Apyx’s apxUSD stablecoin experienced a price drop to $0.93 on June 4, marking a 7% depeg happening alongside Bitcoin's decline below $63,000 amid a broader market selloff. The protocol addressed this situation not as a failure but as a foreseeable outcome of its unique collateralization strategy, which utilizes variable-rate preferred shares rather than conventional fiat reserves.
Unlike most stablecoins, which are secured by cash in bank accounts or US Treasuries, apxUSD derives its backing primarily from STRC preferred shares held by the firm Strategy, previously known as MicroStrategy. This results in distinct price behaviors compared to stablecoins such as USDC or USDT, thereby illustrating the nuances of its operational model.
#What is Apyx’s Unique Approach?
Apyx positions itself as the inaugural Dividend-Backed Stablecoin protocol. To simplify, it utilizes dividend-yielding preferred shares from public markets as collateral to issue stablecoins on the blockchain. The dividends produced flow back into the protocol, theoretically offering a sustainable yield that typical fiat-backed competitors don’t provide.
Currently, the protocol maintains an impressive overcollateralization rate of around 104%. This means that each dollar of apxUSD issued corresponds to about $1.04 of collateral. Such a buffer, along with dividend income and cash or Treasury reserves, is structured to withstand market shocks like the one experienced on June 4.
The STRC preferred shares, introduced in August 2025, possess a par value of $100 and have historically traded below this value on four occasions, each time demonstrating resilience and recovery.
#How Does the Dividend-Backed Model Work?
Traditional fiat-backed stablecoins, like USDC, keep their peg stable because a dollar is consistently worth a dollar in a bank. On the other hand, apxUSD's collateral varies with market changes. To mitigate this volatility, the protocol employs its overcollateralization buffer and incorporates dividend mechanisms to decrease dependence on spot prices when evaluating the health of the collateral.
Apyx also functions within the Morpho markets, a lending ecosystem where its strategies help prevent cascading liquidations during times of increased volatility. Instead of adjusting collateral value purely based on real-time market assessments, its system factors in dividend yields and cash reserves to alleviate temporary price disruptions.
Additionally, Apyx offers a yield-generating counterpart termed apyUSD, which captures some of the dividend income from the underlying collateral. Together, apxUSD and apyUSD represent Apyx’s fundamental product offerings, with apxUSD acting as the stable unit and apyUSD as the yield-bearing vehicle. The trading of apxUSD on Kraken since April 2026 has also granted it a level of liquidity often missing from newer stablecoin initiatives.
#What Should Investors Consider?
In March 2023, Circle’s USDC saw a brief dip to $0.87 amid the Silicon Valley Bank turmoil, evoking serious reactions due to its implications. Conversely, apxUSD's recent 7% depeg is regarded within its protocol as an expected event reflecting its operational structure.
The notable 104% overcollateralization rate affords a slim safety margin in contrast to other players like MakerDAO’s DAI, which has consistently maintained over 150% overcollateralization ratios. Although Apyx argues that its dividend income and reserves help enhance its tighter margin, it is important to note that such a level of overcollateralization does allow for less risk tolerance during significant market downturns.
Moreover, since Strategy holds substantial Bitcoin assets, the performance of STRC shares generally aligns closely with Bitcoin price movements. When Bitcoin decreases, STRC subsequently follows suit, leading to potential risks for apxUSD, the very asset designed to promote stability.