Summary:
This proposal initiates the sunset of PAR, the EUR-pegged stablecoin issued by Parallel V2, on Ethereum and Polygon PoS. It follows the successful sunset of paUSD (PIP-54) and is the logical next step now that Parallel V3 is live and the DAO’s focus has shifted to USDp, sUSDp, and upcoming V3 stablecoins.
Context:
PAR was launched as Parallel V2’s EUR-pegged CDP stablecoin on Ethereum & Polygon. It was the first decentralized, over-collateralized EUR stablecoins in DeFi, and has been supported by a wide set of collaterals across both chains.
Since then, the protocol has gone through two major transitions:
- Parallel V3 was launched in September 2025 (PIP-50), introducing a fully modular architecture based on the Parallelizer module, Savings module, Bridging module and Flashloan module. V3 replaces the V2 CDP model and is now the active development and deployment focus of the protocol.
- paUSD, V2’s USD stablecoin, was sunset in November 2025 via PIP-54 following the launch of USDp on V3. This established a clear, battle-tested template for winding down a V2 stablecoin while protecting existing users.
PAR’s circulating supply, active vaults, and liquidity have been steadily decreasing, while the maintenance, monitoring, and risk-management overhead of keeping V2 PAR fully active remains non-trivial.
Rationale:
We propose a two-phase sunset for PAR on Ethereum and Polygon PoS. This proposal covers Phase I.
Goals of Phase I:
- Halt virtually all new PAR issuance, so that PAR’s outstanding debt can only go down from here.
- Strongly incentivize existing borrowers to repay, via a punitive 50.00% annual borrow rate across all collaterals on both chains.
- Still leave enough headroom on the three most liquid collaterals: wETH, wBTC, USDC so that existing borrowers can refinance, top-up, or unwind their positions in an orderly manner during the wind-down window.
Why these exact caps: They are sized to be comfortably above the existing PAR debt currently backed by these collaterals, while still being small enough to prevent any meaningful new position build-up.
Why these three collaterals: The vast majority of the collaterals listed below have seen little to no meaningful usage historically, most of them never accumulated a significant share of PAR’s outstanding debt. Keeping only the three collaterals that are actively used today (wETH, wBTC, USDC) has a double benefit: it concentrates the wind-down on assets where borrowers genuinely need headroom to unwind, and it materially reduces the protocol’s risk surface by effectively closing every unused collateral vault at the same time.
On Ethereum
| Collateral | Debt Limit (PAR) | Borrow Rate |
|---|---|---|
| wETH | 2,000,000 | 50.00% / yr |
| wBTC | 250,000 | 50.00% / yr |
| USDC | 250,000 | 50.00% / yr |
| wstETH | 0 | 50.00% / yr |
| rETH | 0 | 50.00% / yr |
| cbETH | 0 | 50.00% / yr |
| weETH | 0 | 50.00% / yr |
| osETH | 0 | 50.00% / yr |
| ETHx | 0 | 50.00% / yr |
| sfrxETH | 0 | 50.00% / yr |
| DAI | 0 | 50.00% / yr |
| FRAX | 0 | 50.00% / yr |
| LUSD | 0 | 50.00% / yr |
| RAI | 0 | 50.00% / yr |
| crvUSD | 0 | 50.00% / yr |
| PYUSD | 0 | 50.00% / yr |
| sUSDe | 0 | 50.00% / yr |
| wUSK | 0 | 50.00% / yr |
| CRV | 0 | 50.00% / yr |
| BAL | 0 | 50.00% / yr |
| AAVE | 0 | 50.00% / yr |
| LINK | 0 | 50.00% / yr |
| MKR | 0 | 50.00% / yr |
| SUSHI | 0 | 50.00% / yr |
| UNI | 0 | 50.00% / yr |
On Polygon PoS
| Collateral | Debt Limit (PAR) | Borrow Rate |
|---|---|---|
| wETH | 100,000 | 50.00% / yr |
| wBTC | 100,000 | 50.00% / yr |
| USDC | 100,000 | 50.00% / yr |
| wMATIC | 0 | 50.00% / yr |
| MaticX | 0 | 50.00% / yr |
| stMATIC | 0 | 50.00% / yr |
| wstETH | 0 | 50.00% / yr |
| DAI | 0 | 50.00% / yr |
| CRV | 0 | 50.00% / yr |
| BAL | 0 | 50.00% / yr |
| AAVE | 0 | 50.00% / yr |
| LINK | 0 | 50.00% / yr |
| UNI | 0 | 50.00% / yr |
Means:
- Human Resources: Multisig signers on Ethereum and Polygon PoS will need to sign and execute the transactions described in the Technical implementation.
- Treasury Resources: No treasury resources needed.
Technical implementation:
All parameter changes are executed by the DAO Multisig on each chain by calling setter functions on the PAR ConfigProvider contract.
For every PAR collateral on both chains, the DAO Multisig will call:
ConfigProvider.setCollateralBorrowRate(collateral, 50.00% APR)— set the annual borrow rate to 50.00%.ConfigProvider.setCollateralDebtLimit(collateral, newDebtLimit)— set the debt limit to the value specified in the tables below (expressed in PAR, with 18 decimals).
Voting options:
- For the Sunset of PAR - Phase I
- Against / Rework the Proposal
- Abstain
Sentiment poll:
- For the Sunset of PAR - Phase I
- Against/Rework the proposal
- Abstain
Author(s): Cooper Labs