The Composability Thesis

A stablecoin's value in DeFi extends beyond its peg. It is measured by how many protocols it reaches, how efficiently it can be deployed, and how predictable its behavior is across market conditions.

USDG already operates across leading exchanges, wallets, and DeFi protocols. Its presence on Pendle, where participants can trade future yield and access fixed-rate exposure through PT-USDG, demonstrates demand for time-based strategies built on top of a regulated stablecoin.

Fira extends this composability one step further. As a fixed-rate lending protocol, Fira turns PT-USDG into productive collateral: holders can borrow against it at a rate that is known at entry and fixed until maturity. No floating-rate exposure. No utilization-driven repricing.

The path from Paxos, the issuer of USDG to Pendle to Fira illustrates what composability looks like in practice: a regulated stablecoin, tokenized into a fixed-rate instrument, deployed as collateral into a lending protocol. Each layer adds utility without requiring trust assumptions beyond the underlying asset.

USDG: A Super-Collateral for Fixed-Rate Markets

Not all collateral is equal. Fixed-rate lending markets are sensitive to collateral quality. Because the rate is locked at entry, the protocol must be confident that the collateral will hold its value through maturity.

USDG's properties make it particularly well-suited for this role:

• Regulated issuance. Paxos is licensed as a Major Payments Institution by the Monetary Authority of Singapore and operates under MiCA compliance in the EU. This regulatory clarity is not cosmetic. It translates into quantifiable risk parameters.

• Full backing and 1:1 redeemability. USDG reserves are segregated and transparently managed. The asset behaves predictably, a prerequisite for any fixed-rate collateral.

• Proven peg stability. A stablecoin that trades consistently at $1.00 produces tighter lending parameters. On Fira, PT-USDG operates at 94% LTV, the highest capital efficiency on the platform. This reflects the low-risk profile of the underlying asset.

For comparison, most DeFi lending markets offer 75-85% LTV on standard stablecoin collateral. The 94% threshold available to PT-USDG on Fira is a direct result of USDG's regulatory and structural properties.

Fixed Rates Bring Rationality to Onchain Credit

Most DeFi lending operates on floating rates driven by pool utilization. This model creates unpredictable borrowing costs and makes it difficult for participants to plan, hedge, or compare across markets.

Fira introduces a different model: fixed rates discovered by supply and demand at each maturity. When participants commit to a rate, it remains constant until expiry. This has two structural consequences that benefit USDG and its holders:

• Predictable cost of capital. Borrowers who use PT-USDG as collateral know their exact repayment amount from day one. There is no accrual, no rate adjustment, no dependency on utilization curves. This predictability is especially relevant for treasury operations and institutional participants who need visibility over their funding costs.

• Rate arbitrage across fixed-rate markets. With multiple PT assets available as collateral on Fira (PT-USDG, PT-USDe, PT-sUSDe), participants can compare implied rates across different stablecoins and maturities. When spreads diverge, arbitrageurs step in and bring prices back to equilibrium. This dynamic rationalizes fixed-rate markets and deepens liquidity. USDG, with its 94% LTV, is the most capital-efficient collateral for these strategies and the natural base asset for rate-sensitive participants.

From Borrowing to Lending: USDG Across the Full Credit Spectrum

Today, Fira accepts PT-USDG as collateral on its fixed-rate borrowing markets. USDG holders who have acquired PT-USDG through Pendle can borrow USDC at a rate fixed at entry, at the highest capital efficiency available on the platform.

This is the first step. Fira's roadmap includes USDG as a lending asset. Participants will be able to lend USDG directly and earn a fixed return over a defined maturity.

When both sides are live, USDG becomes a full-spectrum stablecoin on Fira's fixed-rate infrastructure: those who want to borrow can borrow against it, those who want to lend can lend it. A complete, two-sided fixed-rate market built around a single regulated stablecoin.

This positions USDG differently from most stablecoins in DeFi, which are primarily used as settlement or trading assets. On Fira, USDG becomes a credit asset: the foundation of a fixed-rate market where both supply and demand converge around the same regulated, fully-backed stablecoin.

Fira as Infrastructure: What It Means for USDG

Fira is not a product built around a single use case. It is infrastructure: a credit layer that any asset can plug into, provided it meets the protocol's collateral standards.

For USDG, this matters in two ways:

• Expanded utility without fragmentation. USDG's integration into Fira does not create a new, siloed market. It connects to the same liquidity pool used by all fixed-rate markets on Fira. USDG holders access a shared, deep liquidity layer, not a standalone venue.

• A composability proof point. The USDG journey from Paxos to Pendle to Fira is a live example of how a regulated stablecoin can extend its reach through open, permissionless infrastructure. Each integration multiplies the strategies available to holders (fixed yield, liquidity provision, rate arbitrage) without requiring bilateral partnerships or custom integrations.

This is the model that scales: infrastructure that is open, composable, and asset-agnostic. USDG benefits from it in the same way that USDC and USDT have benefited from broad DeFi integration, with the additional layer of regulatory clarity that institutional participants increasingly require.

USDG in Context: A Credible Alternative in DeFi

DeFi's stablecoin landscape has been dominated by USDC and USDT. Both have deep liquidity and broad integration. But the market is shifting: institutional participants, regulated entities, and protocols with compliance requirements are looking for stablecoins that combine DeFi composability with transparent, regulated issuance.

USDG meets this demand. With a market capitalization exceeding $1.7 billion, more than 100 partners in the Global Dollar Network, and presence across Ethereum, Solana, Ink, and X Layer, USDG is building the liquidity and integration footprint that DeFi participants expect, while maintaining the regulatory standards that institutional allocators require.

The Fira integration is one more step in this direction: USDG operating as collateral in a fixed-rate credit protocol, alongside other major stablecoins, at the highest capital efficiency available.

About USDG

USDG is issued by Paxos, a regulated blockchain and tokenization infrastructure platform. USDG is fully backed and redeemable 1:1 for US dollars. Paxos Digital Singapore is licensed as a Major Payments Institution supervised by the Monetary Authority of Singapore. Paxos Issuance Europe operates under FIN-FSA supervision and complies with MiCA regulations. The Global Dollar Network brings together more than 100 partners to accelerate and reward stablecoin adoption.

About Fira

Fira is an autonomous onchain protocol for fixed-rate lending and borrowing. It introduces maturity-based credit markets where rates are discovered by supply and demand, not set by utilization curves. Fira is built by Steady Labs and owned by the Usual DAO. Learn more at fira.money.