Buck targets 10% APY onchain with Bitcoin-collateralized preferred stock

0:00I'm Ashin Edison from the Crypto Coin Show, and today on Blockchain Interviews with Dan Heldary, head of treasury at Buck, here to discuss Bitcoin native yield and on-chain fixed income, how treasury strategies and distributions actually work in DeFi, and how we can take traditional yield mechanisms that we see in TradFi and move them into the crypto markets and much more. Dan,

0:24welcome to the show and thanks for taking the time. Yeah, thanks for having me on. I'm super excited to be a part of this show and, you know, to talk more about what I believe to be a kind of the biggest opportunity in all of Bitcoin-backed securities and Bitcoin financialization, especially on-chain. Definitely. It's super exciting, especially with the

0:42billions or trillions of like value in traditional markets that are used to getting yield, and we want to be able to capitalize that on that and make the yield even better and more efficient in crypto. And I know Buck is playing a role in that, so excited to dive into that. Maybe we can start out with sort of a high level on TradFi

1:04yield and how it's finding its way on-chain, and what do you think changes or improves in moving it on-chain and into DeFi? Absolutely, I can give a high-level overview of kind of interest rates as they've existed, especially in the traditional financial markets, how Bitcoin's redefining that risk-free rate, and then specifically how Buck's bringing that on-chain. I mean, so to

1:25start off, obviously, when you're looking for yield or returns in the financial markets, there's different ways to explore that. One, you could invest in money market funds or short-term treasuries, which is the risk-free rate without taking on interest rate-related price fluctuations. So, that's, you know, shorter duration risk. You can go out along the

1:45the risk-for-yield curve and to, you know, 5-year notes, 2-year notes, 5-year notes, 10-year treasury notes, on and on, right? And so, these are different ways to manage yield over long periods of time, depending on your expectations of inflation, growth, etc. in financial markets and public markets. Then you can, you know, you can add yield in the form of, you

2:07know, credit spreads above those risk-free rates via, you know, corporate bonds or different sorts of mortgage-backed securities, and there's a lot of different yielding products in the market, and you take on risk by going outside diverting away from traditional finance or from diverting away from, you know, US Treasury-backed instruments.

2:29And

[clears throat]

then you have common equities, right? Like I would argue that the cost of capital across all of capital markets is the S&P, and the S&P has returned about 10% dividends reinvested for the past 30 years. So, that's another kind of yield you can look at when trying to you know, outpace inflation. Then we have Bitcoin, and Bitcoin's historically been

2:50returning 30% over the past kind of 5 years, and a lot of people expect that to continue as it's a safe haven and monetary debasement asset and is being adopted by traditional financial grounds. Then the introduction of STR C, the perpetual preferred variable rate dividend stock that strategy launched in July 2025 is kind of the money market de facto

3:16solution for a Bitcoin-backed yield. And so, that's a complicated way of saying because Bitcoin's such a pristine collateral asset, we now have a short-term rate on top of Bitcoin issued by strategy, and that's what Buck is bringing on-chain. We're bringing STR C on-chain, and we're creating a yield over-collateralized and backed by the world's most scarce hard asset, that

3:39being Bitcoin. That's very exciting, and yeah, that makes total sense, you know, from from the younger investors that, you know, maybe they don't really look at treasury notes cuz it sounds boring, and we and when you're young, you like to you have the opportunity to take more risks to try and get a higher yield. It's like treasury bonds, you

3:59know, risk-free, corporate bonds, equities, which is it's hugely popular, and then comparing that to Bitcoin, okay, 30% year over year, although you have to stomach the volatility, which is fun in itself, and, you know, we're on that downside right now, but I expect it fully to go be going back up. And now combining all of that on top of Bitcoin, if you look

4:21at Bitcoin as like a currency competition to the US dollar, how can we make those treasury equivalents on Bitcoin as a currency as a as an ecosystem as well? Exactly. That you summed that up very, very well. And that's the big idea here. The big idea is unlocking a interest rate backed by Bitcoin that doesn't have principal risk. So, if you were to buy,

4:46let's say you were able to go out into the market and buy a 10-year bond backed by Bitcoin and it yielded 10 or 11%, much like a lot of the Bitcoin-backed secured Bitcoin-backed loans do today. You if the interest rate environment changes, let's say the interest rate in the United States goes up to 6 or 7% or even even it went down to 1 or 2% you know, that being the 1-year, the

