RockawayX is excited to invest in the $8M seed round of Cap — the team behind the Covered Agent Protocol (CAP), a stablecoin engine that aims to deliver exogenous, scalable yield with built-in risk protections. DeFi users increasingly seek on-chain products with diversified risk-return profiles; Cap plans to address that demand by generating yield from varied sources. Alongside the capital investment, RockawayX is exploring becoming an initial liquidity provider through its Credit Fund.
Rethinking Yield-Bearing Stablecoins
Cap is setting a new standard in stablecoin design with cUSD, a yield-bearing stablecoin backed by a decentralized network of agents and restakers.
The first and obvious approach to yield-bearing stablecoins was depositing capital into treasury bonds and passing returns to owners. The downside is that return compresses in a low interest rate environment. Next, came solutions like Ethena, which can more aptly be described as structured products. Unlike asset-backed stablecoins, Ethena’s USDe token is minted by depositing other stablecoins and major digital currencies (i.e. BTC) on the protocol; USDe’s yield comes from Ethena using a common trading move — a cash-and-carry trade, that captures the price difference between going long in spot markets and short in futures markets–and running it at scale, with returns delivered to USDe holders. Its performance is also environment-affected, dipping when funding rates decline. Both models carry some risk around exchange infrastructure dependency and custodian failures.
Cap introduces a novel covered agent model, purpose-built to unlock exogenous yield from both crypto-native and traditional sources. Rather than relying solely on token emissions or funding rate arbitrage, CAP taps into a broad spectrum of opportunities — including MEV, cross-market arbitrage, and even yield strategies run by institutional players like high-frequency trading firms and private credit funds.
Each agent is backed by restakers who underwrite the capital they deploy. This shared security structure — enabled by the rise of restaking markets — ensures that operator risk is actively managed and compensated. Restakers receive a premium for providing this coverage, aligning incentives across the network.
The user experience remains seamless:
- Users mint cUSD by depositing stablecoins such as USDT & USDC
- Agents borrow from the collateral pool to generate yield
- Restakers back agents and share in the yield they generate
The result is a system where users earn yield passively, agents operate dynamically, and restakers are incentivized to perform diligent underwriting. By layering yield generation with decentralized insurance, Cap combines yield generation with risk processes, seeking to redefine what’s possible in stablecoin design.
Importantly, the founding team has solid DeFi expertise and a track record of rapidly scaling protocols. CEO, @Benjamin918_ (CEO) scaled QiDAO from 0 to $400M in TVL, and CTO, @the_weso (CTO) was a founding member of Beefy, which peaked at over $1B in TVL.
“For decentralized finance to reach the next wave of adoption, protecting users must be core to the infrastructure. Cap’s yield primitive, powered by EigenLayer’s shared security, brings a new standard of safety to onchain finance.” — Benjamin.lens, Cap Founder.
Early market traction has been strong, with interest from leading restaking operators like SIG, Gauntlet, and Chorus One. Cap is also positioning cUSD to serve as the flagship stablecoin within the MegaETH ecosystem — and a foundation for institutional DeFi applications.
We believe the broader market is trending decisively in this direction. Yield-bearing stablecoins currently represent 8.5% of the total stablecoin supply, with a combined market cap of around $19 billion. By 2028, we expect that figure to grow to $60 billion, driven by demand for native yield, transparent risk, and composability. This would represent 20% of an overall stablecoin market projected to surpass $300 billion — marking a 45% CAGR for yield-bearing assets in the base case.
In that future, protocols like Cap — designed from the ground up for scalability and risk segmentation — are well positioned to lead.
“Cap is bringing a novel approach to stablecoin yield — one that doesn’t just chase returns, but structurally manages risk through a decentralized underwriting layer. The team’s experience, the breadth of their yield sources, and the elegance of the covered agent model make this one of the most thoughtfully designed stablecoin systems we’ve seen. It’s also the first implementation of an Actively Validated Service (AVS) we’ve become really excited about, as it unlocks a path to undercollateralized lending in a secure, decentralized way. We’re excited to support Cap’s mission to make high-quality yield more accessible, scalable, and safe for users across DeFi.” — Hassan Bassiri, Partner at RockawayX
About the Round
Cap raised $8M in this round, co-led by Franklin Templeton and Kraken Ventures, with participation from SCB Limited, Robot Ventures, Anagram, ABCDE, and RockawayX.
Alongside our capital investment, RockawayX is exploring becoming an initial liquidity provider through our Credit Fund.
If you’re ready to explore the future of stablecoin yield, the Cap website and X account to explore more
About RockawayX
RockawayX is a $2B AUM digital asset investment firm. In addition to venture investing, RockawayX focuses on long-term value creation by providing liquidity and engineering resources to accelerate go-to-market and achieve exponential growth faster. To date, RockawayX has invested in 74 projects across Solana, Ethereum and other ecosystems. For more information about RockawayX, please visit rockawayx.com
About Cap
Cap is a stablecoin engine for covered yield. It leverages a collective of operators with specialized skills in yield generation to democratize yield previously untapped by the masses. This yield does not solely rely on crypto-native sources like funding rate arbitrage and token farming, but also on the expertise of traditional institutions like HFT firms, private credit funds, and other companies able to capture large-scale yield. Thanks to shared security markets, Cap is able to cover the risk of operator activity via cryptocurrency restaking. Restakers receive a premium for this coverage.
