Cap, a blockchain startup developing an interest-bearing stablecoin protocol, has closed an $8 million seed funding round led by traditional finance heavyweight Franklin Templeton. The round also drew support from institutional investors Susquehanna, Triton Capital, and crypto-native players including Nomura’s Laser Digital and market maker GSR.
The investment signals a continued convergence between legacy finance and the decentralized economy, especially as traditional firms look to stablecoins as a gateway into tokenized yield strategies.
This latest raise follows a $1.1 million community round conducted on the Echo crowdfunding platform, created by crypto influencer Jordan “Cobie” Fish. Angel investors include several high-profile figures within Ethereum’s Layer 2 ecosystem—often dubbed the “MegaETH Mafia”—such as Spencer Noon, Bryan Pellegrino (LayerZero), Jason Yanowitz (Blockworks), and backers from EtherFi, Steakhouse Financial, and Meteoria.
Cap is building its infrastructure atop EigenLayer, a shared security protocol that allows restaking of existing ETH across multiple platforms. Though the protocol will ultimately settle on Ethereum, Cap plans to concentrate its activity and user base on MegaETH, a new Layer 2 scaling solution positioned as an alternative to the dominant rollup-centric narrative in Ethereum’s scaling roadmap.
Cap’s Yield Engine Taps TradFi and DeFi Operators for Stablecoin Strategy
Cap’s upcoming stablecoin protocol aims to bridge the gap between decentralized finance and traditional financial markets by outsourcing yield generation to a diverse network of institutional and crypto-native players.
According to a blog post by the company, Cap’s model allows users to mint its dollar-pegged stablecoin, cUSD, by depositing USDC or USDT. Once minted, cUSD can be staked to earn yield or used across DeFi as a stable digital asset. Yield generation, however, is not handled by Cap directly. Instead, the protocol outsources that function to a competitive marketplace of “operators,” ranging from high-frequency trading firms and private equity funds to RWA (real-world asset) platforms and DeFi protocols.
These operators borrow the stablecoins and deploy them into their strategies, returning a market-driven interest rate to lenders. Restakers—those who delegate staked ETH to Cap’s system—enhance the network’s security and receive a share of premiums in return. Cap, in turn, charges a 10% protocol fee on user-generated yield while requiring operators to purchase “loan insurance” as a safeguard for lenders in case of default.
This setup gives institutions like Franklin Templeton a dual role: as capital providers, they can access stablecoin liquidity for strategic plays; as ecosystem participants, they help validate a model that merges decentralized infrastructure with familiar financial mechanics.
Cap’s hybrid model of decentralized finance and institutional-grade infrastructure positions it at the forefront of stablecoin innovation. By combining restaking security with outsourced yield generation from both TradFi and DeFi operators, the protocol aims to create a more flexible, competitive, and accessible system for earning yield on stable assets. With backing from major financial players and integration into next-gen Ethereum ecosystems like EigenLayer and MegaETH, Cap is emerging as a key player in the evolution of interest-bearing stablecoins.
Quick Facts
- Cap secured $11 million in seed funding, with Franklin Templeton leading the round.
- The startup aims to develop a stablecoin protocol that offers users passive income through collaborations with financial institutions.
- Other investors include Triton Capital, Flow Traders, GSR, and Nomura Group’s Laser Digital.
- The stablecoin engine is expected to launch later this year.
