# Table of Contents - [Cap Overview | cap](#cap-overview-cap) - [Solution: CAP | cap](#solution-cap-cap) - [Problem: Self-Consuming Yield | cap](#problem-self-consuming-yield-cap) - [Implicit & Explicit Safety | cap](#implicit-explicit-safety-cap) - [Sources of Yield | cap](#sources-of-yield-cap) - [Operator Yield | cap](#operator-yield-cap) - [Helpful links | cap](#helpful-links-cap) - [Alternative Stablecoins | cap](#alternative-stablecoins-cap) - [General Risk Disclosures | cap](#general-risk-disclosures-cap) - [Shared Security Model | cap](#shared-security-model-cap) - [FAQs | cap](#faqs-cap) - [CAP Stablecoins | cap](#cap-stablecoins-cap) --- # Cap Overview | cap [NextProblem: Self-Consuming Yield](/cap-overview/problem-self-consuming-yield) Last updated 2 months ago #### [](#heading-introducing-cap-labs-the-yield-renaissance) **The Yield Renaissance** It’s time to break the cycle that has plagued DeFi for years. Users have continually been confined to self-consuming economic designs that don’t scale, relying heavily on either cyclical user fees or new token emissions for yield. These markets are not scalable and push users to suboptimal solutions. Some of these solutions include low return TradFi products and high risk instruments like memecoins. These pose a grave risk to users, and ignore the true potential of crypto native yield. The reality is that there is still much more than can be done natively within the block space. DeFi can still offer unique value propositions to the masses that are not simple copies of fintech products or predatory price pumping schemes. #### [](#covered-agent-protocol) Covered Agent Protocol CAP offers a new option for users, which does not rely on endogenous models. It is opening the gate to a hidden side of yield that was previously only accessible to wealthy insiders and their institutions. These exogenous sources of yield, such as arbitrage, rank among the most profitable business models in crypto. However, due to their complexity, only a handful of actors have dominated the space. Through CAP, any user will be able to access this scalable, adaptive native yield. CAP offers users two credible commitments: perpetual competitive yield & risk coverage from yield generation activities. * **Perpetual competitive yield:** by leveraging an operator layer to fulfill yield generation, in lieu of a team or DAO, CAP can generate competitive yield at any scale and market condition * **Coverage from yield generation risk:** shared security marketplaces will underwrite the risk of agent activity, shielding stablecoin holders from the risk of these activities. If you have a question that is not covered in our documentation, please post your question as a topic on our . [community forum](https://capcommunity.discourse.group/c/questions/2) --- # Solution: CAP | cap [PreviousAlternative Stablecoins](/cap-overview/alternative-stablecoins) [NextSources of Yield](/cap-overview/sources-of-yield) Last updated 6 months ago CAP is a stablecoin engine to break users free from the cycle of endogenous models. It does this without having to resort to suboptimal TradFi solutions and predatory token pumping designs. CAP’s stablecoin engine will produce redeemable stablecoins of various denominations, such as USD, BTC, and ETH. Their goal will be to democratize access to what was previously only available to a few sophisticated and already-wealthy actors. This includes the full spectrum of yield, such as arbitrage, MEV, and RWAs. At no point are users directly exposed to custodians, centralized exchanges, bridges, or other infrastructure related to yield generation. CAP leverages a novel implementation of shared security networks to underwrite the risk of these operations. Malicious or otherwise unwanted activity by agents results in slashing, to the benefit of stablecoin holders. Below is a high level overview of how CAP works. 1. **Yield** CAP stablecoins are designed to deliver competitive yield in any market situation. Due to their competitive agent model, strategies constantly shift as markets evolve. Stablecoins holders only need to choose which denomination of stablecoin they want to hold, and yield is produced on the backend. 2. **Scalability** A competitive network of agents will execute yield based on independent strategies. These strategies will have to continually adapt to market conditions in order to beat the median benchmark yield rate established by agent performance. This will allow CAP to perpetually offer competitive yield at scale and regardless of market conditions. Given that the protocol does not rely on slow infrastructure like offchain legal agreements and internal human dependencies, CAP is prepared to scale with deposit growth. 3. **Stability** CAP stablecoins are redeemable for the collateral that backs them. Users will choose what denominations and collateral baskets they wish to be exposed to. This ensures predictable stablecoin prices and a variety of directional exposures. 