Strategy's new financial report shows huge losses, but STRC has become a new favorite in DeFi. How did the high interest rate of 11.5% get moved on the blockchain?

Author: Jae, PANews

On May 6, Strategy released its financial report for the first quarter of 2026.

The numbers aren't good: a net loss of $12.54 billion, primarily due to changes in the fair value of Bitcoin holdings. CEO Michael Saylor hinted in a conference call that they "may sell some Bitcoin to pay dividends."

Following the news, Strategy's stock price fell more than 4% in after-hours trading, and Bitcoin also briefly fell below $81,000.

However, while traditional markets are voting with their feet, Strategy's products are gaining popularity in another market. Its perpetual preferred stock, STRC, is becoming a "new darling" of the DeFi space.

Saturn, Apyx, and Pendle, three major DeFi protocols, have built a "BTC on-chain yield structure" around SRC, initiating a financial experiment to explore the ultimate capital efficiency of Bitcoin.

The allure of 11.5% high interest rates: STRC drives DeFi integration.

In July 2025, Strategy launched its perpetual preferred stock STRC on Nasdaq. With no maturity date and no need to repay the principal, it only requires monthly dividend payments and became Saylor's financing tool for buying cryptocurrencies.

When the market price of STRC falls below its face value of $100, the board will increase the dividend yield to attract buyers; conversely, it will decrease the dividend yield. As of May 2026, STRC's annualized dividend yield had risen to 11.5%, far exceeding the yield of approximately 3.7% on US Treasury bonds, making it a highly sought-after investment for many retail investors.

This mechanism created a funding flywheel for Strategy. The company would only raise funds by issuing new shares at par value when the STRC price was greater than or equal to $100, and the remaining funds, after deducting dividend reserves, would be used to purchase Bitcoin.

Saylor calls this model "smart leverage": for every $1 raised through STRC, Strategy issues $2 of MSTR common stock to maintain a leverage ratio of approximately 33%. This means that $1 of STRC will be converted into $3 of Bitcoin buy orders.

Today, STRC's issuance size has reached $8.5 billion, ranking it among the world's largest preferred stocks. Despite Strategy's net loss of $12.8 billion in Q1 due to Bitcoin impairment, STRC's Sharpe ratio is still as high as 2.53, and it maintains relatively ample liquidity.

STRC's performance has laid the groundwork for DeFi protocols to bring it on-chain.

Saturn is the first to enter the market, bringing SRC dividend yields onto the blockchain.

Saturn is the first protocol to take this approach. It secured $800,000 in seed funding from Yzi Labs and Sora Ventures to convert SRC dividends into on-chain stablecoin cash flow. Co-founder Kevin Li describes the protocol as "Tether for digital credit."

Saturn employs a dual-token model similar to Ethena, separating liquidity and yield:

USDat: The base stablecoin, 100% backed by tokenized U.S. Treasury bonds, serves as the protocol's liquidity layer and is primarily used for payments, settlements, and DeFi collateral.
sUSDat: A collateralized version of USDat. When a user deposits USDat into a collateral contract, Saturn switches the underlying reserve assets from Treasury bonds to STRC. The returns of sUSDat also come directly from the monthly dividends of STRC.

Currently, Saturn's total STRC holdings have increased to approximately $50 million. Since STRC payments are in cash, Saturn will use on-chain cash reinvestment or exchange rate adjustments to allow sUSDat to appreciate relative to USDat. As of May 7th, sUSDat's yield had reached 9.51%.

To attract early users, Saturn launched the "Gravity Points" program, offering up to 18 to 20 times the points reward for the USDC/USDat and USDC/sUSDat trading pairs on Curve, quickly establishing initial liquidity depth. Within just one month of its mainnet launch, Saturn's TVL surged from $40 million during the beta phase to $122 million, an increase of more than three times.

Apyx invests $130 million in STRC, focusing on yield enhancement.

If Saturn is building the base currency, then Apyx is enhancing credit yields. As the largest external holder of STRC on-chain, with a holding value of nearly $130 million, it uses "yield aggregation" to turn basic dividends into excess returns.

Apyx also adopts a model that separates non-yielding stablecoins from yield certificates:

apxUSD: A synthetic US dollar, created by over-collateralizing SATA preferred shares issued by STRC and Strive. apxUSD does not directly pay out yields; it is primarily used for liquidity in the lending market.
apyUSD: A yield certificate. Users can obtain apyUSD by depositing apyUSD. The latter increases in value by capturing all dividend flows of the underlying asset portfolio.

