cap
Rejected venues wait the longest for re-review; a rejection has to earn another look before the scheduled date.
Cap issues reserve-backed cUSD and yield-bearing stcUSD. DefiLlama recorded about $283M on 2026-08-14, so the inherited below-materiality basis was false. stcUSD yield is funded by loans to whitelisted institutional operators that execute proprietary strategies; restaker collateral can be slashed and auctioned after default. That onchain recourse is meaningful, but it does not make the operators’ strategies or repayment capacity inspectable. The aggregate is therefore an off-chain-credit class application, not a claim that cUSD is presently impaired.
- Publishes operator-level exposures, enforceable strategy limits, loan terms, live collateral coverage, realized defaults and stressed-redemption results sufficient to underwrite the credit
The research file
Mechanism
Users mint cUSD against a reserve basket and may stake it for stcUSD. Idle reserves can earn through integrated money markets. Whitelisted operators obtain reserve loans after securing delegations from restakers, execute proprietary strategies, and owe a hurdle rate plus restaker premium; stcUSD captures the lender return.
Control and loss waterfall
Cap whitelists operators and sets reserve, rate and liquidation parameters. If an operator defaults or collateral breaches its threshold, the protocol slashes delegated stake and sells it by Dutch auction for reserve assets. Published defaults include an 80% liquidation threshold, 12-hour grace period and 10% liquidator bonus. Recovery still depends on collateral value and auction execution during stress.
Exit consequences
A cUSD holder can request the current proportional reserve basket rather than an unconditional cash claim; reserve composition and available liquidity determine what is received. stcUSD must first unwind to cUSD. When reserves are lent out, operator repayment or liquidation replenishes the reserve, so a correlated operator loss and collateral decline can delay or haircut practical exit.
Why the class rule decides
The yield-bearing claim finances named-but-whitelisted institutions whose proprietary trading books are not visible onchain. Restaker overcollateralization changes recovery priority, not the source of repayment risk. That is within the off-chain-credit rule. Review reopens with operator-level exposure, enforceable strategy limits, live collateral coverage, loan terms, realized defaults and stressed redemption outcomes.
Sources
The claims above trace to these. Where a number could not be independently verified, the thesis says so.
- Cap Docs — stcUSD lending mechanics · primary · accessed 2026-08-14
Supports: operator loans, proprietary strategies, restaker collateral, default waterfall - Cap Docs — lending and liquidation parameters · primary · accessed 2026-08-14
Supports: liquidation threshold, grace period, target health, liquidator bonus - Cap Labs — published audit repository · primary · accessed 2026-08-14
Supports: published security reviews, review scope - DefiLlama — Cap survey record · secondary · accessed 2026-08-14
Supports: survey TVL, reserve composition, borrowed amount
Inherited controls
The verdict above grades the protocol layer. Every position also inherits the asset it holds and the chain it settles on. The least safe layer sets the position’s grade, and the position table names which one that is.
| Chain | Verdict | Grade | Control constraint |
|---|---|---|---|
| Ethereum | Approved | sovereign | No sequencer, no upgrade key, no operator who can be compelled — rule changes require social consensus. |