5:062-year, 3-year, 4-year, 5-year, whatever, you're going to have principal price fluctuation. So, your $100 you invested in this yielding note that may have been paying 11%, now if interest rates go down, it now becomes, you know, $200, so you're very happy, but if interest rates go up, your principal has been eroded to $50. So, you take on interest rate risk. The

5:27idea of STR C, of a short-term instrument backed by Bitcoin, a short-duration instrument backed by Bitcoin, is that you don't have that sort of interest rate exposure. The way MicroStrategy has designed the product is for it to trade in a very tight range with low volatility around $100, and they vary the dividend coupon the dividend rate, the coupon rate on a

5:48monthly basis to target this exact $100 price band. And by doing that, you have now a savings account instead of an interest rate speculation vehicle. So, it preserves your capital. Mhm. When a lot of people hear strategy, they I think they go to the MSTR stock, and probably the majority of retail investors are looking at that. We actually just did a

6:12Investor hub that broke down like all six asset types on Crypto Coin Show for MicroStrategy. But could you give a high-level overview for those people who they know about MSTR or maybe they have some, but these other vehicles, it's a little bit they haven't got there yet on what the difference is? Absolutely, sure. So, I founded the first MSTR

6:35podcast called MSTR True North, which was acquired by Strive last year. So, I've been deep in the MSTR and strategy space since the beginning. And the way to think about strategy is that they have a massive Bitcoin balance sheet, and then it's it's segregated into two parts. One is the leveraged part, which is the MSTR common equity, and the second is the debt part. And the

6:56debt part is what creates the leverage in the common equity. And the debt historically has been these convertible notes, which have been low cost of capital debt obligations, which strategy has paid a very low coupon on. More recently, they've switched to launching these preferred equities. They don't This isn't technically debt, it's amplification for the common. So, for

7:17the preferred equities, strategy as a corporation pays out a fixed yield to those investors, the preferred equity investors, but they're able to use the capital they raised from those preferred vehicles to buy more Bitcoin for the common holder. Therefore, the common holder has a leveraged claim on the entire Bitcoin on strategy's balance sheet. However,

7:37they're the ones paying out the dividend to the preferred preferred and debtors of strategy. So, there's I think it's five or six preferred equities in the capital structure. So, the most the senior most is Strive, which is a longer-duration professional preferred instrument. The interest rate is fixed at 10% per year based on a $100 par liquidation price.

8:01The principal then fluctuates, you know, it's gone up to 120, it's now down to 95. So, it's a longer-duration, more more volatile preferred equity. Below Strive is Stretch, the one we're talking about now. There's $5 million of Stretch outstanding. They're raising almost $300 million a week of Stretch because it's such a popular product, and it pays out

8:21monthly instead of quarterly like Strive, and it's designed to trade around that $100 par liquidation preference. And they're able to vary the dividend and issue more Stretch or order to keep it stable at that $100 price. Below Stretch, there are two there are three other instruments. There's Stream, which is the preferred equity offered in Europe. We'll disregard that

8:47one for now. There's Strike, which is a convertible preferred equity, meaning it's very much like Strive. It has a fixed 8% dividend at $100 par, but it also is able to convert into MSTR common equity. So, you get equity participation and a dividend bond-like floor. And then finally, you have Stride, STRD, which is the lowest in priority in the capital structure, and that's the

9:09highest-yielding preferred equity, but it has the least investor protections relative to the others. So, it's like a junk bond, you'd call it in their capital structure. Then below all those preferreds is MSTR common, which has again is the leveraged Bitcoin exposure. For sure. And if there was if there was a liquidation event, I believe the MSTR are like the last to get

9:29the remnants. Exactly. Yeah, and that's why we tend to look at NAV. NAV is an interesting metric because if you look like let's say MSTR, the common equity, is trading at one times NAV, that essentially means how much Bitcoin would be left for the common holders if you had to pay out all the convertible note holders and all the preferred equity holders at par, what's

9:52left, and does MSTR trade above or below that actual residual Bitcoin value? That's That's what this idea of MNAV is. Mhm, for sure. I saw recently Buck was raising the rate to 10% 7 7 up to 10% and you know, I think there's a lot of news going around around stablecoin yields right now and you know, people often compare those to bank yields in high interest and it's