4. **Censorship resistance** CAP is pioneering a new use case for shared security networks like EigenLayer. By leveraging the coverage model of security delegations, CAP will shield end users (stablecoin holders) from the risk of yield generation by agents. This novel arrangement will result in restakers and agents collaborating to vet the risks and rewards of all strategies fueling value creation at CAP. ![](https://cap-labs.gitbook.io/~gitbook/image?url=https%3A%2F%2F315632032-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252FkRZQBMptsoesj7n1mr8a%252Fuploads%252FN84gy59Dg8VY1QzqaKaN%252FGroup%252014.png%3Falt%3Dmedia%26token%3D66dc6010-1c0c-49a1-99c6-ca65a1b31347&width=768&dpr=4&quality=100&sign=4fb6ef80&sv=2) --- # Problem: Self-Consuming Yield | cap [PreviousCap Overview](/cap-overview) [NextAlternative Stablecoins](/cap-overview/alternative-stablecoins) Last updated 6 months ago The main issue with stablecoin deisigns today is that they use endegenous sources of value to fuel yield. This issue is so pervasive that Vitalik famously , relating many DeFi designs with an ouroboros. ### [](#the-ouroboros) The Ouroboros The Ouroboros is a snake that eats itself. Since it does not eat anything but itself, it cannot grow beyond its current size. This is the perfect analogy for most financial structures on blockchains today, as most applications rely on endogenous economic designs. #### [](#token-flywheels) Token flywheels Token incentive emissions from the top 5 DEXs are $462M per year ($0 at Uniswap, $35M at Curve,~$400M at Aerodrome, $24M at PancakeSwap, and $3.4M Raydium). A large portion of decentralized stablecoins currently rely on these emissions for their economic flywheels, specifically through some adaptation of the veToken model. These include CDPs, AMOs, and passive strategy-backed stablecoins. They cannot grow without these emissions. As a result, these stablecoins are limited to always be smaller than the top DEXs. This is an extreme limitation to place on decentralized stablecoins. #### [](#user-fee-models) User fee models Stablecoins that rely on user fees are more sustainable than token emission models, because cash flows are directly tied to value creation. This is in contrast to value speculation, which occurs in token incentive designs. However, the value created via user fee models is still endogenous: it comes entirely from usage of each platform. The issue with these endogenous user fee models is that they are capped by demand for individual stablecoins platforms. This is usually a function of leverage demand for volatile crypto-native tokens, which is both cyclical and insufficient for mass adoption. #### [](#exogenous-sources) Exogenous sources There are several exogenous yield sources that can be used to create scalable stablecoin designs. For example, market making and MEV produced over $2Bn and approximately $686M (Ethereum only) in the past year, respectively. However, no stablecoins have captured the full spectrum of these opportunities. This market is almost untouched by decentralized stablecoin creators. In addition to crypto-native yield, novel RWAs represent a significant and unexplored yield source for stablecoins that dwarf token incentive schemes. For example, investment grade corporate bonds, whose market stands at a collective $1.2Tn, currently distribute over $56bn per year in interest. ### [](#cefi-solutions-are-monolithic-and-manual) CeFi solutions are monolithic and manual Monolithic strategies like T-Bill stablecoins can quickly find themselves obsolete due to changing market conditions. Complete solutions need to have multiple concurrent strategies that morph with the evolution of markets. However, the switching cost for strategies on CeFi and CeDeFi projects is quite high, given the reliance on team members to find new strategies, build additional infrastructure, and manage custodians. This lag impedes strategies from adapting efficiently and hurts scalability. ### [](#users-are-always-last) Users are always last Users are always the most junior party in protocol hierarchies when there are exploits, bankruptcies, or other force majeure events. This is not only true with CeFi projects, but also with blockchains, bridges, and DeFi. Bridge exploits and dApp hacks have destroyed entire ecosystems, with end users having no recourse against protocols or blockchains that advertised their usage. Hackers are often not found, and decision makers responsible for bad risk management hide behind the common phrase “DYOR”. This precedent of user treatment and lack of protection is terrible for crypto power users that are constantly burned by bad experiences. It is also counterproductive for the industry, which is subsequently seen by regulators as a danger to the public. [issued this criticism of DeFi](https://x.com/VitalikButerin/status/1827642283560144916) --- # Implicit & Explicit Safety | cap ### [](#implicit-safety) Implicit Safety #### [](#operators) Operators Operators are tasked with earning