Connect with us
DAPA Banner

Crypto World

DeFi traders are stacking risks on top of Strategy’s risky STRC

Published

on

DeFi traders are stacking risks on top of Strategy’s risky STRC

Strategy (formerly MicroStrategy) already pays 11.5% annualized dividends on its ultra-risky Stretch (STRC) but DeFi users are now adding risks and leverage to crank that up to 39%.

In finance, interest rates are often dictated by the risk of total loss. With very few exceptions, when someone offers a higher interest rate, it’s because they’re much more likely to not pay you back.

Unbothered, traders are now re-routing Strategy’s dividend payouts through multiple blockchain protocols to manufacture yields of double, triple, or more what STRC actually pays.

They add future obligations in exchange for near-term payouts, take advantage of temporary incentives for obscure DeFi protocols, and add exotic forms of leverage to amplify the notional exposure of an otherwise small investment.

Advertisement

In the curious underworld of tokenized STRC, there are at least five protocols offering the financial machinery for DeFi yield farmers, not to mention the risks of the custodians and technology providers involved with these protocols.

A daisy-chain of DeFi risks to amplify STRC

Apyx wraps roughly $136 million of STRC into a synthetic stablecoin-like token called apxUSD. Saturn packages approximately $85 million worth of STRC into its USDat product. Another tokenization protocol xStocks put approximately $53 million worth of STRC on-chain. 

Meanwhile, Pendle Finance splits these STRC tokens and the dividends paid to STRC stockholders into separately tradable, fixed-rate and floating-rate components, and Morpho provides the loan-looping mechanism at the end to add even more financial leverage on these instruments.

Depositing assets to borrow these tokens, which trade under a variety of ticker symbols like STRCx, apyUSD, apxUSD, USADT, sUSADT, strcUSX, traders borrow tokens, re-deposit some portion of those loan proceeds to take out more loans, re-deposit some portion of those loan proceeds to take out more loans, and so on.

Advertisement

The more loops and the smaller the range of prices that a user collateralizes, the higher the probability that the protocol will forcibly liquidate the position.

Irresponsible dividends, amplified

The base yield of STRC with no tokenization whatsoever is already extreme. STRC pays 11.50% annualized, roughly 450 basis points above the average junk bond.

Indeed, Strategy has hiked its dividend rate seven times since launching STRC at 9% in July 2025. 

Each hike tacitly admitted that demand at the prior rate was too weak to hold up STRC’s secondary trading on Nasdaq at its intended $100 per share.

Advertisement

Read more: We calculated the present value of STRC — it’s bad for MSTR

Rather than ease up on leverage in light of the thinning air, DeFi’s response has been to treat 11.5% as a stable case on which to construct even higher artifices.

Apyx Finance closed a $300 million valuation round in February as a self-described dividend-backed stablecoin protocol.

It issues apxUSD backed by STRC and a related preferred like Strive’s STRC-like SATA, with apyUSD as the yield-bearing version of the same claim. Saturn Credit raised $800,000 from Sora Ventures and Changpeng Zhao’s YZi Labs in January to run the same play through USDat and sUSDat.

Advertisement

Both of these STRC tokenizers wrap their resulting tokens into Pendle, where PT-apyUSD locks in fixed yields of roughly 14.84%.

Users then deposit those PT tokens on Defi protocol Morpho as collateral to borrow USDC at rates as low as 1.59%.

The arithmetic isn’t subtle. A 5x leverage loop landed on a 64% APY. A separate analyst account documented 39% APY.

Hoping and praying STRC never de-pegs for long

On April 14, STRC was approaching its monthly dividend snapshot date, going “ex-dividend” in the parlance of Wall Street, causing its price to decline. That sag dragged sUSDat’s exchange rate below the high-water mark Pendle uses to govern yield accrual for the Saturn token. 

Advertisement

Pendle had to explain this basis phenomenon to its users. “Yield accrual on YT-sUSDat is currently paused due to STRC’s ex-dividend event on 14 April, which pushed the exchange rate below the watermark,” it said.

It reassured holders that “If STRC recovers to $100, the watermark is recaptured, yield accrual resumes, and your total earnings will be ultimately unaffected.”

As always, the conditional “if” is doing a lot of heavy lifting.

Indeed, if STRC trades near $100 and pays dividends near 11.5% forever, everything will work out wonderfully.

Advertisement

In fact, STRC fell to $90.52 on November 21, 2025, and to $93.10 in February 2026. That’s why the dividend rate is where it is. It shouldn’t be a mystery as to why Strategy needs to pay such as higher dividend rate.

Unfortunately for STRC traders in DeFi, neither is guaranteed. The quasi-peg has already failed twice in the last six months. Moreover, Strategy’s board of directors can cut the dividend at its discretion.

DeFi traders are also exposed to countless numbers of protocol, blockchain, smart contract, and custodian risks that multiply these risks even higher.