10:19so low that you look like you know, you're you're gods in crypto for having higher percentages. But normally when you get to 10% if you're looking at stablecoin yields or bank yields, people get like cautious about that. Could you explain like the percentage and you know, why maybe it's okay to have a higher percentage? Absolutely. Do you mind if I get into

10:39kind of the Buck structure first so the listeners have an understanding? So when Strategy's IPO'd in July of 2025 the founder and CEO of Buck, Travis VanderZanden, who previously founded Bird Scooters, the electric scooter company, he brought me on and we decided to create this savings coin backed by STR C because STR C is ultimately the perfect product. It's

11:01effectively STR C is like a stablecoin in the public markets. It's like a money market fund overcollateralized by Bitcoin. So STR C on Strategy Capital structure is three times overcollateralized. It's anywhere from three to six times overcollateralized by the Bitcoin on the balance sheet. They have 66 years of dividend coverage for all the preferred equities and they have

11:22two years of that dividend coverage held in cash on the balance sheet. So it's one of them it is the most overcollateralized fixed income instrument in the entire market. That yield is probably one of the most reliable forms of yield again in all public markets. So we believe Stretch is this amazing instrument for investors who are looking for stable

11:41principal and high yield. Mhm. So we created we decided that the best way to integrate this into the kind of stablecoin market is create what we call a savings coin. So you can think of stablecoins as your checking account and Buck as a savings coin as your savings account. Your stablecoins pay no yield, Buck pays 10% yield right now via monthly distributions. So if you

12:04hold Buck through the month of March on April 4th, you get paid your 10% APY equivalent yield in the form of extra Buck tokens. We back that all by STR C in our treasury. We have three smart contract audits from Cypher and Spearbit Halborn and we do monthly reserve attestations from the network firm. So we're we're bringing STR C on chain and I think what I really want to

12:32hammer home for people is that yes, in the past yields have been very risky, especially stablecoin yields, thinking about Terra Luna and other different algorithmic stablecoins. Stretch and by nature Buck are backed by Bitcoin collateral. That Bitcoin collateral is held on a publicly trade publicly listed balance sheet that's audited by big big three accounting

12:53firms. So this is the most verifiable, most audited collateral pretty much in the entire crypto ecosystem and so I'd advocate that you know, 10 10% yield is one of the most sustainable yields we've ever seen in crypto here offered by Buck. That's really cool and can you further explain the increase in value from just owning STR C to actually bringing

13:19it on chain and introducing the Buck savings? Yeah, absolutely. So in our V2 upgrade which will happen sometime this month, we're switching this monthly distribution to a yield stream form to be more integrable into DeFi and other crypto native protocols. So obviously STR C you have to hold to the ex-dividend date. That's the record date when you'd have to be holding the equity

13:43to get your dividend payout that following month for your for your monthly hold. Therefore, let's say you wanted to hold STR C for three days from April 3rd to April 6th. You'd be unable to claim your your yield for that period of time. With Buck it's different, right? You're going to be able to hold Buck for three, four days and collect your yield in the form of a yield stream

14:05When you swap from the time you swap into the time you swap out. So that's a massive value add. Two, there's a lot of systems which you can integrate Buck into on chain, whether that be Pendle yield speculation or Morpho leverage looping and collateral lending, right? Like these I believe are massive unlocks for a product with such high yield. I think of STR C and by virtue Buck as

14:28the ultimate carry trade. It's a Bitcoin backed yield which is twice that over twice that of the USD risk-free rate which is 3.5%. Mhm. You can arbitrage that yield in the form of maybe going two times long Buck, right? Or by and by virtue STR C or by leveraging up the yield on Pendle. I think there's a lot of ways to get forms of yield in the crypto market in the

14:52crypto ecosystem by integrating with a yield stream product like that. Mhm. It's really interesting and for people that are you know, maybe they're they're strong in they understand Bitcoin but I feel like there's a lot of traditional investors that maybe they've bought into MSTR or some of these preferred stock and they don't actually have crypto yet.

