Capitalization Framework
Apyx publishes two distinct metrics on the transparency dashboard that govern every interaction with the protocol.
Redemption Value
The price at which all redemption occurs, with a small spread for liquidity and slippage. Redemption Value tracks the underlying basket of preferred shares and cash, dampened by the cash portion of the reserve. It applies identically across calm and stressed conditions, and to all participants.
New apxUSD issuance is always priced at $1, providing a consistent anchor for secondary markets.
Total Collateral Value
The full value of the reserve, including the overcollateralization buffer.
The gap between Redemption Value and Total Collateral Value is the buffer, visible to everyone at all times.
How apxUSD Trades
In practice, apxUSD trades between Redemption Value and Total Collateral Value:
Redemption Value acts as a hard floor where arbitrageurs step in.
The overcollateralized reserve supports pricing above it.
Role of the Overcollateralization Buffer
The overcollateralization buffer is not consumed during routine redemptions. It serves two purposes:
Risk reduction without sacrificing yield. The buffer is allocated to preferred equity, with the yield it generates flowing to the rest of the portfolio. As the buffer grows, the remainder of the collateral can shift toward cash while maintaining the same yield output—reducing volatility without compromising returns to apyUSD holders.
Final backstop. In a catastrophic scenario—a devastating hack, wind-down, or any event ending the protocol's future viability—Total Collateral Value becomes the redemption value, and the entire reserve, buffer included, is distributed pro-rata to remaining holders.
Governance token holders may also vote to deploy a portion of the overcollateralization buffer in intermediate-risk scenarios to support Redemption Value.
RFQ Redemption
In addition to the protocol's primary-market redemption pathway, Apyx offers a Request for Quote (RFQ) redemption system. Users may submit redemption requests through a structured RFQ process, allowing approved counterparties to provide competitive execution against the underlying reserve.
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