InfiniFi - iUSD Staking
InfiniFi is a DeFi protocol that replicates fractional reserve banking on-chain. Users deposit USDC to mint iUSD (pegged 1:1 to USD), then stake it into siUSD for liquid yield or lock it into liUSD for higher returns. The protocol deploys a fraction of reserves into DeFi yield strategies while maintaining liquidity buffers for redemptions.
How InfiniFi and iUSD staking work:
- Deposit USDC to mint iUSD at a 1:1 ratio
- Stake iUSD into siUSD (liquid tranche) for ~8% APY with instant redemption
- Or lock iUSD into liUSD (locked tranche) for ~11-13% APY with ~6-week lock-up
- Reserves are deployed into Aave, Pendle, Fluid, and Ethena to generate yield
- A loss waterfall protects conservative depositors: liUSD absorbs losses first, then siUSD, then base iUSD
- Reserve composition is fully transparent on-chain — verifiable in real-time
InfiniFi was funded in a pre-seed round led by Electric Capital, New Form Capital, Kraynos Capital, and BaboonVC, with individual investors including Frax founder Sam Kazemian and DeFi Dad. The protocol has reached ~$190M+ in iUSD market cap.
Basic Information
Fundamentals
TVL
APR
Statistics
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| Period End (inclusive) | N/A | N/A | N/A | N/A |
| APR | N/A | N/A | N/A | N/A |
| CAGR (APY) | N/A | N/A | N/A | N/A |
| TVL High | N/A | N/A | N/A | N/A |
| TVL Low | N/A | N/A | N/A | N/A |
Liquidity
Not calculated yet
Liquidity analysis will be available soon
Strategy
- Deposit USDC to mint iUSD
- Connect your wallet and deposit USDC on Ethereum
- Receive iUSD at a 1:1 ratio — a receipt token representing your deposit
- Base iUSD does not generate yield on its own
- Stake iUSD into siUSD (liquid tranche)
- siUSD is the liquid, yield-bearing version of iUSD
- Earns approximately 8% APY with instant redemption
- Lower risk — protected by liUSD in the loss waterfall
- Earn yield from DeFi strategies
- Protocol deploys reserves into Aave (liquid), Pendle and Ethena (illiquid/maturity), and Fluid
- Capital allocation heavily favors liUSD, with siUSD receiving a smaller share
- Blending liquid and locked capital into duration assets increases capital efficiency
- Redeem anytime
- Unstake siUSD back to iUSD at any time (liquid tranche has no lock-up)
- Redeem iUSD for USDC — subject to reserve liquidity
- Alternatively, lock siUSD for 1-13 weeks for boosted yields up to ~15% APY
Yield Source
InfiniFi generates yield by deploying a fraction of deposited USDC into established DeFi protocols. The fractional reserve model allows the protocol to allocate capital more efficiently than fully-reserved alternatives, driving higher system-wide returns.
Primary yield sources:
- Aave (liquid farm): Lending USDC on Aave generates variable lending interest — this allocation remains liquid for redemptions
- Ethena (illiquid farm): Deploying into Ethena's sUSDe for delta-neutral yield from perpetual futures funding rates — the primary source of above-market returns
- Pendle (maturity farm): Fixed-term yield from Pendle's yield tokenization — illiquid until maturity but provides predictable returns
- Fluid: Additional lending/liquidity provision yield from Fluid protocol
Yield distribution by tranche:
- siUSD (~8% APY): Liquid tranche — receives a smaller share of strategy returns; prioritizes accessibility and lower risk
- liUSD (~11-13% APY): Locked tranche — receives the majority of strategy capital allocation; higher yield compensates for lock-up commitment
- Locked siUSD (up to ~15% APY): Lock siUSD for 1-13 weeks for additional yield boost via multipliers
The fractional reserve model means not all deposits are deployed — a portion remains in reserve to support redemptions and maintain liquidity buffers, which are fully transparent on-chain.