yield for the stablecoin. They earn the difference between the benchmark yield and the yield that their strategies realize. As a result, operators will have a tendancy to maximize yield as much as possible. **Restakers** Restakers serve as a balancing force to operators. Restakers want to earn yield in exchange for their delegations. This will attract restakers to delegate to CAP operators , as CAP will be a sustainable source of real yield. One of the objectives of restakers is to not get slashed. This influences them to only delegate to operators/agents that are reputable and that present sound strategies. As a result, restakers will ensure that underlying strategies are not too risky. ### [](#explicit-safety) Explicit Safety CAP is the first stablecoin protocol where yield generation risk is fully covered. Leveraging the risk management skills and delegation value of restakers, CAP ensures that all operators participating in yield generation are covered. #### [](#economic-security) Economic security The dynamics of CAP's economic security are much clearer than what is seen at validation networks. It is always evident how much capital is at risk and how much stake delegation is needed to cover associated risks. By having a clear economic security need, CAP can ensure that operators won't act maliciously and prevent slashing events with proper parameters. #### [](#objective-faults) Objective faults These faults are the conditions that deter unwanted operator activity. They are fully onchain and instantly verifiable, providing restakers and operators with predictable outcomes. Objective faults under CAP are (1) not returning tokens by requirement timestamp, (2) returning less tokens than are expected, (3) delegation values covering operator activity falling below minimum thresholds. #### [](#network-security-co-mingling) Network security co-mingling CAP will not share stake delegations with other networks/AVSs. Only the delegated stake that is exclusive to CAP operators will be accounted for when engaging with operators. This will protect CAP from the compounding risks of multiple networks having the power to slash the same value. [PreviousOperator Yield](/cap-overview/product-overview/operator-yield) [NextShared Security Model](/cap-overview/product-overview/shared-security-model) Last updated 2 months ago --- # Sources of Yield | cap #### [](#exogenous-yield) Exogenous Yield Exogenous yield refers to returns generated from sources external to the protocol itself, meaning they don’t rely on actions like borrowing, trading, or other usage of the protoco. Instead, exogenous yield taps into opportunities from outside economic activities, markets, or systems, capturing value that exists independently. In crypto, there is a wide spectrum of exogenous yield, coming from a variety of sources. Some stablecoin protocols have tapped into a portion of exogenous yield, such as T-Bills and funding rate arbitrage. However, no stablecoin protocol has tapped into the full spectrum of this source of value. #### [](#full-spectrum-exogenous-yield) Full-Spectrum Exogenous Yield CAP taps into the full-spectrum of yield that can be generated natively in crypto, without the need of custodians or offchain legal agreements. CAP relies on a large set of agents to execute various strategies, which change as markets evolve. A large part of initial agents are expected to be market makers, MEV actors and RWA protocols, as these parties have already reached out to and invested in CAP. However, the agent set is meant to be large and diversified. This will result in the best outcome for CAP's yield. Existing DeFi protocols, such as yield-bearing stablecoins with specific strategies, can join CAP as agents, benefiting their individual business models. [PreviousSolution: CAP](/cap-overview/solution-cap) [NextCAP Stablecoins](/cap-overview/product-overview/cap-stablecoins) Last updated 6 months ago --- # Operator Yield | cap #### [](#operator-generated-yield) Operator-generated yield Operators of various skillsets will interact with CAP to generate yield for stablecoin holders. These agents will include market makers, MEV actors, DeFi protocols, RWA companies, and other entities capable of producing yield with reasonable risk profiles. By onboarding a diverse agent group, CAP will be able to produce yield in various market conditions and at large scales. #### [](#why-use-operators) Why use Operators? * **Scalability:** A network of operators can operate across a wide range of markets and chains simultaneously, whereas a single team is limited by its resources and capacity. This setup can enhance yield by tapping into opportunities that might otherwise be too small or niche for a centralized team to handle. * **Competition:** Operators who compete or have incentives tied to performance can drive higher yields. * **Diverse strategies:** A diverse group of operators can implement varied strategies, which will allow CAP to perform well in any market