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Optimizing Treasury With A Yield-Bearing Stablecoin: The Morpho Case Study

The Morpho Association β€” a French nonprofit entity grouping the main contributors and users of the Morpho lending protocol β€” just added $500,000 in stUSD to their treasury allocation. The Angle yield-bearing stablecoin enables the Morpho Association to benefit from a reliable and stable asset while earning a secure yield.

β€œWhy not diversify our treasury with a stable asset generating a secure yield?”

This was the question that the Morpho Association considered before adding $500,000 in stUSD (staked USDA) to their treasury allocation this June. Indeed, the stUSD stablecoin offers everything one could hope for in reserve assets: passive yield, liquidity, accessibility, and stability.

Earn a passive yield, no need to do anything

stUSD is a yield-bearing version of the Angle USDA stablecoin. With stUSD, holders easily and passively earn a dollar yield on their stablecoins.

No need to do anything. The yield earned by holding stUSD is directly reflected in the token value. No airdrops, no claiming, no transactions required! Angle handles everything!

Well, but where does this yield come from?

The yield allocated to stUSD holders comes from the returns generated by the assets held by Angle Protocol (DeFi yield-bearing assets, RWAs such as tokenized T-bills,…) that are redistributed to its holders.

By combining yields from various sources, both from traditional finance (TradFi) with RWAs and decentralized finance (DeFi) with DeFi assets and borrowing interest, stUSD offers the Morpho Association the highest risk-adjusted yield β€” 19% average APY in the last 30 days.

With $500,000 in stUSD in their reserves, the Morpho Association is earning $8,000 per month without lifting a finger!

A safe and competitive yield to boost your reserves

19% APY? How can it be so high while still being secure?

stUSD holders like the Morpho Association receive yield from the entire USDA backing. However, not all USDA stablecoins are deposited into stUSD. It means that few people (stUSD holders) receive the yield from all USDA stablecoins in circulation.

Thanks to this multliplier/boosting effect, the Morpho Association can earn higher yield than what they'd be earning themselves by doing the same strategy!

Exchange your stUSD at anytime, instantly, 0 fees

The Morpho Association chose stUSD for its yield, but also for its liquidity. stUSD is permissionless. Holders can get in instantly. It’s as simple as a swap. There is no minimum deposit, no lockup period, no deposit fees, no withdrawal fees. And holders earn rewards from day one.

DAO and companies holding stUSD in their treasuries can also get out, anywhere, anytime. No risk of being locked. Exiting is as simple as swapping assets. And there is 0 fees.

Stability and reliability for your treasury

Beyond its yield-generating capabilities and liquidity, stUSD stands out as one of the most reliable stablecoins in the market.

stUSD is fully backed and over-collateralized with real assets in the reserves (contrary to algorithmic stablecoins). Anyone can redeem their stUSD stablecoins for collateral in the reserves.

Additionally, stUSD is reinforced by an equity buffer as an added layer of protection. It means that collaterals would still be left in the Protocol even if all stakeholders redeem their stUSD.

No deposit risk with stUSD!

Moreover, stUSD is designed to withstand any adverse market condition. The stablecoin maintains its peg with the US Dollar thanks to advanced price stability mechanisms.

stUSD management framework, created in August 2023 and continuously refined, draws upon three years of research & development on EURA and insights gained from recent stablecoin depeg incidents such as USDC in March 2023.

"stUSD emerged as a natural fit in our treasury diversification strategy. With its price stability mechanisms and yield generation features, it has become a top choice for those seeking low-risk yield exposure,” said Paul Frambot, CEO of Morpho Labs.

stUSD becomes an obvious choice when seeking to diversify treasury holdings while accessing a secure but competitive yield, like the Morpho Association. stUSD is robust, with no depeg risk, and is fully backed. Plus, holders can enter and exit whenever they want, they will never be locked in.

The Morpho Association is a prime example of integrating stUSD into its reserves, a practice that shouldn't be confined to DeFi protocols alone. DAOs, institutions, market makers β€” all stand to benefit from integrating stUSD into their portfolios.

So if you're as savvy as the Morpho Association, consider adding some stUSD to your reserves!

Get more info on the stUSD yield-bearing stablecoin in this article.

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