Yield Generation

Solidus's synthetic dollar protocol goes beyond just stability. It offers users a yield-generating asset: $sSUSD, which is the staked version of $SUSD. When you stake $SUSD to get $sSUSD, you access a diverse and sustainable income stream generated by the protocol's activities. This turns a stablecoin into a passive income source. This yield creation uses the special mechanics of delta-neutral hedging and Solana's ecosystem, providing returns without rehypothecation or unnecessary risk. Here’s a detailed look at how $sSUSD generates value for its holders.

Staking Process

To stake, users deposit $SUSD into Solidus’s Solana staking contract. In return, they receive $sSUSD, with a ratio determined by the protocol's Token Vault system. Unlike $SUSD, which holds a firm $1 peg, $sSUSD grows in value over time as protocol revenue is distributed. Your staked $SUSD remains untouched – it’s never lent out or rehypothecated. This ensures that all yields come directly from Solidus’s own operations, aligning with our risk-averse approach.

Revenue Sources

The protocol earns income from three unique and complementary sources. These earnings are pooled together and then distributed to $sSUSD holders.

• Funding Rates from Perpetual Futures: Our delta-neutral hedging strategy uses short perpetual futures positions to stabilize $SUSD. These "shorts" collect funding rates. These are regular payments from long traders to short traders, especially when market demand for leverage is high. Historically, funding rates for assets like SOL, BTC, and ETH have averaged 7-13% annually (e.g., 9% for SOL and 11% for BTC in 2024). This provides a strong main income source. In strong bullish markets, these rates can surge, significantly boosting yields.

• Liquid Stablecoin Rewards: Part of our backing assets includes liquid stablecoins, such as USDC. These earn fixed yields from external platforms. For example, Coinbase's 2024 loyalty program has offered steady returns on USDC deposits. These yields, usually between 2-5%, provide a stable, low-risk boost to Solidus's revenue, balancing the more volatile funding rates.

• SOL Staking Consensus Rewards: Some of the backing SOL assets are staked directly within Solana’s proof-of-stake network. This earns consensus-layer rewards, which historically range from 3-6% annually. These rewards depend on network activity and participation. They provide a native yield that uses Solana’s own infrastructure, without adding leverage or outside dependencies.

Distribution Mechanism

Revenue is collected daily and distributed directly into the $sSUSD staking pool using a Token Vault model, similar to Rocketpool’s rETH. The $sSUSD token’s value grows compared to $SUSD as rewards build up. This means holders can unstake and receive more $SUSD than they initially deposited. For example, if you stake $100 in $SUSD into $sSUSD, and the protocol generates a 10% annual yield, you could unstake $110 in $SUSD after one year. These distributions happen smoothly on Solana, with minimal gas fees, so your returns aren't significantly reduced.

Yield Protection and Sustainability

Funding rates can indeed fluctuate, even turning negative in bear markets. However, Solidus protects $sSUSD holders, aiming for positive or at least flat yields. How? Through a 5% reserve fund taken from $SOLID’s total supply. This fund covers any losses during periods of negative funding, preventing them from affecting stakers. Historically, funding rates tend to remain positive over time due to consistent demand for long leverage in crypto markets. This helps support sustainable yields, which have averaged up to 18% APY (based on 2024 data from similar projects).

Scalability and Composability

Our yield generation grows as more $SUSD is adopted. Larger backing pools mean more perpetual futures positions and greater staking capacity. $sSUSD is designed to be composable across Solana’s DeFi ecosystem. You can use it in lending protocols, liquidity pools, or even cross-chain applications via bridges like LayerZero. This significantly boosts its utility while still earning rewards.

$sSUSD's yield generation transforms $SUSD from a static stablecoin into a dynamic, income-generating asset. Holders earn passive income without sacrificing the protocol's core stability. By smartly combining funding rates, stablecoin rewards, and SOL staking, Solidus offers a powerful value proposition, making $sSUSD a truly distinct and attractive feature in the DeFi landscape.