Strategy Limits
Deterministic Constraints
- siUSD yield (~8% APY) is lower than liUSD (~11-13%) due to liquid tranche receiving less capital allocation
- Redemption depends on reserve liquidity — if reserves are heavily deployed, redemption may be delayed
- Only USDC is accepted as deposit collateral
- Only available on Ethereum mainnet
Probabilistic Constraints
- Fractional reserve model means not all deposits are backed 1:1 at all times — a bank-run scenario could exhaust reserves
- Yield depends on underlying DeFi protocol performance (Aave, Ethena, Pendle, Fluid)
- Loss waterfall protects siUSD but does not eliminate risk — extreme losses could cascade through all tranches
- Protocol is pre-TGE with governance still evolving — points program suggests future token launch
Underlying Assets/Allocations
Risk Analysis
Potential Risks
Based on the Nansen research report and protocol documentation, the following risks are associated with iUSD staking:
- Fractional Reserve / Bank Run Risk - Not all deposits are backed 1:1; simultaneous mass redemptions could exhaust reserves before all depositors can withdraw
- Underlying Strategy Risk - Yield depends on Aave, Ethena, Pendle, and Fluid; failures in any of these protocols could impair reserves
- Ethena Concentration Risk - Ethena is the primary yield source at scale; negative funding rates or Ethena-specific issues directly impact InfiniFi
- Smart Contract Risk - Despite Spearbit and Cantina audits, the Cantina competition received 592 findings on 2,417 lines of code, indicating a high density of potential issues
- Loss Cascade Risk - While the waterfall protects siUSD, extreme losses could cascade through liUSD → siUSD → base iUSD, affecting all depositors
- Liquidity Risk - Illiquid farm allocations (Pendle maturity, Ethena) cannot be instantly unwound; redemption delays are possible during stress
- Governance Risk - Protocol is pre-TGE with no formal decentralized governance yet; centralized decision-making on farm allocation and reserve ratios
- Regulatory Risk - Fractional reserve stablecoin models may attract regulatory scrutiny as they blur lines between banking and DeFi
Risk Analysis (3rd Parties)
Summary
InfiniFi's iUSD staking (siUSD) offers a liquid yield-bearing stablecoin position earning ~8% APY through an on-chain fractional reserve banking model. The protocol deploys reserves across Aave, Ethena, Pendle, and Fluid, with a loss waterfall protecting siUSD holders (liUSD absorbs losses first). Reserve composition is fully transparent on-chain. The protocol has undergone Spearbit and Cantina audits and is monitored on CertiK Skynet. However, the fractional reserve model inherently means not all deposits are backed 1:1, creating bank-run risk. Heavy dependence on Ethena as the primary yield source adds concentration risk. The protocol is pre-TGE with evolving governance. Users should carefully consider the trade-off between higher yields and fractional reserve exposure when sizing positions.
Multiple Audits: InfiniFi has undergone a $35k Cantina audit competition (592 findings submitted, April 2025) plus a prior Spearbit audit. The protocol is also listed on CertiK Skynet for ongoing monitoring.
Loss Waterfall Protection: The protocol encodes a hierarchical loss absorption structure: liUSD (locked) absorbs losses first, then siUSD (staked), then base iUSD. This mirrors senior-junior tranche splits in traditional finance, protecting conservative depositors.
On-Chain Transparency: Reserve composition is fully verifiable on-chain — USDC deposits, iUSD minted, strategy allocations, and liquidity buffer levels can all be independently audited in real-time without relying on off-chain reports.
Fractional Reserve Risk: Unlike fully-collateralized stablecoins, InfiniFi intentionally operates a fractional reserve — not all deposits are backed 1:1 at all times. In a bank-run scenario where many users redeem simultaneously, reserves could be exhausted before all depositors are made whole.
Ethena Dependency: Ethena is described as the primary venue where InfiniFi parks liquidity at scale. This creates concentration risk — if Ethena's delta-neutral strategy fails or sUSDe experiences issues, it could directly impact InfiniFi yields and reserve health.
Pre-TGE Protocol: InfiniFi has not yet launched its governance token (TGE expected early 2026). The current points program and governance structure are still evolving. Early-stage protocols carry higher uncertainty about long-term design decisions.