The Invisible Cost of Holding USX

The biggest Solana-native dollar asset can't sit idle while borrowers want it.

Holding USX earns 0% APY. Supplying USX to Kamino earns ~10% APY.

Nearly 10% on a dollar asset. Plus your 5x Flares on top. The difference between holding and supplying goes beyond your APY though.

It's about Solana matching what Ethereum built over years.

Solana DeFi Depends on You

Ethereum built deep lending markets through Compound and Aave over years. Solana's compressing that timeline. USX on Kamino sits in the middle of that compression.

Borrowers on Kamino are competing for USX. Over 11M borrowed against 12M supplied. That's over 90% utilization. Borrowing tripled in early November and hasn't slowed.

These are heavy hitters and advanced DeFi users. They need to deploy with size. When big capital wants to move $500k or $2m into strategies, available USX becomes the constraint. Your supply unlocks all of this.

They need it for liquidity on Orca and Raydium. Looping strategies on Kamino. YT-USX and PT-USX positions on Exponent.

That demand keeps growing. PT-USX is now live as Kamino collateral with 80% LTV, letting users loop their fixed yield up to 5x. Every new strategy increases demand for borrowed USX.

How It Works

You deposit USX into Kamino's lending pool. Borrowers take loans from that pool and pay interest. That interest becomes your supply APY.

Current rate: ~10% supply APY. This fluctuates with utilization. When demand spikes, rates can push higher. When it cools, they settle. Your 5x Flares continue regardless. Now you're stacking Kamino's rate on top.

The other option is holding USX in your wallet. That yields nothing. Only 5x Flares.

Withdrawals work on available liquidity. At over 90% utilization, less than 10% of the pool can exit immediately. Rest waits for borrowers to repay. If you'll need that USX soon, better to just hold it.

The Cycle

More supply drops borrow costs. Lower costs attract borrowers. More borrowers push utilization up. Higher utilization raises your supply rate. Supply creates its own borrow demand.

But there's a ceiling. When utilization hits 100%, borrowing stops. They switch to USDC. Your APY spikes short-term but the ecosystem loses composability.

When you use USDC, interest revenue leaves Solana. Goes to Circle. Funds Base's growth against Solana. When you supply USX, that value stays here. Flares distributions, protocol integrations, liquidity programs. Solana money funding Solana growth.

Your supply becomes Kamino's liquidity pool. Borrowers build on that pool. Strategies stack above it. That's the infrastructure layer.

You sit at the base of that stack.

Supply USX athttps://app.solstice.finance/deep-defi through Kamino's lending market.

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