🔧The Problem of Crypto-Native Money

In the DeFi space, a decentralized, scalable form of stable money is essential to ensure financial independence from traditional systems. While DeFi strives to create a parallel financial infrastructure, stablecoins, a critical component, are still highly dependent on legacy banking and centralized systems. This reliance limits the potential of a truly independent, censorship-resistant financial ecosystem.

• Challenges with Current Stablecoins

Fiat-Collateralized Stablecoins These stablecoins are pegged to traditional currencies, typically backed by fiat reserves held by centralized institutions. While they provide a stable value relative to fiat, they are exposed to centralization risks and regulatory scrutiny, creating potential vulnerabilities in the system.

Crypto-Collateralized Stablecoins Stablecoins backed by crypto assets aim to maintain decentralization but often require significant over-collateralization to handle volatility, making them capital-inefficient. Additionally, they remain sensitive to crypto market swings, limiting scalability and stability.

Algorithmic Stablecoins These rely on complex mechanisms to maintain a stable value but have often struggled to maintain their peg during market downturns, raising concerns about their reliability and resilience.

• Need for Decentralized, Scalable Stable Money

As DeFi grows, it cannot rely indefinitely on stablecoins tethered to traditional banking infrastructure, especially when that infrastructure carries regulatory and systemic risks. A stable, crypto-native asset—untied to the vulnerabilities of legacy banking—is essential to support DeFi’s foundation. This asset must be both globally accessible and scalable to fulfill its role as a secure store of value and a functional transactional currency in decentralized finance.

Why a Solution Like USDs is Essential

Access to a dollar-denominated, decentralized asset allows users worldwide to preserve capital securely, without dependence on permissioned financial systems. For over 8 billion people, especially those outside the US, there is no easily accessible way to save in a dollar-backed asset or earn returns on it without going through centralized entities. Current stablecoin demand is already in excess of $150 billion, despite their reliance on traditional banking, indicating a vast opportunity for an independent solution.

By introducing USDs, Solenes aims to fulfill this unmet need, providing a stable, accessible, and censorship-resistant currency that empowers users globally and enhances the resilience and scalability of the DeFi ecosystem.