Welcome to BSM
BSM is a decentralised finance protocol that transforms a single collateral asset(PGold) into two complementary instruments: a Stable Token (PGUSD) and a Leverage Token (LPGold). By splitting the risk and return profile of the underlying asset at the moment of minting, BSM gives every participant the ability to choose exactly the exposure they want — stable purchasing power or amplified upside — without requiring a centralised counterparty.
BSM is built around a single underlying ERC-20 collateral asset — PGold — which sits at the top of the architecture as the entry point for all capital flows. PGold is a tokenised representation of gold, and it serves as the sole asset deposited into the protocol. Users bring PGold to the system, and everything downstream is derived from it.
At the core of the protocol, depositing PGold triggers a Mint/Burn operation that bifurcates the collateral into two distinct output tokens. The first is LPGold (ERC-1155), the leverage token that tracks amplified exposure to the gold price; its ERC-1155 standard allows multiple leverage tiers and price levels to coexist under a single contract, each identified by a unique token ID. The second is PGUSD (ERC-20), the stable token perpetually pegged to 1 unit of account, representing the senior, capital-protected tranche of each position. These two tokens are always minted and burned together in fixed proportions determined by the chosen leverage tier, ensuring the system remains fully collateralised.
The AMM (PGUSD + U) pool bridges the protocol to the broader DeFi liquidity market. PGUSD flows into the AMM where it is paired against USDT, allowing stable-token holders to swap between PGUSD and USDT at market rates without needing to redeem their position through the custodian. This provides continuous secondary-market liquidity and a reliable price anchor for PGUSD.
Risk management is handled by the Liquidation module, which is continuously fed live gold price data by the Gold Token Oracle. When the oracle reports a price decline severe enough that a position's collateral can no longer cover its PGUSD obligations, the Liquidation module steps in to unwind the affected LPGold positions and restore protocol solvency — protecting PGUSD holders from any shortfall.
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