Pareto launches synthetic dollar USP backed by private credit to connect institutional investors with DeFi opportunities

According to Cointelegraph, the Pareto private credit market platform has launched a new synthetic dollar, USP, aimed at connecting institutional investors with decentralized finance (DeFi) opportunities. This synthetic dollar is fully backed by real-world private credit assets, and users can mint it by depositing stablecoins like USDC or USDT at a 1:1 ratio.

Pareto co-founder Matteo Pandolfi explained that the deposited funds will be placed in Pareto's credit vault and lent to vetted institutional borrowers, generating returns for participants. To maintain the peg to the dollar, Pareto employs a "native support" process and arbitrage mechanism, and has established a protocol-funded stability reserve as a buffer in case of borrower defaults.