A Guide to Earning with The First Liquid Lending Token (LLT): csUSDL

Coinshift, a leader in Web3 treasury management or what I might refer to as “the ADP for onchain businesses,” just launched the first Liquid Lending Token (LLT) backed by a real world asset (RWA) called csUSDL. This DeFi product was developed in partnership with Paxos, Steakhouse Financial, and Morpho Labs, to offer secure, yield-generating opportunities for both individuals and institutions.

Here’s what you need to know to get started with this killer stablecoin yield product and how you can benefit from the Coinshift ecosystem!

What is USDL?

USDL, or Lift Dollar, is a yield-bearing stablecoin issued by Paxos International. It is regulated by the Financial Services Regulatory Authority (FSRA) in the Abu Dhabi Global Market (ADGM), ensuring high standards of customer protection and compliance.

Key Features of USDL

• 1:1 Redemption: USDL is fully backed by reserves held 100% in cash and cash equivalents, ensuring that customer funds are always available for redemption.

• Regulatory Oversight: Paxos operates under strict compliance, providing transparency and security for USDL holders.

• Daily Yield Accrual: As a yield-bearing stablecoin, USDL generates returns from U.S. Treasury Bills and cash reserves without requiring staking or complex strategies. For anyone holding 100 USDL, at 5% APY, they would find their wallet holding 105 USDL in one year.

USDL serves as the foundation for this new csUSDL product, bringing stability, transparency, and regulatory assurances to the Coinshift ecosystem.

How Does csUSDL Generate Yield?

csUSDL offers a dual-yield strategy, combining stability with additional earning potential:

1. Stable Base Yield (up to ~5%):

   • Sourced from Paxos’ USDL reserves backed by U.S. Treasury Bills and cash equivalents.

   • Yields are distributed automatically without requiring staking.

2. Lending Yield (coming soon):

   • USDL is lent against blue-chip assets such as wstETH and WBTC using Morpho infrastructure.

   • Strategies are curated by Steakhouse, leveraging expertise from managing MakerDAO’s $2B+ RWA program.

   • Below is a diagram showing how USDL is lent to borrowers against ETH and wBTC collateral so csUSDL holders can earn the underlying 5% USDL APY + up to 5% borrow APY + SHIFT rewards (TGE in 130 days) + Morpho Rewards.

The SHIFT Token: Driving Growth in the csUSDL Ecosystem

At the heart of csUSDL’s ecosystem is the SHIFT token, designed to drive liquidity growth, adoption, and value creation. SHIFT aligns its value with Coinshift’s success, incentivizing participation from individuals and institutions.

SHIFT’s Role in Liquidity and Adoption

• DeFi Integration: SHIFT rewards csUSDL holders through token emissions, creating a flywheel for liquidity growth.

• Institutional Engagement: Treasuries adopting csUSDL unlock enhanced APYs, turning passive portfolios into yield-generating instruments.

SHIFT’s Revenue Model

SHIFT token holders share in the ecosystem’s success through two key revenue streams:

1. USDL Minting Fees: Up to 25 basis points on USDL minted through csUSDL.

2. Vault Performance Fees: Revenue from csUSDL’s yield strategies (currently set at 0% to encourage adoption).

This model ensures Coinshift users and SHIFT holders are deeply aligned with the platform’s growth and vision.

Why Choose csUSDL?

Projected to grow from $180B to $16T by 2030, the stablecoin market must evolve to meet user demands such as:

• Higher yields with sustainable strategies.

• Greater transparency and user control.

• Seamless integration into DeFi ecosystems.

csUSDL meets these demands by combining security, accessibility, and yield into a single token. It simplifies DeFi for individuals while providing institutions with scalable treasury solutions.

Key Benefits

• Self-Custody: Maintain full control of your assets within Coinshift’s secure vaults.

• Transparency: Enjoy fully audited reserves and real-time insights.

• Diversification: Resilient yield strategies leveraging blue-chip collateral.

• Composability: As an ERC-4626 token, csUSDL integrates seamlessly into DeFi, unlocking additional opportunities.

• Enhanced Rewards: Earn additional returns in SHIFT and MORPHO tokens.

Empowering Onchain Finance for All

Coinshift is redefining how users move, hold, and invest value onchain, with self-custody at its core. With csUSDL, Coinshift is democratizing institutional-grade yields and strategies, ensuring everyone has the tools to thrive in a decentralized financial future. This LLT is just the beginning, with further opportunities like LP rewards, fixed-yield products, and advanced DeFi strategies poised to unlock even greater potential.

Let’s dive into how to get started earning with csUSDL…

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How To Earn Up to 15% APY with csUSDL

Here’s a few risks to consider:

• Smart contract risk in Coinshift, Curve, Paxos, Morpho, or CoWSwap

• Front-end spoof attack on an app frontend

• An economic design exploit

• Limited liquidity to trade out of USDL—there’s currently enough liquidity to trade ~$4M USDL to USDC for 0.5% slippage in case whales read this

• Colluding signers on any multisig

• Systemic risk across DeFi, including a USDL depeg despite the 1:1 redemption for USDL backed by reserves 100% in cash or cash equivalents

1. First, I go to the Coinshift app login with my Ethereum wallet here and sign a gasless transaction to get started.

2. Next, I need to buy USDL so once I skip through the 5-step tutorial I end up on the screen below and follow the prompts to + BUY USDL with USDC.

3. Then, we need to wrap USDL to wUSDL and deposit into csUSDL. We can specify the amount of USDL here in the Coinshift app and WRAP & DEPOSIT. This will require 4 transactions (Approval + Wrapping, followed by Approval + Deposit into csUSDL).

As of this post, the estimated 33.37% APY for csUSDL is based off these underlying yields + rewards but keep in mind the SHIFT token is not live yet, and the SHIFT APY is based on an FDV of $500M given their last equity valuation.

In the future, I can return to the Coinshift app here under Withdraw to exit csUSDL back to USDL and sell USDL back into USDC/USDT or other tokens.

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