I recently noticed a quite interesting phenomenon. Strategy's first-quarter financial report showed a loss of 12.5 billion USD, and its stock price dropped accordingly, but its perpetual preferred stock STRC instead became popular in DeFi. What exactly is happening behind this?

STRC is essentially a financing tool designed by Saylor to buy Bitcoin. It was listed on NASDAQ last July, with no maturity date and no need to repay principal, as long as it pays dividends monthly. When the stock price falls below its $100 face value, the board increases the dividend yield to attract buyers. As of May, the annualized dividend yield has risen to 11.5%, far above U.S. Treasury bonds at 3.7%, which is why retail investors are flocking in. Even more interesting is that Strategy relies on the STRC financing flywheel: every dollar of financing can issue two dollars of common stock, ultimately converting into three dollars of Bitcoin buying power. Now, the issuance scale of STRC has reached $8.5 billion, making it the largest preferred stock in the world.

But the real story unfolds on the blockchain. Saturn took the lead by converting STRC’s cash dividends into a yield stream of on-chain stablecoins. It designed a dual-token model: USDat is 100% collateralized by U.S. Treasuries, serving as the liquidity layer; sUSDat is a staked version, with the underlying reserve switching from Treasuries to STRC, directly earning monthly dividends. In just one month, Saturn’s TVL skyrocketed from $40 million to $122 million, and the annual yield of sUSDat reached 9.51%.

Next is Apyx, which holds $130 million worth of STRC, focusing on enhancing yields. apxUSD is a synthetic dollar, and apyUSD is a yield certificate. The key difference is that Apyx introduces leverage— not all apxUSD holders stake their tokens; all dividends from STRC are concentrated and distributed to fewer apyUSD holders, causing the annualized yield of apyUSD to jump to 11.1%, with expectations even exceeding 13%. Apyx also incorporates traditional financial risk controls, such as a 30-day redemption cooldown period to prevent liquidity runs.

Finally, Pendle splits yield assets into principal tokens (PT) and yield tokens (YT). PTs are traded at a discount and can be redeemed 1:1 for the underlying asset at maturity, locking in a fixed yield; YT prices are extremely low, allowing users to leverage small capital to boost dividend increases. For example, 1 YT-sUSDat costs only 4% of 1 sUSDat, so with 1 sUSDat, a user can buy 25 YT, amplifying small fluctuations in dividend yield by 25 times. This marks the first implicit yield curve in the Bitcoin lending market.

Currently, the TVL of Apyx and Saturn assets on Pendle has reached $200 million and $55 million, respectively. The entire ecosystem has taken shape: Saturn solidifies the monetary layer, Apyx enhances the yield layer, and Pendle dissects the interest rate layer. This design transforms Bitcoin from a pure store of value into an interest-earning credit asset.

But the risks involved are not negligible. Over $270 million worth of STRC is circulating in DeFi, accounting for 3% of the total issuance. Some players are amplifying yields through cycle leverage: users deposit assets into Apyx to get apxUSD, package it into Pendle to get PT, then collateralize PT in lending protocols to borrow USDC, buy more apxUSD— such 5x leverage operations can push baseline yields to 60% or higher. It sounds enticing, but the assumptions supporting all this are very fragile.

STRC faces dividend deferral risk. Preferred stock dividends are not mandatory; if market headwinds arise, the Strategy board might suspend dividend payments, causing STRC’s price to deviate significantly from its face value. If apxUSD becomes under-collateralized, it could trigger a cascade of liquidations. Moreover, Bitcoin’s price fluctuates around $81.7k, and any sharp decline could activate liquidation mechanisms.

Therefore, the essence of this story is: NASDAQ’s STRC, the three-layer yield structure in DeFi, combined with Bitcoin as the underlying asset, is creating a new capital logic. Bitcoin has evolved from a currency to an asset, and now to a credit-backed underlying. Investors can earn over 10% annualized yield without selling Bitcoin. But high returns always come with high risks— once cracks appear in this intricate structure, the cost of leverage can come crashing down in an instant.