Lender: total interest rate
Underwriter: collateral & real yield
Desglose completo
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Two roles, two completely different risks
Cap splits what most lending protocols bundle into one role (lender = risk-taker) into two separate parties. Lenders who mint cUSD get a yield that is explicitly decoupled from any single strategy's performance — it's built from a protocol floor, a utilization-driven component, and a premium the borrower pays regardless of outcome, not from the raw PnL of whatever the borrowed capital is doing. That's structurally closer to a money-market deposit rate than to a DeFi vault share.
Underwriters are the ones actually underwriting credit risk — they choose which borrower to back, set that borrower's terms themselves, and post collateral worth more than the loan (200% in Cap's own worked example) against it. If the borrower defaults, the Underwriter's collateral gets liquidated automatically to make the Lender whole, and Cap's documentation describes a legal right of recovery against the borrower on top of that — a recourse layer closer to traditional credit insurance than typical on-chain liquidation.
The quoted premium rate is not the Underwriter's real yield: because the collateral posted is larger than the loan, the actual return on the Underwriter's own capital is diluted by the collateralization ratio, and that return still needs to beat what the same collateral could earn doing something else before the extra default risk is worth taking on.
Preguntas frecuentes
What is Cap Protocol and how is cUSD different from Ethena's sUSDe or Resupply's reUSD?
Cap is a stablecoin protocol (backed by Franklin Templeton and RockawayX in its seed/strategic rounds) that splits yield generation from risk-bearing into two separate roles instead of one. Lenders deposit USDC/USDT to mint cUSD and earn a protocol-set benchmark rate, independent of any single operator's performance. Agent operators borrow that pooled capital to run yield strategies. Restakers/Underwriters separately post EigenLayer or Symbiotic-delegated collateral to back specific operators, earning a premium for taking on that operator's default risk. That is structurally different from Ethena (delta-neutral basis trade funds the yield directly) or Resupply (collateral is itself already yield-bearing before borrowing) — Cap's lender yield is explicitly decoupled from strategy risk by a dedicated underwriter layer standing in between.
How is the lender's total interest rate actually calculated?
Per Cap's documentation, Total Interest = Minimum Rate + Utilization Rate + Underwriting Premium. The Minimum Rate is the higher of a protocol-set Benchmark Rate or a Market Rate pulled from external lending oracles. The Utilization Rate follows a piecewise-linear curve with a kink at 90% pool utilization — below the kink, the rate rises gently with a Slope 1 per 100% utilization; above it, the rate rises much faster with a steeper Slope 2, standard money-market design to discourage draining the pool near full utilization. The Underwriting Premium is a fixed annual rate the borrower (agent operator) pays to whichever Underwriter is backing them, and that premium is added on top, not blended into the base rate.
What does an Underwriter actually put up, and what happens if their borrower defaults?
Cap's financial-guarantees documentation describes Underwriters escrowing collateral at a ratio they set per borrower — the protocol's own worked example uses 200% overcollateralization ($200M in ETH backing a $100M loan). Each Underwriter has full agency over risk-reward: they assess the borrower's credit and set that borrower's LTV themselves, so the ratio is not a single protocol-wide constant. If the borrower defaults, the system triggers immediate automated liquidation of the Underwriter's collateral to make the Lender whole first — and the Underwriter additionally holds a legal right of recovery against the defaulting Borrower for any shortfall beyond what the collateral covered, which is a traditional-finance-style recourse layer most on-chain lending protocols do not have.
Why would an Underwriter's real yield be much lower than the premium rate they quote?
Because the premium is paid on the loan size, but the Underwriter has to lock up collateral worth more than the loan (200% in Cap's own example) to back it. A 6% annual premium on a $100M loan is $6M/year — but if that premium required locking $200M in collateral, the Underwriter's actual yield on their own capital is roughly 3%/year, not 6%, before accounting for the opportunity cost of what that ETH could have earned doing something else and the tail risk of total loss on default. The calculator above separates the quoted premium rate from the Underwriter's real yield-on-collateral so the gap is explicit, not hidden in marketing copy.
Is this the same slashing risk as a normal EigenLayer AVS restaker?
No, and conflating them is the most common mistake. A normal AVS restaker (see our restaking slashing calculator) is slashed automatically by on-chain protocol rules for provable misbehavior like double-signing or downtime — a mechanical, code-enforced penalty. Cap's Underwriter model layers a second, separate failure mode on top: even with perfect uptime, the Underwriter's collateral is liquidated if the specific agent/borrower they chose to back defaults on the loan itself — a credit-risk decision the Underwriter made, not a slashing-condition violation. You can be a perfectly honest, always-online restaker and still lose your Underwriter collateral entirely if you backed the wrong operator.