The Physical World, The Financial World, The DeFi World

The Physical World, The Financial World, The DeFi World

Look around you: so many things we rely on are the result of powerful combinations. Where would we be if oxygen and hydrogen weren’t combined to make water? Who wants to return to a world where heavy luggage had no wheels?

In finance, combining different structures can provide investors with uniquely appealing solutions. This often involves blending asset classes for specific risk/return profiles. In DeFi, it's about building a superior structure for accessing yield itself.

Seeking Certainty in an Uncertain Market

Many investors, regardless of the asset class, crave predictability. This desire is a core reason why people buy stablecoins in DeFi—they offer a stable anchor in a volatile market. The expectation is simple: your principal remains constant, and if put to work, it should generate predictable income.

However, the reality of achieving consistent, safe yield in DeFi is far from simple:

• Direct Protocol Deposit: Putting all your stablecoins into a single DeFi lending protocol offers a specific income, but comes with high concentration risk – what if that single protocol is exploited or its yield drops? Managing this means constant manual monitoring.

• Traditional DeFi Aggregators: Diversifying across a fund managed by professionals reduces single-protocol risk. But many open-ended aggregators offer yields that can vary wildly, and the exact value when you want to withdraw is less certain, especially with fragmented and sometimes opaque underlying strategies.

This is where Interstable's AI-Native Stablecoin Yield comes in. We combine the core features investors crave – predictable yield (as much as possible in dynamic DeFi) and the transparent return of capital – with the unparalleled benefits of AI-driven diversification, security selection, and active management.

Figure X: Comparison of Stablecoin Yield Strategies

Predictability & Purpose-Built Yield

Interstable's approach, is designed to bring a new level of predictability to DeFi yield. While DeFi yields are dynamic, our methodology aims to "lock in" optimal strategies relative to current market conditions, providing visibility around potential returns.

aiUSD is designed to be a holding vehicle for wealth creation. Our AI engine, AIxFI, ensures investments are continuously monitored, optimizing yields while diligently managing risk.

Key Considerations for Smart Stablecoin Yield

Ultimately, the most critical elements for assessing any stablecoin yield solution are the level of income generation and the sustainability of that yield, alongside robust capital preservation.

In DeFi, specific threats to income and principal include:

• Smart Contract Exploits: Loss of funds due to vulnerabilities in protocol code.

• De-peg Risk: The underlying stablecoin losing its peg.

• Yield Sustainability: APYs inflated by unsustainable token emissions.

• Reinvestment Risk: The challenge of finding comparable yields when existing positions mature or yields drop.

This is where a management system with deep expertise in constructing and managing this type of portfolio is key. AIxFI's global research footprint (across protocols and chains) helps source the best opportunities, carefully blending high-quality, liquid positions with select, higher-yield term-locked strategies to exploit market inefficiencies and enhance net returns.

A Dynamic AI-Driven Approach

Within Interstable, we advocate an active investment process that goes beyond simple "buy and hold" or static aggregation. This can be thought of as combining two elements:

• The AI Selection Component: This refers to AIxFI continuously establishing and re-evaluating the portfolio, setting the base for a strategy and target yield. This is where AIxFI's access to suitable investments, its fundamental risk analysis, and its predictive modeling (Market Cycle & Seasonality) come into play. It selects the optimal blend of assets, protocols, and chains.

• The Active Management Component: This refers to AIxFI's ongoing surveillance and risk monitoring, ensuring the portfolio remains robust and continues to deliver to expectations. AIxFI constantly tracks key metrics (APYs, YPO, liquidity, risk scores), identifies rebalancing opportunities, and accounts for transaction costs. This dynamic approach is a crucial differentiator, actively avoiding problem credits, defending income, and adapting to ever-changing market conditions.

We believe this AI-driven "select and actively manage" approach, powered by AIxFI, offers investors an appealing combination of intelligent yield optimization, robust diversification, and transparent management in the complex DeFi landscape. It’s the smart way to earn.