Problems
There are 3 major structural problems facing the stablecoin and onchain lending industries today: float revenue capture, supply centricity, and capital inefficiency. These problems originate from the concentration of economic benefits at the token issuer level and among passive supply-side market participants.
1. Float Revenue Capture
As of 2025, total float revenue generated by stablecoin issuers worldwide has surpassed $10 billion annually, largely dominated by Tether (USDT) and Circle (USDC). These interest earnings are primarily derived from collateral reserves held in short-term government securities, money market instruments, bank deposits, and cash equivalents. However, the majority of this float revenue is internalized by stablecoin issuers, creating a structural disparity in economic benefits between issuers and end users.
2. Supply Centricity
Supply centricity refers to traditional yield distribution models employed by most stablecoin and yieldcoin projects, where float revenue-based yield or rewards are allocated to token holders, including liquid stakers, LPs, and lenders, i.e., supply-side market participants. As a result, borrowers on the demand side are structurally under-incentivized. When borrower incentives do exist, they are typically derived from endogenous and inflationary token emissions rather than sustainable stablecoin incentives funded by exogenous float revenue.
3. Capital Inefficiency
While supply-side incentives can attract more capital, temporarily reducing costs and stimulating price-elastic credit demand, they cannot unlock marginal demand or sustain utilization once rates normalize. Moreover, yieldcoin borrowers incur higher effective interest expenses, as yield-accruing assets embed a greater cost of capital, making them structurally more expensive than vanilla stablecoin loans. The resulting capital inefficiency is most apparent in DeFi lending protocols, where:
- Incentivized stablecoin supply may expand lending liquidity but does not guarantee credit utilization, as borrower unit economics remain unchanged.
- Yieldcoins are primarily supplied as idle collateral rather than deployed as productive lending liquidity, since borrowers tend to avoid using them as a medium of credit.
- Borrower demand is concentrated in non-yielding stablecoins, reinforcing a structural separation between assets used for yield capture and assets used for credit transmission.
Solution
dTRINITY addresses the above structural problems through a novel design: using idle yieldcoins as collateral reserves to issue a demand-centric and borrower-friendly stablecoin. Float revenue is then externalized to the stablecoin’s borrowers as interest rebates (subsidies), rather than solely as yield to supply-side market participants.
By subsidizing borrowing costs with float revenue, dTRINITY shifts the demand curve upward, structurally increasing credit demand even at higher gross interest rates. This moves the market toward a new equilibrium that unlocks greater utilization and yields. Borrowers are able to pay lenders more in gross interest while still benefiting from competitive net borrowing costs after subsidies, creating a win-win dynamic for both sides of the market.
