The yield source
Where Spield's yield comes from — your USDC is supplied to Blend, Stellar's lending market, and the backing grows on-chain as real interest accrues.
Spield doesn't manufacture yield. It sources real yield and restructures it. Understanding the source is the key to understanding why Spield is safe.
Your USDC earns real interest
When you deposit, your USDC is supplied to Blend — Stellar's primary lending market. There, borrowers pay interest to use that liquidity, and suppliers (that's your position) earn it. This is ordinary, transparent lending-market yield.
Spield only ever supplies USDC to the lending market — it never borrows. That keeps the protocol's exposure simple and one-directional.
Why the backing genuinely grows
This is the most important point in all of Spield.
In the lending market, your supplied USDC is represented by a balance whose exchange rate rises over time as interest accrues. Think of it like a savings-account share price that only ticks upward: the same number of "shares" is worth more USDC each day.
That means the asset backing your tokens actually grows on-chain, on its own. Spield reads this real, live rate directly from the lending market — it isn't a number anyone sets by hand, and no privileged party can inflate it.
This is the difference that matters
Because the backing is a real position whose value rises automatically, Spield can always pay every PT holder their principal and every YT holder their yield. The protocol is solvent by construction — there's no scenario where the value owed exceeds the value held. See Solvency.
"The rate" is the yield
The lending market's rising exchange rate is the yield in Spield:
- PT holders get their principal back because the position always holds at least enough to cover it.
- YT holders get the growth — the difference between what the position is worth now and what it was worth when their position started.
When a YT holder claims yield, Spield withdraws exactly the grown amount from the lending position and pays it out — leaving the principal backing untouched.
What Spield inherits from the yield source
Sourcing yield from an external market means Spield depends on that market's health. We state this plainly rather than hide it:
- If the lending market keeps functioning normally, Spield works exactly as designed.
- If the lending market were to pause withdrawals, payouts would wait on it — but Spield's accounting stays correct and its solvency remains verifiable throughout.
The protocol is built to be conservative here: it uses a deep, blue-chip lending pool, only supplies (never borrows), and continuously checks that its real position covers everything it owes.
Designed to extend
Spield's yield source is connected through a thin adapter, so the protocol can support additional, high-quality yield sources over time (for example tokenized real-world-asset yield) without changing how PT and YT work for users.
PT and YT explained
A deep but plain explanation of Principal Tokens and Yield Tokens — what they represent, how they're priced, and why their value always sums to the original position.
Solvency
Why Spield can always pay everyone it owes — the solvency invariant, how it's enforced on every operation, and how you can verify it live on-chain.