Franklin Templeton Leads $8 Million Seed Round into Cap
Other notable investors include financial institutions Susquehanna and Triton Capital, as well as crypto-native firms like Nomuras Laser Digital and GSR.
Follow-up to $1.1 Million Community Round
The seed funding follows Caps earlier $1.1 million community round on the crowdfunding platform Echo, created by Jordan Cobie Fish. Previous angel investors in Cap include influential figures from the MegaETH Mafia, such as venture capitalist Spencer Noon, LayerZero founder Bryan Pellegrino, and Blockworks founder Jason Yanowitz, along with investors from platforms like EtherFi, Steakhouse Financial, and Meteoria.
Leveraging EigenLayers Shared Security Marketplace
Cap is utilizing EigenLayers shared security marketplace, which enables users to repurpose security from staked assets across multiple platforms. While the protocol settles on Ethereum, Caps focus will primarily be on the MegaETH ecosystem, a nascent Ethereum Layer 2 designed as an alternative to the rollup-centric world.
Yield Generation and Market-Set Rates
Caps stablecoin protocol generates yield by tapping into the restaking market and returns from various operators such as high-frequency trading firms, private equity shops, DeFi protocols, and liquid funds. Minters deposit USDC or USDT to mint cUSD, which can then be staked for yield or used as a dollar-pegged asset. Operators can borrow this capital to execute yield-generating strategies, while restakers provide security by delegating locked ETH, earning premiums in return.
Institutional Borrowing and Loan Insurance
The protocol allows institutions like Franklin Templeton to borrow stablecoins from users while providing interest. Cap takes a 10% fee on the yield that users earn, which will fluctuate with market conditions. Additionally, borrowers are required to take out loan insurance to mitigate risks associated with borrowing.
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Text source: Coindoo
