Circle Unveils Open-Source Credit Market Protocol for Public Networks

Circle Today, Circle has introduced the Perimeter Protocol, an innovative open-source framework designed to make credit transactions online more efficient. They also announced their intent to launch Circle Research.

The Perimeter Protocol represents the inaugural offering from Circle Research. The company explains that this protocol comprises a collection of smart contracts founded on open standards, which facilitate secure and transparent capital exchanges on public platforms.

According to Circle, its USDC and EURC stablecoins have become vital assets for diverse groups, including developers, businesses, and individual users, especially within the growing decentralized finance (DeFi) lending sector.

However, those new to these financial landscapes encounter challenges pertaining to the safe unlocking of credit on blockchain platforms via robust standards and underwriting practices.

To tackle this challenge, Circle has introduced the Perimeter Protocol, aiming to integrate real-world assets as well as loans that lack sufficient collateral into a publicly available service. Perimeter white paper and a public Github repository One of the highlights of the Perimeter Protocol is its versatility, enabling it to cater to a myriad of credit applications.

These applications range from invoice financing for SMEs to institutional crypto lending for trading opportunities, facilitating advances for global payroll and enabling instantaneous settlements in merchant transactions.

Circle’s Perimeter Protocol is designed to address online credit transactions on public networks with a focus on real-world applicability. Its goal is to simplify credit processes for organizations through uniform standards in underwriting and permissions.

The whitepaper highlights that the protocol allows Pool Admins—responsible for managing underwriting risk and pool dynamics—to modify fee structures and pool attributes whenever needed. Additionally, the protocol brings predictability and transparency to lenders, ensuring a trustworthy lending environment.

Circle asserts that the protocol functions without associated fees and does not necessitate a native token. This feature allows developers to build on a shared public infrastructure, enhancing existing market functionalities.

These functionalities encompass venture debt, trade financing for global corporations, revenue-based funding for businesses maintaining on-chain records, instant settlement using stablecoins to streamline fiat payment systems, syndicated loan markets across various sectors, and emerging fintech solutions for consumers and SMEs.

"DeFi protocols have revolutionized how open networks utilizing stablecoins provide value and enhance financial inclusion for anyone with a wallet and internet access,\" stated Rachel Mayer, Circle’s VP of Product. \"The transparent flow of funds and implementation of smart contracts under the premise of 'code is law' lead to improved efficiency, automation, speed, and scalability compared to traditional financial systems through programmable infrastructure and around-the-clock access to digital assets.\"

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