Sources of Yield

Exogenous Yield

Exogenous yield refers to returns generated from sources external to the protocol itself, meaning they don’t rely on actions like borrowing, trading, or other usage of the protoco. Instead, exogenous yield taps into opportunities from outside economic activities, markets, or systems, capturing value that exists independently.

In crypto, there is a wide spectrum of exogenous yield, coming from a variety of sources. Some stablecoin protocols have tapped into a portion of exogenous yield, such as T-Bills and funding rate arbitrage. However, no stablecoin protocol has tapped into the full spectrum of this source of value.

Full-Spectrum Exogenous Yield

CAP taps into the full-spectrum of yield that can be generated natively in crypto, without the need of custodians or offchain legal agreements. CAP relies on a large set of agents to execute various strategies, which change as markets evolve.

A large part of initial agents are expected to be market makers, MEV actors and RWA protocols, as these parties have already reached out to and invested in CAP.

However, the agent set is meant to be large and diversified. This will result in the best outcome for CAP's yield. Existing DeFi protocols, such as yield-bearing stablecoins with specific strategies, can join CAP as agents, benefiting their individual business models.