Introduction

ParyonUSD (PUSD) is a decentralized, over-collateralized stablecoin on Bitcoin Cash. Users deposit BCH as collateral to mint PUSD tokens, which are designed to maintain a value of $1. The protocol is secured entirely by on-chain smart contracts — there is no off-chain custodian or centralized issuer.

PUSD is built on CashTokens, the native token system on Bitcoin Cash. This means negligible transaction fees, fast transfers, censorship resistance, and true ownership — nobody can freeze or blacklist your tokens.

How it works#

ParyonUSD has three core functions that work together to create a stable, yield-generating system:

Borrowing — Deposit BCH as collateral and mint PUSD. You can borrow up to ~90% of your collateral’s value. Your BCH stays locked in a smart contract until you repay the loan. This lets you access dollar-denominated liquidity without selling your BCH.

Staking — Deposit PUSD into the Stability Pool to earn yield. Stakers earn 70% of the interest paid by borrowers, plus profits from liquidations. In return, stakers help secure the protocol by absorbing bad debt when loans are liquidated.

Redeeming — Exchange PUSD directly for BCH at face value. This mechanism is what keeps PUSD pegged to $1. If PUSD trades below $1, anyone can redeem it for $1 worth of BCH, creating natural demand that restores the peg.

Maintaining the peg#

Two mechanisms work together to keep PUSD close to $1:

Redemptions act as a price floor. If PUSD drops below $1, arbitrageurs can buy cheap PUSD and redeem it for $1 worth of BCH, profiting from the difference. This buying pressure pushes the price back up.

Dynamic interest rates act as a price ceiling. Borrowers set their own interest rates. When PUSD is above $1, there’s no redemption risk, so borrowers can set lower rates. Lower rates make borrowing cheaper, encouraging more PUSD to be minted, which increases supply and brings the price back down.

These two loops — supply-side (borrowing and redemptions) and demand-side (staking yield) — form a self-correcting system:

This design is inspired by Liquity V2, a proven stablecoin protocol on Ethereum. ParyonUSD adapts the core economic model for Bitcoin Cash, taking advantage of CashTokens and BCH’s low transaction fees to make DeFi accessible at any scale.

Key properties#

Property	Detail
Collateral	BCH only
Minimum collateral ratio	110% (max ~90.9% loan-to-value)
Borrowing fee	0.5% one-time fee on minted amount
Interest rates	Market-driven, set by borrowers (0% – 119.6% APR)
Staking yield	70% of borrower interest + liquidation profits
Redemption penalty	0.5%
Staking lock period	Until the next epoch (~10 days)

Smart contracts#

ParyonUSD is built with 26 CashScript smart contracts organized into modular subsystems for borrowing, staking, redemptions, and price oracle management. The contracts are open source.

The only upgradable component is the price contract, which can migrate to a new oracle source if needed. All other contracts are immutable — once deployed, nobody can change the rules.

Next steps#

• Quick Start — Connect a wallet and get started
• Borrowing — Learn how to create and manage loans
• Staking — Earn yield in the Stability Pool
• Redeeming — Exchange PUSD for BCH