Understanding the PLNY Reserve Model

Trust in a stablecoin comes down to one fundamental question: is it actually backed by what the issuer claims? At Olbra, we've designed PLNY with transparency and security at its core. This article explains exactly how our reserve model works and why it matters for every PLNY holder.

What Is a Full Reserve Model?

Unlike fractional reserve banking—where banks lend out most of deposited funds—a full reserve model means that for every PLNY token in circulation, there exists an equivalent amount of Polish złoty held in reserve. If there are 100 million PLNY tokens outstanding, we hold at least 100 million PLN in reserves.

This 1:1 backing ensures that any PLNY holder can redeem their tokens for actual PLN at any time. There's no leverage, no fractional lending, and no algorithmic mechanisms—just straightforward asset backing.

Reserve Composition

Our reserves are held in a carefully structured portfolio designed to maximize safety and liquidity:

• Cash Deposits (70-80%): Held in segregated accounts at multiple regulated Polish banks. These funds are not commingled with Olbra's operational accounts and are protected under Polish banking regulations.
• Short-Term Polish Treasury Bills (20-30%): Government securities with maturities under 90 days. These provide additional security through sovereign backing while maintaining high liquidity.

We deliberately avoid higher-yield but riskier investments. The reserve's purpose is stability, not profit maximization. Any interest earned on reserves supports Olbra's operations and ecosystem development.

The Attestation Process

Trust requires verification. That's why we undergo regular third-party attestations from independent accounting firms. Here's how the process works:

• Monthly Snapshots: At the end of each month, auditors take a snapshot of our reserve holdings and compare them to the total PLNY tokens in circulation on-chain.
• Bank Confirmations: Auditors independently verify account balances directly with our banking partners—they don't rely solely on our internal records.
• Public Reports: Attestation reports are published on our website within two weeks of each month's end, including details on reserve composition and any discrepancies (of which there should be none).

Real-Time Transparency

Monthly attestations provide periodic verification, but we go further with real-time transparency tools:

• On-Chain Supply Tracking: The total PLNY supply is visible on-chain at any moment. Anyone can verify the current circulating supply independently.
• Proof of Reserves Dashboard: Our dashboard shows the current reserve ratio, historical attestations, and links to audit reports. While we can't display bank balances in real-time (banks don't offer this), we update reserve data daily.
• Smart Contract Transparency: Our minting and burning contracts are verified and open-source. You can see exactly how PLNY is created and destroyed.

The Minting and Redemption Process

Understanding how PLNY enters and exits circulation helps explain the reserve model in practice:

Minting: When a user wants to acquire PLNY, they send PLN to our designated bank account. Once the deposit is confirmed, we mint an equivalent amount of PLNY tokens and send them to the user's wallet. The deposited PLN becomes part of the reserve.

Redemption: When a user wants to convert PLNY back to PLN, they send their tokens to our redemption contract. The tokens are burned (permanently destroyed), and we initiate a PLN transfer to their bank account. This ensures the reserve always matches the circulating supply.

Why This Matters

The collapse of algorithmic stablecoins like UST demonstrated what happens when backing mechanisms fail. Our full reserve model is deliberately conservative because we believe a stablecoin's primary function is to be stable and trustworthy—not to generate yields or employ complex financial engineering.

When you hold PLNY, you're holding a digital representation of Polish złoty that you can redeem at any time. That's the promise, and our reserve model is how we keep it.

Want to see our reserves for yourself? Visit our proof of reserves page or learn more about PLNY.