# Why pETH > The evolution of stablecoins revealed another structural problem. Canonical URL: https://docs.polaris.finance/overview/why-peth Markdown URL: https://docs.polaris.finance/overview/why-peth.md Section: Overview Documentation index: https://docs.polaris.finance/llms.txt Full documentation bundle: https://docs.polaris.finance/llms-full.txt --- The evolution of stablecoins revealed another structural problem. Even if permissionless money could scale without relying on centralized issuers or opaque sources of yield, Ethereum would still face a different challenge. The network secures one of the largest financial ecosystems in the world, yet very little of the economic activity taking place on top of it meaningfully strengthens ETH itself. Today, staking is the primary source of native ETH yield, as it plays a fundamental role in securing the network. But as DeFi continues to grow, staking should not be the only way for ETH to participate in that growth. Polaris is built on the observation that Ethereum's monetary layer and Ethereum's yield layer should not be separate systems. Today, these two operate largely independently, with stablecoins generating enormous economic activity while the collateral supporting them rarely benefits from that activity. At the same time, ETH secures the network that makes this economy possible, yet captures relatively little of the value created above it. Polaris connects these two systems by placing its collateral, pETH, at the center of its yield layer. As demand for stablecoins and synthetic assets permissionlessly issued on top of Polaris grows, the economic activity generated by the protocol is designed to reinforce pETH, the reserve asset supporting them. So instead of importing yield from external dependencies, Polaris redirects value created within its own economy back into the system through liquidity flows. Because pETH is continuously reinforced by the economic activity generated within Polaris, it is not designed to remain a fixed 1:1 representation of ETH. As the reserve asset of the protocol, it is continuously strengthened by the value generated across the ecosystem, allowing the collateral backing the monetary layer to participate directly in the value created by that economy. This distinguishes it from liquid staking tokens, whose yield is derived from securing the Ethereum network.