Many users praised Saturn srUSDat for absorbing STRC volatility exactly as designed and keeping senior tranches protected during the stress test, while one noted that the mechanism explanation brought no comfort.
1/ srUSDat is the senior tranche on sUSDat.
It holds a prioritized claim on the STRC distribution, set at 65% of the STRC dividend rate, and it sits above a junior tranche that serves as first-loss capital.
When the underlying NAV moves, the junior tranche absorbs that move before it reaches senior.
6/ For holders who prefer a fixed-rate expression, PT-srUSDat trades on Pendle with a +/- 10% IY Depth.
A full four-million clip will need to be fired before it breaks the orderbook.
Solid product and liquidity on @pendle_fi.
2/ This is why the recent period looked entirely different depending on where in the stack you were positioned.
The junior tranche absorbed the NAV volatility from STRC trading below par.
The senior exchange rate to USDat is designed to increase as yield accrues, independent of the underlying price swings, for as long as the junior buffer holds.
Senior is designed to be insulated from that volatility by structure, not by timing.
3/ The protection is structural but not unlimited.
Junior absorbs losses first, and only in the extreme case where junior is fully depleted would senior begin to track the underlying directly.
A coverage ratio governs that buffer and is visible on Strata in real time. srUSDat is the lower-risk position in the stack, not a risk-free one.
So far even through the current volatility that STRC has experienced, srUSDat remains unaffected.
4/ Last week Strategy announced STRC dividends are moving from a monthly to a semi-monthly cadence, with the first payment scheduled for July 15.
This matters mechanically. Each distribution is now roughly half the size, so each ex-dividend NAV move that the junior buffer absorbs is smaller as well.
Smaller and more frequent moves should keep that buffer healthier through each cycle, which makes the protection sitting beneath senior more durable over time.
5/ With coverage of ~140%, srUSDat remains untouched by the recent $STRC volatility. Further proving that the senior tranche is performing as designed.
As always, this is not financial advice.
Please do not interact with any other tweet that follows this. Available to eligible participants outside the United States and EEA.
Yield is variable and not guaranteed.
Not an offer or solicitation where prohibited and not offered from the EU. Paid contributor to @saturn_credit. Cash compensation.
Terms and disclosures: https://saturn.credit/legal/terms-conditions
@Saturn_Intern @saylor @saturn_credit My strategy plan !! 🎌🍄 ⬇️
@Saturn_Intern @saylor @saturn_credit Detailed strategy🌟🌻 🔻
@Saturn_Intern @saylor @saturn_credit Junior tranche absorbing the volatility exactly as designed. Senior stays rock solid at +0.23%. Clean risk layering.
@Saturn_Intern @saylor @saturn_credit mechanism explained.
comfort did not follow.
@Saturn_Intern @saylor @saturn_credit yields entirely stable under pressure is exactly how structured finance is supposed to work. do you think most web3 users actually understand the risk difference before aping into these tranches? 📊🤔
@Saturn_Intern @saylor @saturn_credit This is exactly how good DeFi design is supposed to work. Stress test happens, senior holders stay protected. $STRC doing what it was built to do.
@Saturn_Intern @saturn_credit Below par moves in $STRC looked messy at first 👀
But that volatility through Saturn Credit staked-USDat wasn’t a bug — it was the design stress test.
srUSDat is literally built for this exact scenario. 🧵
@Saturn_Intern @saylor @saturn_credit I gotta check the market cap chart data.
@Saturn_Intern @saturn_credit LoL 😹🤣😹😹😹
@Saturn_Intern @saturn_credit Surviving stress tests is the ultimate flex for protocols.
@Saturn_Intern @saturn_credit LoL 😆
@Saturn_Intern @saylor @saturn_credit
@Saturn_Intern @saylor @saturn_credit Hmmm