Unlike Saturn, Apyx's returns have a "leveraged effect." Not all apxUSD holders choose to stake; all dividends generated by STRC are distributed to a smaller number of apyUSD holders. As of May 7, apyUSD's 30-day average annualized yield was 11.1%, with an expected yield set at over 13%.

It's worth mentioning that Apyx's risk management mechanism also carries a touch of traditional finance.

Dynamic rebalancing: The asset basket will be automatically adjusted based on issuer concentration restrictions, liquidity needs, and over-collateralization requirements;
30-day redemption cooling-off period: apyUSD has a 30-day redemption cooling-off period to prevent liquidity run risks.

Principal and interest splitting; Pendle etches an interest rate curve onto STRC assets.

When Saturn and Apyx put SRC dividends on-chain, Pendle injected credit attributes into these assets by tokenizing yield.

Pendle splits its yield assets sUSDat/apyUSD into two separate tokens:

PT (Principal Token): Principal token, usually traded at a discount. When held until maturity, users can redeem it back to the underlying asset at a 1:1 ratio, locking in a fixed annualized yield and thus hedging against interest rate fluctuations of the asset.

For example, assuming a user buys PT-apyUSD with a term of 1 year and an implied yield of 18.42%, this means that for every 1 apyUSD spent to buy 1 PT-apyUSD, the user will receive 1.18 apyUSD upon redemption at maturity.

YT (Yield Token): Yield token. The price of YT is usually much lower than the price of the underlying asset, allowing users to indirectly gain leveraged exposure to STRC dividend increases with a small amount of capital.

For example, the price of 1 YT-sUSDat is 4% of the price of 1 sUSDat. This means that a user can buy 25 YT-sUSDat with 1 sUSDat. Therefore, even a small jump in the yield of sUSDat (STRC) will result in a 25-fold increase in the user's returns.

In addition, users can provide liquidity in Pendle's sUSDat and apyUSD pools to earn trading fees and Pendle token incentives.

The introduction of Pendle has given the Bitcoin lending market its first "implied yield" curve, marking Bitcoin's transition into a credit asset. Currently, the total value of assets issued by the Apyx and Saturn protocols on Pendle has reached $200 million and $55 million, respectively.

DeFi contributes to the resilience of STRC financing, but nested leverage creates the risk of cascading liquidations.

The integration of STRC into DeFi protocols is ostensibly another upgrade to DeFi gameplay, but in reality, it is also having a reverse impact on Strategy's fundraising capabilities and Bitcoin's asset attributes.

As major buyers of STRC, DeFi protocols will objectively enhance STRC's price resilience in the secondary market. As long as STRC remains above par value, Strategy can continue to issue new shares to buy more Bitcoin.

According to Strategy, over $270 million worth of STRC has been circulating in the DeFi market, accounting for approximately 3% of its total issuance. This model of on-chain liquidity supporting off-chain credit will become one of the classic cases in the RWA field.

Through SRC and its DeFi derivatives, Bitcoin has been given "interest-bearing" characteristics. For a long time, Bitcoin has been regarded as "digital gold," its primary value lying in its scarcity rather than its cash flow. Now, investors can earn over 10% annualized returns by holding stablecoins based on SRC dividend flows without selling their Bitcoin.

Despite the sophisticated on-chain reward structure of STRC, its multi-layered nesting also amplifies risks and vulnerabilities.

Some DeFi users are amplifying their returns through cyclical leverage: users deposit assets into Apyx to obtain apxUSD, then encapsulate them into Pendle to obtain PT, and finally collateralize the PT on Morpho to borrow USDC to buy more apxUSD. This cyclical operation with 5x leverage can increase the base return to 60% or even higher.

However, the assumptions supporting this chain are very fragile: STRC is subject to dividend deferral risk . Preferred stock dividends are not mandatory, and under pressure from market headwinds, the Strategy board may choose to suspend or defer dividend payments, which could cause the STRC price to deviate significantly from its face value. If apxUSD becomes undercollateralized, there is a possibility of triggering a chain reaction of on-chain liquidations.

From Nasdaq's STRC to the on-chain three-layer revenue structure, the crypto market is creating a new capital logic: Bitcoin as the underlying asset, Nasdaq responsible for price discovery, and DeFi responsible for the distribution and circulation of digital credit systems.

Saturn strengthens the monetary layer, Apyx enhances the yield layer, and Pendle deconstructs the interest rate layer. These three elements form the backbone of the digital credit system, and Bitcoin is completing its leap from currency to asset, and then to the foundation of credit.

However, high returns always come with high risks, and in the ever-present Bitcoin market, the cost of leverage often arrives unexpectedly.