Solution: CAP

CAP is a stablecoin engine to break users free from the cycle of endogenous models. It does this without having to resort to suboptimal TradFi solutions and predatory token pumping designs.

CAP’s stablecoin engine will produce redeemable stablecoins of various denominations, such as USD, BTC, and ETH. Their goal will be to democratize access to what was previously only available to a few sophisticated and already-wealthy actors. This includes the full spectrum of yield, such as arbitrage, MEV, and RWAs.

At no point are users directly exposed to custodians, centralized exchanges, bridges, or other infrastructure related to yield generation. CAP leverages a novel implementation of shared security networks to underwrite the risk of these operations. Malicious or otherwise unwanted activity by agents results in slashing, to the benefit of stablecoin holders.

Below is a high level overview of how CAP works.

1. Yield

   CAP stablecoins are designed to deliver competitive yield in any market situation. Due to their competitive agent model, strategies constantly shift as markets evolve. Stablecoins holders only need to choose which denomination of stablecoin they want to hold, and yield is produced on the backend.

2. Scalability

   A competitive network of agents will execute yield based on independent strategies. These strategies will have to continually adapt to market conditions in order to beat the median benchmark yield rate established by agent performance. This will allow CAP to perpetually offer competitive yield at scale and regardless of market conditions. Given that the protocol does not rely on slow infrastructure like offchain legal agreements and internal human dependencies, CAP is prepared to scale with deposit growth.

3. Stability

   CAP stablecoins are redeemable for the collateral that backs them. Users will choose what denominations and collateral baskets they wish to be exposed to. This ensures predictable stablecoin prices and a variety of directional exposures.

4. Censorship resistance

   CAP is pioneering a new use case for shared security networks like EigenLayer. By leveraging the coverage model of security delegations, CAP will shield end users (stablecoin holders) from the risk of yield generation by agents. This novel arrangement will result in restakers and agents collaborating to vet the risks and rewards of all strategies fueling value creation at CAP.