Cap Money has deposited over $300 million of its cUSD reserves into the Aave protocol over the past four months, according to a recent announcement from Aave.

Cap Money, a Type 3 stablecoin protocol built on Ethereum's MegaETH layer, operates through immutable smart contracts to deliver guaranteed yields on its cUSD token with minimal risk. Users can deposit USDC or USDT to mint cUSD at a 1:1 ratio, which remains fully redeemable at any time. The protocol outsources yield generation to institutional operators, such as banks and financial firms, who borrow from a pooled fund and must achieve a predefined hurdle rate set by smart contracts. Any excess returns are distributed to cUSD holders after covering benchmarks and restaker premiums.

The deposits into Aave serve as a critical safety net, leveraging the platform's base yield rate for stablecoins to ensure capital preservation and downside protection. This integration allows Cap Money to offer reliable returns, with staked cUSD reportedly yielding around 10% APY derived from positions in protocols like Aave and Fluid (excluding additional rewards). Operators deploy borrowed funds in various strategies, enabling the protocol to adapt quickly without the delays of traditional governance.

This partnership comes amid broader trends in stablecoins, where protocols like Cap Money are differentiating through credible financial guarantees and restaking mechanisms via EigenLayer. As DeFi continues to evolve, such integrations could pave the way for more scalable, low-risk yield opportunities, potentially drawing in trillions from traditional finance.