condition. #### [](#benefits-of-being-an-operator) Benefits of being an operator Operators earn the difference between the yield generated by their strategies, minus the cost incurred from provisioning tokens from CAP (restaking fees, CAP fees, and yield for stablecoin holders). This incentive comes with no capital requirements for agents, significantly impacting their return profiles. Additional benefits for operators depends on their context. DeFi protocols and RWA companies, for example, run business models that benefit from additional capital. This incentivizes them to interact with CAP to improve their token flows, to the extent that they can compete with other agents. Market makers, MEV actors, and individuals can provisioning additional liquidity for their strategies without capital commitments. Unlike other solutions, such as flashloans, CAP loans can last several days. This broadens the types of strategies that these operators can execute. Ultimately, there is no shortage of actors in the space that can generate yield at various scales. CAP will look to onboard a diverse set of operators to ensure scalability. [PreviousCAP Stablecoins](/cap-overview/product-overview/cap-stablecoins) [NextImplicit & Explicit Safety](/cap-overview/product-overview/implicit-and-explicit-safety) Last updated 2 months ago --- # Helpful links | cap [PreviousShared Security Model](/cap-overview/product-overview/shared-security-model) [NextFAQs](/cap-overview/resources/faqs) Last updated 2 months ago If you have a question that is not covered in our documentation, please post it as a topic on our . ### [](#helpful-links) Helpful links Community forum: Twitter: Website: [community forum](https://capcommunity.discourse.group/c/questions/2) [https://capcommunity.discourse.group/c/questions/2](https://capcommunity.discourse.group/c/questions/2) [https://x.com/CapLabs\_](https://x.com/CapLabs_) [https://caplabs.io/](https://caplabs.io/) --- # Alternative Stablecoins | cap [PreviousProblem: Self-Consuming Yield](/cap-overview/problem-self-consuming-yield) [NextSolution: CAP](/cap-overview/solution-cap) Last updated 6 months ago ### [](#tradfi-and-cedefi-products) TradFi and CeDeFi Products New stablecoins designs have attempted to connect users to exogenous yield. These usually leverage low-return TradFi products like T-Bill wrappers. There are several of these stablecoins that have come to production after the long run of high interest rates in the US. Other designs leverage a similar model to . These Celsius models, dubbed CeFi or CeDeFi, take user tokens in the form of loans. They then execute a few simple yield strategies to earn yield for stablecoin holders. Much like Celsius, these models expose users to uncovered/unhedged risks: custodian risk, centralized decision making by teams, and asystematic risks of protocols they integrate. ### [](#dex-emission-optimizers) DEX Emission Optimizers Many decentralized stablecoins scaled by extracting value from token emissions, particularly DEX emissions. Most of these models leveraged a minting system that maintained protocol control of liquidity on DEXs, allowing teams to capture at least 50% of the emissions received by their token pools. Now that emissions are at an all-time low, these stablecoins have stopped growing or collapsed. ### [](#collateralized-debt-poisition-cdp) Collateralized Debt Poisition (CDP) CDP stableocins connect users willing to leverage crypto assets, with users seeking USD yield. These models are the perfect example of endogenous designs. Growth of these models is directly tied to leverage demand via these platforms. As markets cycles evolve, CDP usage drastically shifts. This causes significant fluctuations in market caps and results in periodic deviations from peg. Another barrier to growth for CDPs is competition. Alternative leverage products like perpetual DEXs and centralized exchanges have historically taken much of the industry's leverage demand. [Celsius](https://www.cnbc.com/2022/07/13/embattled-crypto-lender-celsius-informs-state-regulators-that-its-filing-for-bankruptcy-imminently-source-says-.html) ![](https://cap-labs.gitbook.io/~gitbook/image?url=https%3A%2F%2F315632032-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252FkRZQBMptsoesj7n1mr8a%252Fuploads%252F7Aa5X8AST2iv6D8GjOXX%252FGroup%252013.png%3Falt%3Dmedia%26token%3Ddf9883ca-1695-4b8c-b9f6-f7770da49dae&width=768&dpr=4&quality=100&sign=396832d8&sv=2) --- # General Risk Disclosures | cap #### [](#slashing-execution-risk) Slashing execution risk Slashing functions regulate activity within CAP. They safeguard the protocol and users from malicious agents as well as force majeure events related to yield generation. The ability of these functions to regulate activity rely on the efficient execution of slashing, when needed. There are several potential roadblocks in these operations, such as token risk of delegated tokens, particularly when engaging with liquid restaking token projects. Exposure to codebases at EigenLayer