A recent $11 million funding round will propel Cap’s yield-bearing stablecoin protocol into the spotlight, promising to democratize access to yield and generate passive interest for users. As the industry heats up with prominent investors on board, the future of stablecoins looks brighter than ever.
A recent $8 million funding round will be used to develop Cap’s stablecoin engine, which is slated to launch later this year. This investment comes from big-name financial institutions including Franklin Templeton and Triton Capital.
A stablecoin is a type of cryptocurrency that maintains a stable value relative to a fiat currency, such as the US dollar.
They are designed to reduce the volatility associated with traditional cryptocurrencies like Bitcoin.
Stablecoins can be pegged to a specific asset or basket of assets and are often used for trading, remittances, and other financial transactions.
The most popular stablecoin is Tether (USDT), which has a market capitalization of over $70 billion.
Building a Yield-Bearing Stablecoin Protocol
Cap, a yield-bearing stablecoin protocol, has shared that it has raised $11 million in funding from prominent investors. The total funding — announced at the close of a recent $8 million seed round — will be used to develop Cap’s stablecoin engine. This system is built so users can generate passive interest — or “yield” — on the tokens.
A yield is a measure of the return on investment (ROI) generated by an asset, such as a 'stock' or 'bond'.
It represents the ratio of income earned to the cost of the investment.
In finance, yields are often expressed as a percentage and can be calculated using various formulas, including the dividend yield for stocks and the coupon rate for bonds.
Understanding yields is crucial for investors to make informed decisions about their portfolios.
Democratizing Yield with Expertise
Cap Labs explained that their system leverages a collective of operators with specialized skills in yield generation to democratize yield previously untapped by the masses. The yield does not solely rely on crypto-native sources like funding rate arbitrage and token farming, but also on the expertise of traditional institutions like HFT firms, private credit funds, and other companies able to capture large-scale “yield”.
Expanding Opportunities for Users
Cap will give users the opportunity to earn extra yield through restaking protocols like EigenLayer. Restaking protocols allow people to stake — or lock up — collateral to secure blockchain protocols in exchange for rewards.
Industry Trends and Implications
This funding news comes at a time when stablecoins are becoming extremely popular, with banking giant Fidelity, President Trump’s “World-Liberty Financial”, and the state of Wyoming sharing their intentions to create their own stablecoins. The U.S. Congress is also focusing its efforts on passing stablecoin legislation.
- coindesk.com | Cap Raises $11M for Stablecoin Engine as Industry Heats Up
