YLDS Yield-bearing Security Token Launch on Sui! SEC Compliance Sparks Institutional Fundraising Wave

Figure launched the first SEC registered yield-bearing stablecoin YLDS in the United States, with Sui becoming the second deployed chain after Provenance. SUI serves as collateral for lending, while DeepBook optimizes capital efficiency through composite yields. Can institutional-level DeFi drive up prices?

Sui partners with Figure to build compliant DeFi infrastructure

On October 14, the trading price of SUI was approximately $2.67, dragged down by the overall sluggishness of the cryptocurrency market, with the token falling about 33% from its high of $4.00 in mid-September. However, a significant collaboration may change SUI's mid-term trend, as Figure Technology Solutions announced it will launch its SEC-registered yield-bearing security token YLDS on the SUI blockchain, marking the first time this token goes live on a Layer 1 network outside of the Provenance blockchain.

Sui's official Twitter announced this strategic alliance on October 14, emphasizing three core values:

1. Achieve USD up/down slope through YLDS: Bypass centralized exchanges and reduce counterparty risk.

2. SUI as potential Collateral for Figure: Native tokens directly participate in lending agreements, enhancing usability.

3. Compliant and Scalable DeFi Infrastructure: Institutional-Grade Financial Products under SEC Regulatory Framework

This cooperation is not only a technical integration, but also marks Sui's strategic positioning in the regulated DeFi space. Unlike many blockchains that pursue "regulatory arbitrage", Sui chooses to embrace compliance frameworks, which may become a key differentiating advantage in attracting traditional financial institutions.

Three Major Reasons to Choose Sui

Figure co-founder and Executive Chairman Mike Cagney stated: "The issuance of YLDS on Sui represents the beginning of a broader plan aimed at deploying SEC-registered, yield-generating security tokens across multiple blockchain networks. We are honored to take this first step together with Sui, thus eliminating traditional intermediaries in financial institutions."

Why did Figure choose Sui as the first stop for YLDS expansion? Technical considerations include:

High Throughput and Low Latency: SUI uses the Move programming language and a parallel execution engine, with a theoretical TPS reaching 297,000, and stable performance maintained above 20,000 in actual tests. This level of performance is crucial for financial applications that require real-time settlement.

Object-Oriented Model: Sui's data model allows assets to exist independently, rather than relying on global state. This design is particularly suitable for the complex permission management and compliance tracking of tokenized securities.

Institution-Friendly Ecosystem: Sui has established partnerships with several traditional financial institutions, including the SUI Trust Fund with Grayscale and the native issuance of USDC with Circle, creating a network effect for institutional adoption.

Evan Cheng, co-founder and CEO of Mysten Labs, emphasized in a statement: "The introduction of YLDS to Sui marks a significant upgrade for regulated DeFi, enabling institutional users to access compliant and dynamic assets with Sui's unique speed and security. By combining regulated, yield-generating security tokens with seamless composability, YLDS further solidifies Sui's position as the leading platform for real-world asset adoption and institutional-grade financial infrastructure."

YLD Yield-bearing Security Token: Redefining stablecoin utility

YLD is not a stablecoin in the traditional sense, but rather a revolutionary financial innovation - a SEC registered yield-bearing security token. This design addresses the long-standing core contradiction in tokenized finance: the balance between compliance and yield.

Essential Differences from Traditional Stablecoins

Traditional stablecoins like USDT and USDC provide value stability, but holders cannot earn the income generated from the underlying USD reserves. Issuers (such as Circle and Tether) retain the interest income from U.S. Treasury bonds, and users only receive a 1:1 exchange guarantee.

YLD breaks this model by directly embedding returns into token design:

Asset-backed Structure: YLDS is supported by short-term U.S. Treasury bonds and repurchase agreements (Repo), which are institutional-grade liquidity instruments, with an annual yield typically ranging from 4.5% to 5.5% (depending on Federal Reserve policy interest rates).

Yield Transmission Mechanism: As a dynamic debt security, YLDS tokenizes real-world instruments to achieve on-chain composability. Holders receive interest generated from the underlying assets in proportion, realized through token appreciation or periodic distribution.

SEC Compliance Framework: YLDS is registered under the Securities Act of 1933, and holders enjoy legal protection as securities holders, including rights to information disclosure, redemption rights, and more. This compliance allows institutional investors to allocate YLDS within their internal risk control framework.

