Immy Dorse 
Well, it seems Cap Labs’ new stablecoin, cUSD, is off to a pretty strong start. According to data from DefiLlama, its circulation has shot up to nearly $68 million in just the past week. That’s a lot of movement for something so new. Etherscan also shows it already has over 2,700 holders. People are clearly paying attention.
But what’s driving the interest? I think it’s their model. It’s a digital dollar, but it’s built to also generate yield. It’s not directly paying out interest itself, which is a key distinction. The whole thing runs on their new Cap Stablecoin Network.
How It Works (And Avoids Regulatory Trouble)
The basic cUSD token is designed to be a simple 1:1 stablecoin. It’s backed by other big-name, regulated stablecoins like PayPal’s PYUSD and funds from BlackRock and Franklin Templeton. That part seems straightforward.
The yield part is trickier, and where it gets interesting. If you stake your cUSD, you get a different token called stcUSD. That’s the one that can earn yield, which is apparently floating around 12% right now. The yield isn’t coming from Cap Labs itself. It’s generated through a kind of marketplace where operators borrow the stablecoins to try and generate returns, and restakers act as a backstop, underwriting the credit risk.
This structure seems to be a direct response to the new US stablecoin rules, the GENIUS Act. The law is pretty clear: payment stablecoins can’t pay yield to regular people. Cap Labs founder Benjamin Lens was frank about it at a conference in June. He said they’re not generating yield on behalf of users; they’ve built an open protocol where the yield mechanism happens between other parties. It’s a subtle, but perhaps important, difference.
The Role of Restaking and Financial Risk
This is where things tie into the bigger trend of restaking, specifically on EigenLayer. Traditionally, services built on EigenLayer were about infrastructure—things like data oracles or bridges. The risk was about a service going offline or being incorrect.
Cap represents something new: using the system to underwrite financial risk. EigenLayer’s founder pointed out that this is a much different ballgame. It requires active monitoring because the stakes are purely financial. A recent upgrade to EigenLayer, called “redistribution,” helps make this possible. Instead of slashed funds just being burned, they can be sent back to the project that was affected, like Cap’s vault, which makes a lot more sense for a financial application.
It’s a complex setup. Some analysts have compared the restaker’s role to that in a credit default swap, providing a backstop against borrower default. It feels like we’re watching a new kind of on-chain financial structure get built in real-time. Whether it holds up and remains compliant, well, that’s the big question everyone will be watching.
