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Dec 2025 | Why Lorenzo’s USD1+ chose a non-rebasing design — sUSD1+ in plain terms
@Lorenzo Protocol #LorenzoPrptocol
By late 2025, on-chain “cash” stopped being experimental and started acting like real infrastructure. Holding dollars on-chain is no longer enough; users now expect those dollars to be productive. Tokenized Treasuries helped set that expectation by pairing familiar assets with visible yield and clear custody. At the same time, regulation finally caught up. The GENIUS Act became law in July 2025, drawing a bright line around what payment stablecoins can and can’t do.

USD1+ launches right into that shift.

What’s interesting about Lorenzo isn’t just the product, but the intent behind it. USD1+ isn’t trying to masquerade as a payment stablecoin that quietly earns yield. It’s positioned as a deliberate yield instrument for stablecoin holders — something closer to a fund share than digital cash. That framing matters, because most of the real tradeoffs in DeFi live in design decisions people usually gloss over.
$BANK
Here’s the structure: users deposit stablecoins and receive sUSD1+, a token that represents a proportional claim on the USD1+ strategy. When users exit, settlement happens in USD1, issued by World Liberty Financial. That settlement layer is worth paying attention to — not as a critique, but as a reminder that in DeFi, redemption mechanics are where theory meets reality.

Now to the part people are actually debating: rebasing vs non-rebasing.

Some yield tokens rebase. Your wallet balance increases over time, even though the token’s unit price stays roughly constant. It feels intuitive, like interest accruing in a bank account. sUSD1+ does the opposite. Your token balance stays the same, while the value per token rises as yield is earned. The gains show up as price appreciation, not additional units.

That choice isn’t cosmetic — it shapes how the token behaves everywhere else.

Lorenzo’s reasoning reads less like ideology and more like pragmatism. Rebasing tokens work fine on their own, but they force every downstream protocol to explicitly support them. Many smart contracts assume balances only change when users transact. Rebasing breaks that assumption, and the result is subtle edge cases: drifting accounting, fragile collateral logic, integrations that fail quietly instead of loudly. The industry has spent years trying to eliminate these surprises.

We’ve already seen this movie in liquid staking. Lido’s stETH rebases, but much of DeFi prefers wstETH, the wrapped, non-rebasing version, precisely because fixed balances are easier to integrate. sUSD1+ feels like the same lesson applied to yield-bearing dollars: keep balances static, let the exchange rate do the work.

There’s also a regulatory undertone. Under the GENIUS Act, payment stablecoins must be fully backed and cannot pay yield to holders. If you want “dollars that earn,” you end up building something that looks like a participation token in a strategy, not a spendable coin. Lorenzo leans into that distinction. sUSD1+ isn’t pretending to be money — it’s openly a yield share that settles into a dollar token when you redeem.

Cross-chain use adds another layer. When balances can change without user action, bridges and messaging systems need extra safeguards. Static balances are easier to reason about, easier to verify, and easier to move. The value still changes — but the unit count doesn’t quietly shift while the asset is in transit. In a multi-chain world, that predictability becomes a feature.

Adoption gives some signal that this approach resonates. sUSD1+ shows real TVL, much of it on BSC — an ecosystem known for favoring assets that “just work” across venues and strategies. In that environment, non-rebasing tokens are a natural fit because they reduce operational friction.
$BNNK
None of this makes USD1+ risk-free. Lorenzo is clear that yields aren’t guaranteed, NAV can move with strategy performance and market conditions, and redemptions may follow defined schedules rather than instant exits. The non-rebasing model doesn’t remove those risks — it simply avoids adding unnecessary technical ones.

The bigger pattern here isn’t that rebasing is flawed. It’s that DeFi in late 2025 is optimizing for fewer surprises. Less obsession with flashy mechanics, more focus on portability, auditability, and clean integrations. sUSD1+ reflects that shift. It treats yield like ownership in a strategy, not a magically expanding balance.

That may not be exciting — but it’s probably why it’s gaining traction. If Lorenzo wants USD1+ to be rails for yield-bearing dollars, making the token behave like something the rest of DeFi already understands is a very intentional bet.