and other shared security markets also pose potential risks to slashing execution. #### [](#pre-existing-exposure-risk) Pre-existing exposure risk Users have one decision to make, and that is what tokens they wish to be exposed to. These tokens may fluctuate in price, especially in the case of gas tokens like BTC and ETH. [PreviousFAQs](/cap-overview/resources/faqs) Last updated 6 months ago --- # Shared Security Model | cap [PreviousImplicit & Explicit Safety](/cap-overview/product-overview/implicit-and-explicit-safety) [NextHelpful links](/cap-overview/resources/helpful-links) Last updated 2 months ago CAP will function based on a system of rewards and penalties, allowing for provisioning and offboarding of contributors as incentives change. There’s no reliance on a founding team or individual dev. Crucially, there is no unilateral control over the system or funds. Every aspect of these protocols will function on a decentralized marketplace of predefined incentives. #### [](#shared-security) Shared security A shared security network / AVS will regulate a permissionless collective of operators with specialized skills in value capture. They will have separate and conditional access to deposits from users, such as ETH, ETH derivatives, various forms of BTC, and dollar stablecoins. Their role will be to execute yield-generating activity, which may include MEV, arbitrage trades, and regular DeFi farming. The proceeds will then be shared among system participants. Malicious activity, CEX defaults, exploits, and other force majeure events will be covered by slashing parameters. #### [](#operators-as-agents) Operators as agents Operators are incentivized to generate a minimum amount of yield using cost-free capital from collateral baskets. Excess yield generated is kept by operators as a reward for participating in the system. Each operator acts independently and is responsible for sourcing restaker buy-in via strategy creation and due diligence. Given the highly profitable structure for operators, talent can be sourced to extract yield from hard-to-reach venues like MEV, arbitrage, and complex farming. **Covered** agents All operators in the system need to possess enough security delegations to cover losses of any kind: malicious activity, loss from strategy implementation, force majeure events like CEX failures, and other unforeseen events. Through this delegation process, LRT protocols, risk managers, and the operators themselves will need to carefully examine strategies and assess risks. Such a process will completely outdo any current safety procedures in DeFi and create a significantly safer method to generate yield. Below is a high level graphic of CAP. Agents and restakers below are listed as examples. ![](https://cap-labs.gitbook.io/~gitbook/image?url=https%3A%2F%2F315632032-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252FkRZQBMptsoesj7n1mr8a%252Fuploads%252F9nZtY5CUiBN967TDKDpj%252FScreen%2520Shot%25202024-10-28%2520at%25205.31.29%2520PM.png%3Falt%3Dmedia%26token%3Dd32febcc-efa2-4ec5-a549-1dafe0fcc595&width=768&dpr=4&quality=100&sign=4eed3858&sv=2) --- # FAQs | cap #### [](#operator-control-and-restrictions) Operator Control and Restrictions **Q: Do operators have full control over collateral once disbursed? Are there restrictions on how funds can be used?** A: Operators have specific tasks they are entrusted to do by restakers, similar to validators in EigenDA or zk co-processors in LaGrange. The agreement between restakers and operators details specific strategies. CAP is working with a financial institution to whitelist operator addresses, collaborating with major market makers, HFT firms, and several large private equity/credit funds. Both operators and restakers operate on EigenLayer. CAP's role is to verify that rules are being followed and monitor whether operators make or lose tokens. #### [](#loan-security-and-risk-mitigation) Loan Security and Risk Mitigation **Q: Are loans to operators unsecured in the traditional sense? What risk mitigants exist for restakers beyond reputational considerations?** A: From a stablecoin holder's perspective, all loans are collateralized. This system is similar to Aave, unlike hedge fund stablecoins or T-Bill wrappers where users have unsecured deposits. #### [](#collateral-asset-lending-caps) Collateral Asset Lending Caps **Q: Are there caps on what percentage of collateral assets can be lent to operators?** A: Caps are determined by two factors: 1. Nominal limits set in partnership with the financial institution 2. Restakers' willingness to back each operator Long-term operator centralization is unlikely since no single operator or strategy can consistently meet the hurdle rate in all market conditions. CAP's primary concern is ensuring all strategies are covered to maintain safety. #### [](#overcollateralization-requirements) Overcollateralization Requirements **Q: Does the protocol impose minimum overcollateralization requirements on restakers?