PLabs proposes a private Ethereum stablecoin design separating unbacked inventory from reserve-backed notes with open redemption.
DeFi & Yields ·
PLabs published a technical paper on October 9, 2026 describing a private stablecoin protocol for Ethereum that splits protocol inventory from circulating notes, each backed 1:1 by a reserve asset such as USDC. The design does not report a deployed stablecoin; rather, it presents an architecture that anyone could instantiate using a chosen ERC-20 reserve, enforced through two immutable smart contracts, ReserveVault and NotePool, plus zero-knowledge circuits.
The protocol's core mechanism separates minting from circulation. Protocol-owned notes serve as unbacked inventory until a user deposits matching reserve tokens in a single transaction, converting those notes into circulating private claims. This accounting split prevents inventory leakage: even if the inventory spending key were compromised, an attacker could not convert stolen notes into redeemable obligations without funding the ReserveVault with actual reserves. The system supports on-ramp workflows where a user provides a private payment address and the ramp creates the output note and signs an EIP-712 authorization that a relayer later submits on-chain.
The paper specifies NotePool with a commitment tree of depth 32 that transitions to exit-only mode once more than half its leaves are consumed, preserving redemption rights for all unspent notes. The exact mechanisms by which redemption remains "open to holders and relayers" and how the protocol manages state during exit-only operation remain subjects for further specification and deployment.