SWEEP is a dollar-denominated coin for savers. Stablecoin holders can swap into SWEEP to get improved interest pass-through, proof of reserves, and asset protection.
Savers can buy and sell SWEEP from an AMM on each participating blockchain. Savers can exchange fiat-redeemable stablecoins such as USDC, USDT, and BUSD.
Sweep pays interest through an increase in the value of the SWEEP coin. The interest rate is modified once per week in order to balance the demand for savings with the supply of investment. SWEEP is designed to pay a competitive rate under most market conditions.
Sweep is designed to provide a worry-free rate of interest, with redemption at the expected price within one week. To achieve these goals, Sweep allocates to safe money market securities.
Sweep can shift allocations from CeFi to DeFi as relative rates change.
Stablecoin holders have about $130B in fiat-convertible stablecoins paying zero interest, as of December 2022. Stablecoin vendors are extracting a larger and larger spread from these customers by investing in money markets paying 4.5%.
A traditional bank "sweep account" will lower this cost by moving unused funds from low-interest checking accounts to higher interest savings accounts. Sweep gives a stablecoin holders a similar opportunity to swap into interest-paying assets. It can also upgrade transparency, redundancy, and other features.
Stablecoins serve a software-based world of protocols, fintech products, and self-custody wallets. Sweep gives these users a simple AMM channel and straightforward value accrual, without gates or games.
The world economy has demonstrated a huge demand for dollars. They are used for transactions, and as a store of value. Dollars are also in high demand for loans, because (until recently) the US Fed has demonstrated a willingness to supply dollars when needed to repay loans. A "eurodollar" market satisfies this demand for participants without US bank accounts. Estimates of eurodollar assets range from $5T to $10T. We see stablecoins as a more advanced platform for Eurodollar transactions, bringing advantages in settlement speed and convenience, automation, and transparency.