15:13I don't know the exact percentage but I could imagine there's a lot of people that have yet to pull the trigger on getting deep on chain. How how easy is the onboarding for people that are inexperienced in crypto to get the right coins and get it deposited into the into the Buck ecosystem? Absolutely. So we've made it as simple as possible for people to get Buck

15:36exposure specifically. You can mint directly with USD C Buck into your own wallet via our smart contract window at app.buck.io. We also have a curve pool where a lot of people trade stablecoins. You can swap directly into Buck there. The biggest hurdle is getting into USD C, having self-custody of your USD C which you can do through you know, major

15:58crypto exchanges like Coinbase, Kraken, etc. So if you can get over that hurdle which isn't too difficult, then minting Buck directly and holding it is very very simple. And one of the benefits of Buck over a lot of different yield products in the market is that it's a single token and it's very simple. Other protocols have all this staking and there's

16:19lockup periods where you know, you don't exactly know how you're getting your yield or how long you have to hold it or if you can even swap out of the product. With Buck you instantly swap in you start getting your yield and you can swap out anytime. It's seamless. Yeah, that is really a nice thing about on chain. That example you gave where holding something for three days, you

16:40know, that can easily be tracked and provide the appropriate amount of yield and that just isn't possible in TradFi right now. No, it's not. You know the fractional nature and the real-time nature of the on chain ecosystem has a massive value add. There's a reason people like Larry Fink, the CEO of BlackRock, are saying all of finance is moving on chain in 2026. So this is a

17:05massive movement that's just getting started. Definitely. And with the savings coin, you mentioned USD C. When I hear that I think of you know, Ethereum or layer twos but Ethereum mainly and having it as a Bitcoin backed yield, is the ecosystem built on Ethereum and does it tie into Bitcoin and how do those work together? Absolutely. So I think of Bitcoin as

17:30layer one digital capital. So it's the store of value settlement layer for all transactions. It's Bitcoin what it that enables Strategy to create such a robust, strong collateralized balance sheet and issue a product like STR C. The Nasdaq exchange where STR C actually trades, I think of as a layer two sort of layer two payment or infrastructure system. It's not a payment system but

17:54it's a transaction system. It's is an exchange. Ethereum I think in much the same way. So we're built Buck is built on top of Ethereum rails and it's great for settlement and smart contract implementation. The store of value, all the collateral is still the Bitcoin owned by Strategy on their balance sheet, audited again by big three accounting and for those reasons I think Ethereum and

18:18Bitcoin are are working together in a very coherent fashion. Bitcoin being the store of value, Ethereum being kind of the transaction and digital computing rails that are enabling the on chain on chain Buck issuance. Mhm. Definitely, that makes sense. And does the price of Bitcoin fluctuating make any difference with the savings or the potential yield percent in the

18:43future and you know, how STR C and how Buck savings coin might operate? Great great question. So over the past three months obviously Bitcoin is four months now, Bitcoin's down about 45%. During that period of time STR C has remained stable at $100. That's a function of again the overcollateralization in Strategy's balance sheet in Strategy's balance sheet. So because

19:08they're three to six times overcollateralized by Bitcoin Bitcoin can fall another 50% and Stretch will still be overcollateralized and Strategy will have 20 years worth of dividend payments for their preferred products. Therefore, while Stretch isn't perfectly non-volatile, the volatility has dropped down below 3% and I'd argue on a risk-adjusted basis

19:28you're getting the well, not on a risk-adjusted basis but in a in terms of Sharpe ratio, Stretch is the highest performing product in the market. Sharpe ratio being the return, the yield divided by the volatility. So Bitcoin's volatility has been isolated on Strategy's balance sheet to fund a low volatility, high yield instrument like STR C. Very cool. Well, I'm looking forward to

19:50to the price of Bitcoin going up and meanwhile the further tokenization of the stock market and more people in tradfi even those that are outside of the MicroStrategy ecosystem getting involved and then seeing the potential of hey there's higher yield mechanisms potentially available inside of on chain rails and we don't have to be taking crazy risks like the price of Bitcoin going

20:18down 45% that's not going to happen if we're using a savings coin. Yeah exactly there's ways to insulate yourself from Bitcoin's price volatility via a product like Buck where you're not taking on sort of crazy on chain leverage risk this is all backed by a publicly traded balance sheet and it's audited. Mhm. Moving forward I'm expecting Bitcoin to be turning around here soon hopefully

20:45but that's just my opinion but what are the main things that you are focused on as head of treasury with Buck in growing the platform? Absolutely yeah. You know the beautiful thing about Buck and about STRc is there's a lot of time time based adoption here. So I spent a lot of time understanding the traditional financial markets and understanding how STR will be integrated

