# Why we need csUSDL?

### TL;DR

While most stablecoins just sit idle or rely solely on T-bill yields, csUSDL goes further combining real-world T-bill income and onchain lending yields for stronger, more resilient returns.

No KYB. No KYC. No lockups. Just swap into csUSDL and start earning. Your balance grows daily—no staking or complex setup required.

USDL, the underlying asset, is fully regulated under the FSRA in Abu Dhabi, with compliance baked directly into its smart contracts. So you get permissionless access and regulatory oversight.

In short, csUSDL bridges the best of TradFi infrastructure with DeFi-native access, yield, and composability.

### Stablecoin Market Overview

Stablecoins have established themselves as the most widely adopted product onchain, with projections indicating market growth to $10 trillion by 2030, up from $230 billion today. Tether (USDT) and Circle (USDC) lead the market with a combined 90% share, generating over $10 billion in revenue in 2023. Their success is due to deep liquidity, first-mover advantage, and regulatory compliance. However, this dominance comes at a significant cost:

* **No Yield:** Users earn no returns on their holdings, although issuers benefit from the assets under management.
* **Centralization:** Yield and risk management decisions remain centralized.
* **Complex Strategies:** Users must engage with multiple DeFi platforms to generate yield.

<figure><img src="https://823232485-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F2zoNNeuTiTLUlQohidES%2Fuploads%2F5AWVMf0WHjCyaCMVJ0wG%2FStablecoin%20Adoption%20Graphic.png?alt=media&#x26;token=11bb8348-c3b8-47b0-b124-5eca24f36088" alt=""><figcaption></figcaption></figure>

### **The Rise of New Decentralized Stablecoins**

The market is evolving, demanding higher yields, greater governance control, transparency in yield and risk management, and seamless DeFi integration. Among the many stablecoins currently available, decentralized options are growing fastest. These stablecoins aim to maintain a 1:1 peg to the U.S. dollar and typically offer:

* **Base Tokens and Liquid Staking Tokens (LSTs):** Non-yield-bearing base tokens (e.g., DAI, USDe, USD0, USDz) paired with yield-generating LSTs (e.g., sDAI, sUSDe, USD0++, sUSDz).
* **Governance and Incentives:** Tokens like ENA, MKR/SKY, and Usual to engage users.
* **DeFi Integration:** Strong connections with platforms like Morpho, Pendle, and Balancer to enhance yield opportunities.

### **Emerging Stablecoins and LSTs** &#x20;

1. **MakerDAO / Sky**

* **DAI / USDs** is a decentralized, collateral-backed stablecoin pegged to the U.S. dollar, created by locking over-collateralized crypto assets in smart contracts. If collateral values drop significantly, MakerDAO can mint additional MKR tokens to maintain the peg.&#x20;
* **sDAI / sUSDs** are yield-bearing derivatives of DAI or USDs, formed when users lock their DAI in the DAI Savings Rate (DSR) module. This module distributes protocol revenue to sDAI or sUSDs holders, allowing them to accrue interest over time. The yield allocation is managed by MakerDAO, which adjusts rates based on market dynamics and redistributes revenue from real-world assets (RWAs) and lending activities.&#x20;

2. **Ethena:**&#x20;

* **USDe:** A synthetic dollar-pegged stablecoin built on the Ethereum blockchain, maintaining its 1:1 peg to the U.S. dollar through a sophisticated delta-neutral hedging strategy. This involves holding staked Ethereum (stETH) as collateral and simultaneously opening short positions on Ethereum futures to counteract price volatility and ensure stability.&#x20;
* **sUSDe:** users can stake USDe to mint sUSDe, which accumulates yield from Ethereum staking rewards and funding rates from derivative positions.

### Limitations of emerging Stablecoins and LSTs&#x20;

* **Lack of Transparency and User Control**: Base tokens like DAI, USDe, USD0, and USDz do not provide direct yield to users.&#x20;
* **Opaque Yield Processes**: Yield generation often requires complex steps or lock-ups. Users must engage with liquid staking tokens (LSTs) to earn yield, which rely on intricate and non-transparent asset management strategies.
* **User Control Constraints**: Users only have one choice: to be exposed to the asset selection chosen by the provider. Users cant influence asset utilisation decisions.&#x20;

### **Challenges Integrating Real-World Assets (RWAs) in DeFi**

Although onchain US Treasury Bills and other RWA-backed assets are gaining traction, their adoption remains limited due to minimal usability within DeFi. Most RWA assets are not accessible in lending and borrowing markets, nor are they available in fixed-rate markets like Pendle or restaking platforms, restricting their strategic potential for DeFi users.

### **csUSDL by Coinshift**&#x20;

csUSDL addresses these gaps with a unique approach that balances yield generation,  stability, user control, and regulatory compliance, all within an intuitive, user-friendly interface.



