Using CredX
Lending USDG
You are not buying a yield product. You are lending dollars to identifiable borrowers against collateral you can inspect.
Every cent of yield is interest paid by a borrower. There is no emission, no subsidy, and no trading strategy behind it.
What you deposit#
USDG is a dollar stablecoin issued by Paxos, pegged 1:1 and backed by reserves. CredX neither issues it nor holds reserves for it — the peg is entirely Paxos’ responsibility, and your exposure to it is the same as holding USDG in your own wallet.
You supply USDG to a shared pool. In return you receive sUSDG, a receipt token whose value grows as interest accrues. You are not locked in: sUSDG redeems for USDG plus interest whenever pool liquidity allows.
Where the yield comes from#
Borrowers pay a rate set by pool utilisation. That interest is split between lenders and the protocol reserve. Nothing else contributes.
supply APY = borrow APR × utilisation × (1 − reserve factor)
At a 4.17% borrow rate, 68% utilisation and a 15% reserve factor: 4.17% × 0.68 × 0.85 = 2.41% APR, which compounds hourly to 2.45% APY.
Why supply APY is lower than borrow APR
Two reasons, both structural. First, only the borrowed portion of the pool earns anything — idle dollars earn nothing, so your yield is diluted by utilisation. Second, 15% of interest is retained as a reserve factor that absorbs bad debt before lenders do.
| Utilisation | Borrow APR | Supply APY | Instantly withdrawable |
|---|---|---|---|
| 30% | 1.83% | 0.47% | 70% of the pool |
| 68% | 4.17% | 2.45% | 32% of the pool |
| 90% | 5.50% | 4.21% | 10% of the pool |
| 95% | 35.50% | 28.66% | 5% of the pool |
Withdrawals#
You can withdraw any amount up to the pool’s available liquidity, which is total supplied minus total borrowed. There is no lockup and no queue.
Liquidity is not guaranteed on demand
If utilisation is at 95%, only 5% of the pool is sitting idle. A large withdrawal may have to wait for borrowers to repay or other lenders to deposit. The interest rate model makes both of those attractive very quickly — at 95% utilisation borrowers are paying 35.5% — but “quickly” is not “instantly”.
What a lender is actually exposed to#
This is the section to read twice. Supplying to CredX is not a savings account, and the yield exists because these risks are real.
- Bad debt. If collateral gaps below the debt it secures faster than liquidators can act, the pool absorbs the shortfall. The reserve factor is the first line of defence; lenders are the second. The most likely trigger is an overnight or weekend gap in the underlying equity, which is exactly what Market-Hours Risk Mode exists to reduce.
- Smart contract failure. A bug in the vault, the rate model or the liquidation path could lose funds. Audits and caps reduce this; nothing eliminates it.
- Oracle failure. A wrong price could allow over-borrowing or trigger wrongful liquidations. Freshness gates and deviation circuit breakers are described in Security & guardrails.
- USDG itself. If the Paxos peg breaks, your position is denominated in a broken dollar. This risk sits entirely outside CredX.
What protects you#
| Protection | How it helps |
|---|---|
| Over-collateralisation | Every loan is backed by 1.5–2.5× its value in equity |
| Reserve factor (15%) | Accumulates a buffer that absorbs shortfalls before lenders do |
| Liquidation engine | Closes unhealthy positions with a bonus that makes it worth doing |
| Smart Deleveraging | Reduces risk before liquidation is needed at all |
| Supply & borrow caps | Bound exposure to any single ticker |
| Market-hours haircuts | Tighter LTV precisely when gap risk is highest |
A realistic return#
$50,000 supplied for 12 months at current parameters
Supply APY
Interest earned
Season 1 points
1× per dollar per day, before tier multiplier
Lockup
Management fee
Assumes utilisation stays where it is. It will not — the rate floats, and the figure above is an illustration, not a projection.
Yield should be boring
A 2.45% dollar yield backed by 1.5–2.5× over-collateralised equity is not exciting, and it should not be. If a lending protocol is paying you double digits on a stablecoin, the interesting question is always which risk is producing it.
Open the supply screen
Live rate, the utilisation curve with today's position on it, and a projected balance over 1, 3, 6 and 12 months.