21:09into the financial ecosystem and most big pension funds and endowments and institutional investors bond funds high yield preferred funds all have mandates that they're to purchase a product until it has a three year track record. So most of the volume and purchasing you've seen on STRc is retail right now STRc is made up ownership is pretty much

21:3180% retail ownership. Over time that will shift into more institutional ownership. I see the same thing happening with Buck we're growing now but over time we talked to a lot of hedge funds and a lot of institutions and they like to see a strong track record of the smart contracts performing on chain in addition to the smart contract audits. So we're really continuing those

21:54conversations and keeping you know big money in the back of our minds because every day that goes by and STRc's track record is proven in the public markets and Buck's track record is proven in the crypto markets and new pools new liquidity new implementations again on Morpheus and Pendle are unlocked it breeds more demand and confidence in the protocol. So that's what we're doing

22:19here at Buck. Yeah no that's really exciting and it's nice that you know retail can can get in and that it's 80% retail approximately right now that's actually really cool and I'm sure they'll be proven right once the big money comes in so you mentioned there Morpheus and Pendle what's the what's the difference or what's the capabilities on going to those platforms or going to

22:44the Buck main site? Absolutely so if you hold Buck you get 10% yield that beats anything in the crypto market right now so that in and in it of itself is a massive opportunity. On top of that we've been running rewards campaigns via Merkle which is a rewards distribution engine. So we recently just had a whale mint 800k of Buck and provide liquidity on our curve

23:09pool which we're incentivizing. So you take on you know split Buck USDC risk on curve and right now the Merkle incentives are paying out about 20% APY so again we're comping that with extra treasury money we have. Moving forward we're going to continue to run those campaigns those incentive campaigns as we grow our TVL from money we have in the business in our treasury

23:30on top of the 10% yield. Morpheus and Pendle are different defi protocols and Pendle is actually one of the fastest growing defi protocols out there and it's a way to segregate the yield. So what Pendle does is it creates a speculation on the future yield of the token and then a fixed return that being the PT token on the yield. So it's essentially a futures

23:51curve and it allows people to take leverage out on the future expectation of the yield on something like Buck on the on the actual underlying and then also to lock in the yield on the specific underlying for a certain period of time. We have not yet integrated into Pendle that will be coming in the next couple of months and I think that'll be a massive opportunity for those people

24:10that believe in STRc STRc's yield the durability of that yield and want to leverage it on a platform. Morpheus is a decentralized lending protocol where you can borrow against your Buck and potentially put your stable coins that you borrow to work elsewhere or buy more Buck and lever up a little bit. This was a massive unlock for me because I've I've been trying to leverage my

24:33STRc in brokerage accounts in traditional financial rails and it's very difficult it's difficult to get good borrowing because you know the traditional financial markets the brokerage accounts the exchanges aren't where the on chain finance is yet. So Morpheus gives people the opportunity to enhance their Buck yield and it's something we're actually seeing now

24:55Strive Asset Management just launched an ETF that is leveraged STRc within the equities market. So you can do that same sort of thing on chain with protocols like Morpheus. That's very cool I'm going to leave some links to that as well and I would love to follow up when the Pendle integration becomes live. So Dan if you're just looking to learn more

25:18about the savings coin and you know the basic 10% APY part what's the best way to get started with that? Absolutely so our website is buck.io you can visit our website look at all our transparency our audits our reserve attestations the team then you can visit our docs which are directly on buck.io it's one of the sub pages and you can learn more about the

25:44implementation the smart contract implementation everything you need to know about Buck the savings coin. In addition we have a X page at bucktoken you can visit that and learn more and anyone's also free to reach out to me at Hillary h i l l e r y underscore Dan on X and I'd be happy to answer any questions or receive any inbound communication. So those are the main

26:07places to reach us. Awesome that sounds great Dan and I appreciate your insights into not just on chain yield but strategy and all of the different types of assets. I think there's a lot of people that they just think strategy is MSTR and it's so much more than that and it can be stable and it can be over collateralized not exposed to the volatility of Bitcoin and build

26:32different higher yield savings like like Buck on there. So this is really cool I'm wishing you and the team all the best moving forward and would love to follow up again in the near future. Absolutely this has been great interview and thanks for having me on.