Got a tip? Send us an email securely via Protos Leaks. For more informed news, follow us on X, Bluesky, and Google News, or subscribe to our YouTube channel.

Advertisement

Source link

Continue Reading
Click to comment

You must be logged in to post a comment Login

Leave a Reply

Crypto World

Polymarket and Kalshi Are Both Set to Launch Perp Trading

Published

on

the-defiant

Polymarket announced early access for perpetual futures trading, while The Information reported that Kalshi is planning a similar product launch.

The two largest prediction market platforms by trading volume are both moving into perpetual futures trading, per reports arriving within hours of each other on Tuesday, April 21.

Polymarket’s move is official. The on-chain prediction marketplace posted on X Tuesday evening: “Perps are coming to Polymarket.” The platform is accepting early access sign-ups for the product, which will allow traders to take leveraged long or short positions on assets including BTC, stocks, and gold without a fixed expiration date.

Separately, The Information reported on Tuesday morning that Kalshi plans to launch crypto trading, beginning with perpetual futures, citing people familiar with the matter.

Advertisement

According to the report, Kalshi will start with crypto perps and may expand to perps tied to other asset classes over time.

Perp trading has exploded in popularity over the past year, notably on decentralized platforms, mostly led by Hyperliquid. But centralized platforms, led by Binance, still dominate in terms of volumes and open interest, per CoinGecko data.

the-defiant
Monthly perp DEX combined volume and OI. Source: DefiLlama

Commodity Futures Trading Commission Chairman Michael Selig said last month that the agency plans to allow regulated perpetual futures in the United States, to attract trading volume back from offshore platforms.

The Information’s report notes that Kalshi recently secured a CFTC margin trading license, positioning it to offer the product.

The move would put both Polymarket and Kalshi in more direct competition with both centralized and on-chain exchange platforms, several of which, like Coinbase, have begun adding prediction markets.

Advertisement

Combined monthly trading volumes on Kalshi and Polymarket last month reached over $23 billion, an all-time high. Since the start of this year, both platforms have consistently seen near or over $2 billion in trades each week, per Token Terminal data.

Regulatory Questions

The launches come amid rapid regulatory change for the sector. The CFTC launched a sweeping review of prediction markets in March, after Chair Selig clarified that the agency thinks such platforms should be regulated federally, not by each state. At the same time, both platforms continue to face state-level legal pressure, as gambling is a state-regulated activity in the U.S. and multiple states have alleged that the platforms need gambling regulator licenses to operate in the state.

This article was written with the assistance of AI workflows. All our stories are curated, edited and fact-checked by a human.

Source link

Advertisement
Continue Reading

Crypto World

Lazarus Group Malware Targets Crypto, Business Execs via macOS

Published

on

Lazarus Group Malware Targets Crypto, Business Execs via macOS

Security researchers have linked a new macOS malware campaign to the Lazarus Group, the North Korea-linked hacking operation behind some of the crypto industry’s biggest thefts.

Flagged on Tuesday, the new “Mach-O Man” malware kit is distributed via “ClickFix” social engineering schemes across traditional businesses and crypto companies, according to Mauro Eldritch, offensive security expert and founder of threat intelligence company BCA Ltd.

Victims are lured into a fake Zoom or Google Meet call where they are prompted to execute commands that download the malware in the background, allowing attackers to bypass traditional controls without detection to gain access to credentials and corporate systems, the security researcher said in a Tuesday report.

Researchers said the campaign can lead to account takeovers, unauthorized infrastructure access, financial losses and the exposure of critical data, underscoring how Lazarus continues to expand its targeting beyond crypto-native companies.

Advertisement

The Lazarus Group is the main suspect in some of the largest-ever cryptocurrency hacks, including the $1.4 billion hack of Bybit exchange in 2025, the industry’s largest so far. 

Fake Mach-O Man Kit apps. Source: ANY.RUN

“Mach-o Man” kit seeks to implement hidden stealer malware

The final stage of the campaign is a stealer designed to extract browser extension data, stored browser credentials, cookies, macOS Keychain entries and other sensitive information from infected devices.

Final staging director for Stealer malware. Source: Any.run

After collection, the data is archived into a zip file and exfiltrated through Telegram to the attackers. Finally, the malware’s self-deletion script removes the entire kit using the system’s rm command, which bypasses user confirmation and permissions when removing files.

The novel malware kit was reconstructed by the security expert through cloud-based malware sandbox Any.run’s macOS analysis capabilities.

Related: CZ sounds alarm as ‘SEAL’ team uncovers 60 fake IT workers linked to North Korea

Earlier in April, North Korean hackers used AI-enabled social engineering schemes to steal about $100,000 worth of funds from crypto wallet Zerion, after gaining access to some team members’ logged-in sessions, credentials and the company’s private keys, Cointelegraph reported on April 15. 

Advertisement

Magazine: 53 DeFi projects infiltrated, 50M NEO tokens could be ‘given back’: Asia Express