What is Cap (CAP)?
Cap (CAP) is a DeFi protocol built around two on-chain instruments: cUSD, a dollar-pegged stablecoin, and stcUSD, its yield-bearing derivative. What distinguishes Cap is its decision to assign yield generation and risk underwriting to separate groups of participants. This creates a buffer that allows cUSD holders to earn returns without being directly exposed to the operational risks of the strategies that produce those returns.
How does the three-sided model split yield and risk?
Cap organises its users into three roles. First, there are minters who deposit regulated stablecoins to create cUSD and then stake it for stcUSD to capture yield. Second, there are operators — typically trading firms or market makers — who borrow from the protocol's reserve and must beat a smart-contract-enforced yield floor while deploying their strategies. Third, restakers on networks like EigenLayer or Symbiotic lock up capital to underwrite these operators. In exchange for a premium, restakers absorb the risk of operator default. If an operator fails, a portion of the restaked collateral is slashed and recovered to the reserve through a Dutch auction.
While capital sits idle in the reserve, it is routed to established lending protocols such as Aave or Morpho to generate a baseline return for stcUSD holders. The reserve basket includes regulated money-market fund tokens like BUIDL and BENJI, giving the protocol a distinctly institutional composition.
What role does CAP play if it isn't a stablecoin?
Unlike cUSD and stcUSD — which are designed to hold or grow dollar value — CAP is purely a governance token. Holding CAP means voting on reserve composition, collateral ratios, operator whitelisting, protocol fees, and the budgets of incentive programmes. Its total supply is capped at 10 billion tokens, with the ecosystem and community allocation representing roughly 48% of that total, a split that gives token holders meaningful influence over the protocol's direction.