The Catalytic Effect on the DeFi Ecosystem

The introduction of YLDS brings a qualitative change to the Sui DeFi ecosystem:

Risk-Free Yield Benchmark: Traditional DeFi lacks a risk-free interest rate anchor, leading to yield farming being highly dependent on token inflation incentives. YLDS provides a risk-free yield benchmark based on U.S. Treasury bonds, allowing protocols to build healthier yield curves.

Institutional Capital Access: Institutional investors such as pension funds and insurance companies are restricted by compliance requirements and cannot directly hold unregistered crypto assets. The SEC registration status of YLDS opens the door for these funds.

Composable Release Innovation: Developers can integrate YLDS into lending protocols, derivatives platforms, yield aggregators, etc., to build complex strategies for yield optimization.

DeepBook Margin Trading: Compound Yield Optimization Capital Efficiency

The native liquidity layer of Sui, DeepBook, is about to launch a margin trading system that will elevate the yield potential of YLDS to new heights.

Independent stablecoin lending pool design

DeepBook plans to establish an independent stablecoin lending pool for margin trading, with YLDS as the core asset. The innovation of this design lies in:

Three Sources of Income:

Transaction Fee Income: The transaction fees generated from margin trading are distributed proportionally to liquidity providers.

Borrowing Interest: The borrowing interest paid by leveraged traders (usually annualized at 8% to 15%)

Liquidation Earnings: A portion of the penalties in liquidation events belongs to the liquidity pool.

Compound Yield Mechanism: This triple income is automatically reinvested, generating compound returns. Assuming a base YLDS yield of 5%, combined with lending pool income, the total annualized yield could reach 12% to 18%, far exceeding traditional stablecoin yield products.

Native Swap Optimization: DeepBook's native swap feature allows traders to seamlessly switch between different assets. YLDS, as the settlement layer, can optimize capital efficiency—traders can execute trades without having to withdraw funds from yield products.

Synergy with SUI coin

Figure clearly indicates that SUI will serve as potential Collateral in the lending protocol. This creates a positive flywheel effect:

Demand-side Driven: To conduct leveraged trading on DeepBook, users need to stake SUI as collateral. As the margin trading volume increases, the demand for locked SUI rises.

Yield Enhancement: Staked SUI may earn dual rewards—native staking rewards (currently around 3% to 5%) plus a share of the fees from the lending protocol.

Liquidity deepening: More SUI locked means a decrease in circulating supply, which could drive up prices under unchanged demand.

SUI Price Outlook: Key Technical Levels and Catalysts

Despite the sluggish macro market, the deployment of YLDS provides a medium-term bullish narrative for SUI.

Key Price Levels

Upward Target:

First target: $3.75 - September rebound high, a breakout will confirm a short-term trend reversal.

Second target: $4.00 - historical high, psychological barrier

Extended target: $4.50 to $5.00 — if institutional adoption exceeds expectations.

Downside Support:

First support: $2.50 - integer level and previous consolidation area

Second support: $2.20 - 200-day moving average position

Key support: $2.00 — losing this level will change the medium-term structure.

Currently, SUI is at $2.67, with a 40% upside potential to the target of $3.75, while there is only a 6% downside risk to the support at $2.50. From the risk-reward ratio perspective, the current position is attractive.

Price Catalyst Timeline

Short term (1 to 2 months):

1. The official launch date of YLDS on the Sui mainnet has been announced.

2. DeepBook margin trading testnet launched

3. Announcement of the allocation of YLDS by the first batch of institutional investors

Medium-term (3 to 6 months):

1. DeepBook margin trading mainnet launched, trading volume data released.

2. More RWA projects choose Sui as the deployment platform.

3. SUI included in major cryptocurrency indices or institutional allocation portfolios.

Long-term (6 to 12 months):

1. Figure deploys YLDS on other blockchains, turning Sui's first-mover advantage into network effects.

2. Clarification of regulations promotes more traditional financial institutions to enter the Sui ecosystem.

3. Sui TVL breaks through the 5 billion dollar milestone.

Institutional-Level DeFi Era Begins

The launch of YLDS is not just a single token event, but marks a paradigm shift in the cryptocurrency industry from "regulatory confrontation" to "regulatory cooperation." SUI is building a true bridge between traditional finance and blockchain technology by embracing regulatory frameworks.

For SUI holders, this signifies a fundamental change in the logic of value capture—from purely speculative trading to a fundamental support based on actual usage demand. As the YLDS ecosystem matures, DeepBook trading volume increases, and institutional funds flow in, SUI may gradually rise from its current price of 2.67 USD to over 4 USD.