Yield Distribution

How the protocol receives rewards

Protocol Revenue Explanation

Yield is sourced from preferred shares and U.S. treasuries held offchain in custody. For example, STRC pays dividends at an annualized rate of 12% and SATA at an initial rate of 13%, with dividends paid monthly in cash. These proceeds are converted into apxUSD and credited to the apyUSD vault via the YieldDistributor.

Distribution Mechanism

Yield credited to vaults (payout to apyUSD or aptUSD) utilize a linear vesting mechanism implemented by the LinearVestV0 contract. Instead of a single lump-sum distribution, yield is streamed continuously over a configurable period (e.g., 20 days).

The yield rate is set in dollar terms, e.g. $1M of yield will be paid in real time. Yield is paid across all aptUSD and apyUSD not currently undergoing cooldown, meaning new apyUSD that is locked instantly begins receiving yield, reducing the overall % yield for everyone else. In the case of apyUSD, any apyUSD that enters the cooldown phase is removed from the pool set to receive yield, meaning the remaining apyUSD receive a higher % yield.

This structure supports protocol stability (potentially at the expense of growth), by creating a slower expansion and contraction curve.