Suppliers
Suppliers can permissionlessly deposit USDC to mint either USD3 or sUSD3.
Suppliers can also permissionlessly stake USD3 for sUSD3 (ERC-4626) which gives holders levered yield on the pool of credit lines while absorbing first-losses in the case of defaults, net recoveries. sUSD3 is subordinate debt to USD3 and has a cooldown period before it can be withdrawn for USDC. sUSD3 is capped at 15% of the pool.
In phase 1, USD3 is a fully liquid USDC receipt - no native pool yield. sUSD3 is the junior first-loss yield-bearing asset with a 1-month lock that backstops credit, gates early risk, and accrues all native yield across the pool - both on Aave deposits and unsecured yield. In phase 2, USD3 transposes into a senior tranche earning native yield and sharing liquidity according to the tranche ratio, while sUSD3 stays first-loss with the same lock and earns junior yield.
Phase 1 — Risk-Off Bootstrap
Backing/Deployment: USD3 fully backed by Aave/idle reserves; drawdowns unwind Aave.
USD3 Liquidity: On-demand, limited only by Aave liquidity.
USD3 Yield: None.
sUSD3 Liquidity: 1 month lock. Redeemable only if idle cash in sUSD3 tranche (sUSD3 TVL - outstanding credit).
sUSD3 Yield: Receives 100% net interest in Phase 1 - including Aave yield + unsecured yield. Varies with utilization and losses.
Debt Cap: Credit ≤ sUSD3 TVL.
Tranche/Waterfall: Roles implicit (senior liquidity vs junior first-loss); no explicit 85/15 yet.
Phase 2 — Risk-On
Backing/Deployment: Pooled credit; Aave only for idle cash.
USD3 Liquidity: Liquidity up to tranche ratio floor invariant (ex: 85 senior / 15 junior).
USD3 Yield: Earns native senior yield (plus any residual on idle).
sUSD3 Liquidity: Still 1-month lock, first-loss.
sUSD3 Yield: Junior residual after paying the senior rate and fees; higher expected but volatile and subordinated (drawdowns hit sUSD3 first).
Debt Cap: Can scale up to USD3 TVL.
Tranche/Waterfall: Explicit 85/15 governs liquidity and interest; losses hit sUSD3 before USD3.
TVLs are approximate and not reflective of the exact KPIs required to begin phase 2.
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