Stackable DeFi Primitives
Stackable DeFi Primitives Unlock a New Liquidity Layer
“Structured Finance” is the process of abstraction: utilizing layers of liquidity mechanisms to achieve full risk transfer, like thermal dynamics but for finance, only achievable on-chain through stackable, composable DeFi primitives. USD.AI and the corresponding token representations (USDai and sUSDai) represent the latest progression of the legacy MetaStreet architecture & ecosystem around on-chain structured credit products.
Given the nature of capital market assets (low mark-to-market), USD.AI rebuilds the entire DeFi stack to be oracleless & made for capital assets rather than just money assets (spot market & oracle-based) designed around three pillars:
CALIBER — a framework for tokenization or Yield. Creating the ability to tokenize previously un-tokenizable assets
FiLo — a process for risk curation or Scale. Allowing future asset financing demand to be vetted and publicly funded
QEV — a system for liquidity or Redemption. Allowing fair and transparent access to liquidity
Below is a detailed timeline and evolution of these stackable DeFi Primitives:
Lending Without Price Oracles → CALIBER
Automatic Tranche Maker or "ATM" (like Uniswap v3 for oracleless swaps) enables oracleless lending for low-liquidity assets (NFTs, RWAs, etc)
Launched in 2023, reached $3mm TVL
Long-dated, Yield-Bearing Loans → QEV
Liquid Credit Token or "LCT" (similar to Lido) enables trading of yield-bearing tranche positions, “rebases” upon loan repayments
Launched in 2024, reached $60mm TVL
ObjectSDK (comparable to Morpho Blue for DePIN/RWAs) enables modular underwriting system for low latency appraisals & amortization schedules
Launched in 2024, enabled 20 new assets
Yield Splitting Without Spot LP → CALIBER
Yield Pass (similar to Pendle but for NFTs) strips & isolates yields but for productive illiquid assets, such as Node Licenses
Launched in 2024, currently $202mm TVL
USD.AI (like “GLP/HLP” - a single token for multiple collateral types) is a yield-bearing synthetic dollar backed by loans against DePIN/AI hardware (InfraFi)
Targeting 20-25% APR, but initially starting as a T-Bill yield-bearing product with plans to progressively diversify collateral base to InfraFi assets
Target: >20% penetration of all DePIN hardware, already $237m of borrower demand demonstrated
Queue Extractable Value (QEV) to Optimize Redemption Liquidity
QEV-Boost – a liquidity incentive system based on epoch timing (similar to Flashbots) that improves USD.AI liquidity allocation through market-driven queue ordering
Structured redemption queue based on payment schedules
Stakers can bid in QEV auctions for priority access to liquidity
Fair distribution through proportional queue advancement
Passive stakers earn rewards from smoothed yields and auction fees
Target: Enhance redemption efficiency to earn up to 3% of protocol yield via QEV prioritization
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