Executive Summary
Yield Trading (YT) strategies are dominating the DeFi narrative, with complex point systems and leverage mechanics offering staggering potential returns. Recently, Pendle Intern shared a compelling strategy for Cap's cUSD YT. However, HighCrypto Research suggests there might be an even more efficient play using stcUSD.
This report dissects both strategies to help you navigate the risk/reward landscape.
Pendle Intern's Alpha: The Case for cUSD YT
Pendle Intern recently highlighted the potential ROI of Cap's cUSD YT, emphasizing two key edges:
- Double Point Efficiency: Exclusive multiplier for Pendle users.
- 33x Leverage: Massive exposure efficiency.
ROI Projections (cUSD YT)
The thesis assumes a $1,000 starting capital effectively gaining exposure to $32,800 worth of cUSD due to leverage. With the 2x point multiplier, this is equivalent to holding $65,400 in cUSD.
Projected Scenarios (FDV Based):
| Case | Assumed FDV | Est. Return ($) | ROI (%) |
|---|---|---|---|
| 🐻 Bear | $250M | $1,307 | 30.76% |
| 🎪 Base | $500M | $2,615 | 161.53% |
| 🐮 Bull | $750M | $3,922 | 292.29% |
*Based on FDV:TVL ratios of 33%, 66%, and 100%.
HighCrypto's Opinion: The stcUSD Advantage
While Pendle Intern's analysis is solid, our team sees a potentially more capital-efficient play: stcUSD YT.
The critical difference lies in the Yield. cUSD YT pays no underlying interest—your principal simply decays to zero by maturity. In contrast, stcUSD offers an APR (~9.82%), allowing you to recoup a significant portion of your initial capital.
Why stcUSD Could Win
Let's compare the math using the same Bear Case ($250M FDV) assumptions ($1,000 Initial Investment):
Option A: cUSD YT
- Principal Cost: -$1,000 (100% Decay)
- Airdrop Return: +$1,307
- Net Profit: +$307
- ROI: 30.7%
Option B: stcUSD YT
- Principal Cost: -$1,000
- Yield Recovered (80%): +$800
- Effective Cost: -$200
- Airdrop Return (1/4x): +$326
- Net Profit (Est): +$126
- Effective ROI: ~140%*
*Effective ROI calculated on risk capital ($200). Even with a lower multiplier (5x vs 20x), the ability to recoup ~80% of principal via yield makes stcUSD significantly more capital efficient.
"While cUSD offers higher raw leverage, stcUSD provides a safety net through yield. For varied portfolio strategies, minimizing effective cost often outperforms maximizing raw exposure. We recommend reading Pendle Intern's thread for context, but consider your risk preference carefully." — HighCrypto Research Team
Conclusion
Both strategies offer compelling asymmetrical upside if Cap executes its vision. Understanding the mechanics—specifically Points Multiplier vs. Principal Decay—is key to choosing the right instrument for your portfolio.
Disclaimer: This is not financial advice. NFA. DYOR.
