CAP Money on the testnet CAP Money is currently being experimented upon on the testnet. It’s set to launch immediately after MegaETH is deployed on the mainnet. The protocol aims to provide users with a secure and yield-generating stablecoin, cUSD, fully redeemable 1:1 with USDC/USDT.
Innovative Yield Generation
Unlike similar programs, CAP further distinguishes itself by outsourcing the yield generation process to professional institutions that are called either Operators or agents. These Operators are chosen through a competitive and exacting delegation process, making sure that only the best-qualified entities make it in. Institutions still need to be whitelisted and then need to actually be convincing restakers to delegate to them, proving their expertise and track record. Purposefully evaluating each of these ranges allows us to maximize potential year-over-year yield generation while mitigating risk.
In order to become an Operator, institutions need to exceed a CAP-defined hurdle rate. This hurdle rate ensures that only those institutions able to produce a specified rate of return are included. CAP sets a benchmark yield, which dictates how the generated yield is shared with stablecoin holders. By using this benchmark, profit distribution is fair, clear, and aligned with the interests of both Operators and stablecoin holders.
Within the CAP design, Operators can withdraw USDC from the collateral pool to execute their proprietary strategies. This increased access to capital allows Operators the flexibility to try more varied and potentially higher-return strategies. Yet, this access is tightly controlled and guarded so that the interests of stablecoin holders are always protected.
Security via Restaking
Security is always the highest priority at CAP, and the protocol uses Ethereum restaking to secure the Operators’ work execution. By restaking Ethereum, CAP ensures an extra layer of security, reducing risks in case of Operator strategies. This creative mechanism makes sure stablecoin holders don’t lose out, while maintaining the stability of the cUSD stablecoin.
The new restaking mechanism offers this safety net, drastically increasing the likelihood that losses will be covered should Operators engage in misconduct or volatile market conditions cause loss. This security feature is one of the major differentiators for CAP, giving confidence to users and piquing institutional interest.
Launch and Future Prospects
CAP Money is still being tested on the testnet. Yes, it will launch on the mainnet as soon as MegaETH is live. This launch has been eagerly awaited because CAP Money is the next major step forward in the stablecoin evolution. The use case The type 3 protocol is defined by its special combination of stability, yield generation, security. This potent combination makes it a tough competitor and market leader.
The protocol’s novel take on yield generation and staking is what distinguishes it from typical stablecoins. CAP’s mission is to provide the best stablecoin experience. It achieves this by outsourcing yield generation to professional institutions and securing those activities with Ethereum restaking. If CAP Money finds success, we could see a much broader adoption of type 3 stablecoins. This transition is likely to catalyze even more innovation in the decentralized finance (DeFi) ecosystem.
