Kevin Li · November 2025
In our previous article, we outlined the vision for Bitcoin Credit and the growing convergence of traditional finance (TradFi) and crypto. In this piece, we take a deeper look at where USDat’s yield comes from, and why it’s designed to be scalable and durable across market cycles.
Bitcoin Credit is not a new concept. For years, users have been able to borrow against their Bitcoin and pay interest over time through DeFi protocols. However, that landscape of Bitcoin-based credit in DeFi faces three major limitations:
The emergence of Bitcoin Treasury companies (BTC DATs) marks a turning point in Bitcoin credit as crypto and TradFi converge.
At its core, USDat generates yield by lending capital to MicroStrategy, and over time, to other Digital Asset Treasuries (DATs), at a floating annual interest rate of 10.25%. MicroStrategy uses this borrowed capital to iteratively purchase Bitcoin.
When Bitcoin appreciates, MicroStrategy repays its loans using capital gains from its holdings. This structure creates a natural spread between Bitcoin’s long-term compound annual growth rate and its cost of capital (the interest paid to USDat), forming what we call the Bitcoin Carry Trade.
To put the credit opportunity from this Bitcoin carry trade in perspective, the total market centered around Strategy is exploded from approximately $700M in 2020 to $14.9 billion in 2025, growing at a compound annual growth rate of 85% since 2020.
Source: Strategy’s 2020-2025 Quarterly Reports
Looking ahead, the BTC credit market is projected to reach $394 billion by 2035, growing at an estimated 40% compound annual rate, assuming Bitcoin maintains a 30% CAGR and MicroStrategy continues to peg roughly 25% of Bitcoin credit issuance to NAV.
Source: USDat Projection, Model Linked
As the Bitcoin credit market balloons, USDat stands at the epicenter of a new financial frontier, transforming Bitcoin’s dormant collateral into a global engine for stable yield. By holding sUSDat, users exchange some of Bitcoin’s upside for consistent, yield bearing returns supported by institutional grade credit, effectively insulating themselves from the volatility of market cycles.
In other words, USDat yield is scalable because it stems from Bitcoin’s structural alpha: the integration of a hard digital asset into mainstream financial infrastructure. The result is a real, enduring yield born from the alignment of two financial systems.