The Perimeter Protocol smart contract codebase, released on Friday by stablecoin issuer Circle Internet Financial, aims to act as an open-source framework for tokenized credit markets.Invoice factoring, payroll advances, quick settlement for merchants, and credit trading for institutional investors are just a few of the credit use cases that Perimeter can serve, according to the business in a blog post.Developers are free to replicate the codebase and create new products using it, and its white paper is openly accessible.
The protocol also serves as the launch of Circle Research, the company’s new open-source development section.The announcement coincided with the growing momentum behind tokenizing real-world assets (RWA), which is the process of integrating conventional financial instruments like credit into blockchain-based applications.According to a Bank of America (BAC) research, tokenization might upend the current financial infrastructure by establishing a more effective and open system.According to Bernstein, the market for tokenized assets might reach $5 trillion over the following five years.
Stablecoins are a crucial component of the settlement infrastructure for blockchain-based lending markets.Circle’s $26 billion USDC and EURC tokens could become more useful if it supports tokenization initiatives and the creation of decentralized finance (DeFi) credit networks.
“We’ve seen the great utility stablecoins and USDC have brought to developers, corporations, end-users and more across an array of use cases, including for global lending markets within DeFi,” the company said in a blog post. “However, for new entrants to participate in these markets, the ability to securely unlock credit on-chain through safe standards and underwriting, represents a significant barrier to entry.”
The first Perimeter-based offering was a yield-generating tokenized U.S. Treasury pool from institutional DeFi platform OpenTrade.