Stabledash Live · Jun 6 · 27 min

Bitcoin Credit Meets Stablecoins: Inside Saturn's Yield Stack

With Ellis Osborn

Key takeaways

Ellis Osborn says Saturn reached about 245 million in TVL in roughly six weeks since launch.
sUSDat carries about 90 to 95% exposure to STRC and offers 15%, against the 11 and a half percent STRC pays today, according to Osborn.
Osborn reads Strategy selling Bitcoin as a signal to credit agencies that it will defend the STRC peg, not as a bearish move.

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Summary

Osborn says Saturn takes Strategy's Bitcoin-backed credit and repackages it into yield products that investors anywhere can use.

Ellis Osborn, who says he has been a Bitcoin miner for about nine years, now co-runs Saturn, a 10-person team building onchain products on top of STRC. Osborn says the protocol has hit about 245 million in TVL in the roughly six weeks since launch.

Two tokens, one credit source

Saturn is built around two assets, Osborn says: USDat, an unstaked stablecoin backed by T-bills, and sUSDat, a staked version with about 90 to 95% of its exposure in STRC. He describes STRC as a credit instrument backed by Bitcoin, where Strategy borrows cash at 11 and a half percent to buy Bitcoin, at about 29% LTV right now.

Osborn says Saturn is offering 15% while STRC today offers 11 and a half percent. He traces those yields to how credit agencies view Bitcoin: "They literally called it negative capital," he says, calling the result a massive mispricing.

“We wanna be the bit wise of digital credit. We wanna structure products on top of this, and it will become an asset class of its own.”

Ellis Osborn

Access outside US brokerages

Because STRC is a US equity, Osborn notes, buying it requires a US brokerage account. Saturn does not sell to US persons or OFAC-sanctioned countries, but he says anyone else in the world can get economic exposure to STRC through it.

Tranching with Strata

Saturn is integrating with Strata on senior and junior tranches. Osborn says the junior tranche takes first loss on STRC NAV drawdowns, while the senior gets 65% of the fixed dividend and can earn 8% with near-zero volatility. He calls the senior tranche his personal pick and says it could suit earn products at a neobank or exchange.

Strategy's Bitcoin sales

On a day when Strategy sold some Bitcoin, Osborn said the senior tranche stayed protected because the junior took the drawdown. In his opinion the sale tells credit agencies that Strategy will sell Bitcoin to preserve the peg and improve the rating of STRC, using cash, equity issuance and Bitcoin sales to keep it at $100. He wants it to get a better rating and go into pension funds.

Ellis Osborn says Saturn wants to be "the Bitwise of digital credit". He expects that growth to come from apps building on the protocol without permission, such as Pendle, Morpho and Strata, and predicts that digital credit, now in its "first inning", will take a huge chunk of the fixed income industry.

Saturn, Strategy, Strata, and Bitwise come up most.

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