offer a centralized liquidity solution like Perena. Coinbase relies on external market makers to keep prices steady, which does not address the fragmentation observed in the stablecoin market. Perena’s concept is unique because it provides a uniform liquidity pool to streamline capital needs and improve overall market efficiency.

Perena Product - Numéraire

Numéraire is Perena’s unique automated market maker (AMM) that enables stablecoins’ seamless generation and exchange while improving market liquidity and efficiency. It allows the initiation, trading, and liquidity provisioning of stablecoins by implementing composable, expandable pools while minimizing idle liquidity in conventional AMM systems. Perena possesses a flexible architecture designed to anticipate and adapt to evolving stablecoin requirements. Numéraire is the inaugural stableswap to inherently incorporate Solana Interest Bearing Tokens, fostering innovation and expansion within the Solana stablecoin ecosystem.

Numéraire Architecture

Hub-and-Spoke Model

This modular framework mitigates risks and enhances exchanges by linking proven stablecoins with nascent ones. It comprises a seed pool that allocates its liquidity to many growth pools.

Seed Pool

The Seed Pool is the primary liquidity center, comprising reliable and extensively DeFi-integrated stablecoins, including USDC, USDT, and PYUSD. The USD Star is the liquidity provider token that signifies ownership of the Seed Pool. Its value consistently increases as it generates swap fees and automatically multiplies its return.

Growth Pools

Growth Pools enhance the protocol’s capabilities, consisting of USD as the “hub asset” and several partner stablecoins as the “spoke assets.” The swaps route traverses via USD in two stages: initially converting to USD, followed by a conversion out of it. This system safeguards the Seed Pool from external stablecoin hazards and optimizes the total value locked (TVL) utilization of Numéraire. Minters of USD benefit from both the seed pool yield and the opportunity to deposit into growth pools for supplementary yield.

Numéraire’s Main Features

Bounded liquidity

Bounded liquidity reduces asset inactivity, improving exchange rates and enhancing swap revenue. It is especially crucial for stablecoin pools, as most trading transpires near the peg. This method focuses liquidity inside a limited range at on-peg pricing (0.99-1.01) instead of distributing it across a broader price spectrum. When prices attain the limits of the liquidity range, the pool facilitates trading only in one direction until prices revert to the defined range.

Weighted Asset Exposure

Perena’s pools utilize adjustable asset weights to ensure optimal stability and trading efficiency throughout the protocol. This market-driven strategy establishes a self-sustaining system that autonomously preserves stability, adjusting swap prices according to token ratios without external oversight.

The invariant equation is a reference point that allocates liquidity based on preset weights. When token proportions diverge from these criteria, the equation autonomously generates arbitrage opportunities by providing advantageous swap prices that restore liquidity to equilibrium.

• The Seed Pool allocates 45% to USDC, 35% to USDT, and 20% to PYUSD. Should USDC decline beneath its 45% target, the invariant equation generates more advantageous rates for trades that increase USDC, motivating arbitrageurs to reestablish equilibrium.
• Growth Pools enhance this weighting technique by implementing a straightforward 50/50 allocation between USD (the Seed Pool LP token) and their associated stablecoins. This equitable weighting facilitates effective interchange between new and existing stablecoins in the Seed Pool, while the hub-and-spoke arrangement mitigates risks.

The protocol achieves optimal capital efficiency and stability across both pool types using a market-driven method that does not necessitate active management.

Users’ Benefits of Numéraire

Capital efficiency sometimes introduces additional complications and hazards in typical Solana AMMs, resulting in fragmented liquidity and heightened conversion costs over a broader spectrum of stablecoins. Numéraire rectifies inefficiencies in DeFi by consolidating liquidity with enhanced capital efficiency, offering distinct benefits for all stakeholders. The following users can benefit from Perena’s Numéraire;

Liquidity Providers

Perena’s Numéraire provides liquidity users the opportunity to achieve superior results through passive liquidity provision and these other benefits:

• Pools have enhanced fee generation by concentrating liquidity within a tight price range of 0.99-1.01, increasing the amount of in-the-money liquidity.
• Returns from swap fees are automatically compounded without needing human position rebalancing.
• By integrating native swap costs with the USD* yield from the seed pool, Growth Pools offer a 1.5x income potential.
• Liquidity providers receive the entirety of swap costs across all pools, with a protocol fee anticipated for future deployment.

Stablecoins Issuers

Numéraire was developed to facilitate issuer composability, resolving prevalent bootstrapping difficulties through a singular, expedited integration point.

• Discontinue independent liquidity development; eliminate dual-sided liquidity with USDC.
• Integrate with USD Star to get concentrated liquidity across its underlying assets (USDC/USDT/PYUSD).
• Decrease initial capital and complexity through unilateral liquidity provision and minimum overhead.

Traders

• Reduce costs while exchanging their preferred stablecoins
• Facilitate the trading of emerging stablecoins via a singular, integrated interface.

Conclusion

Perena is a specialized infrastructure for stablecoins aimed at tackling the distinct issues present in the swiftly growing stablecoin ecosystem. It seeks to consolidate disparate liquidity pools and improve capital efficiency, increasing stablecoins’ user reliability. Perena, inherently constructed on Solana, leverages the blockchain’s elevated throughput and minimal transaction expenses. This facilitates swift and economical transactions, which are essential for a stablecoin operation that upholds liquidity and value stability.