** A: Yes, the protocol implements requirements similar to those used by Aave, Compound, and Morpho. #### [](#slashing-mechanics) Slashing Mechanics **Q: Do slashed funds cover stablecoin insolvency?** A: Slashed funds cover operator activities, like any other AVS. The operators are large HFTs or private credit funds whose performance capability can be reliably modeled. USDC and USDT are used to collateralize cUSD 1:1. #### [](#value-drop-scenarios) Value Drop Scenarios **Q: What happens when restaked value drops below cUSD collateral value? Is there an incentive for operators to not repay the USDC?** A: The system uses mechanics similar to Aave, Morpho, and Compound. Delegations must always remain above USDC used. With a nearly 2:1 ratio, historical price movements would not put these positions underwater. The incentive to repay are similar to that of major institutions like Ceffu returning custodied funds or GSR returning market-making tokens. #### [](#restake-withdrawal-process) Restake Withdrawal Process **Q: What happens if restakers withdraw their restake? How does CAP handle operators invested in illiquid assets?** A: There is a partnership between delegators and operators that includes prior notification of delegation removal to allow for position unwinding. While contracts enforce rules where removal of delegation can trigger a slashing event if funds aren't returned, there is a built-in delay before delegation can be removed. This approach is similar to other AVS systems. #### [](#premium-structure) Premium Structure **Q: How do premiums work in relation to EigenLayer's security model?** A: Restakers charge a fixed rate on borrows for the operators they delegate to. #### [](#what-is-mega-mafia-and-how-is-cap-involved) What is Mega Mafia & how is CAP involved? The mafia is a select group of projects building completely new applications in collaboration with MegaETH. The application process is very stringent, with few teams being accepted. Once in the mafia, teams work together to maximize synergies between project designs. For CAP, that entails building around other DeFi protocols, and integrating CAP stablecoins with all native applications on MegaETH. From Berlin to Chiang Mai, Mega Mafia teams have worked in person to foster a tightknit community. Mentors and advisors have continually participated in the ideation and building process. These include EigenLayer team members, Vitalik Buterin, and others. #### [](#what-is-megaeth) What is MegaETH? #### [](#where-is-cap-deployed) Where is CAP deployed? CAP will be deployed on Ethereum L1, where EigenLayer is deployed. This removes the need to interact with shared security marketplaces across blockchains. Automations will allow users to mint and redeem CAP stablecoins from MegaETH. [PreviousHelpful links](/cap-overview/resources/helpful-links) [NextGeneral Risk Disclosures](/cap-overview/resources/general-risk-disclosures) Last updated 2 months ago MegaETH is a real-time blockchain built on top of Ethereum as an L2. It is Ethereum's answer to Solana performance. The team is made up of the academics from MIT & Stanford, as well as crypto OGs from Consensys. For more information, check out . [MegaETH's website](https://megaeth.systems/) --- # CAP Stablecoins | cap [PreviousSources of Yield](/cap-overview/sources-of-yield) [NextOperator Yield](/cap-overview/product-overview/operator-yield) Last updated 6 months ago #### [](#differentiating-stablecoin-types) Differentiating stablecoin types There are many types of stablecoins, and they all package different value propositions. What CAP offers is the yield of multiple concurrent strategies, which are protected by economic security. The main risk is the ability of the system to slash malicious actors when needed. Below are examples of other types of stablecoins, and their risks. #### [](#cap-stablecoins) CAP stablecoins Each denomination of stablecoin at CAP will have two forms: interest-bearing, and non interest-bearing. The former will earn yield from agent strategies & grow with that value, while the later will be pegged to its denomination. Users will be able to easily convert between these two forms. Having both versions of each stablecoin will maximize integration capabilities with other projects. #### [](#denominations) Denominations Stablecoins are any tokens that follow the price of other assets. They can be pegged to fiat currencies, arbitrary RWA assets, and even other cryptocurrencies. CAP stablecoins will come in various denominations, such as USD, BTC, and ETH. That is to say, CAP stablecoins will follow the price of those assets. This will allow users the freedom of directional exposure, depending on their preferences. ![](https://cap-labs.gitbook.io/~gitbook/image?url=https%3A%2F%2F315632032-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252FkRZQBMptsoesj7n1mr8a%252Fuploads%252F7VUKiIRd3ZG09byDthOx%252Fimage.png%3Falt%3Dmedia%26token%3D4b5e8989-7efc-42ff-8ee2-be411869be5a&width=768&dpr=4&quality=100&sign=24726394&sv=2) ---