InfiniFi: Unlocking Liquid Yield with Onchain Reserve Banking - What You Need To Know
Ethena & Morpho Partnership, Fractional Yield Amplification & More
Since emerging from stealth with the aim of reengineering traditional reserve banking onchain, InfiniFi has steadily positioned itself at the intersection of transparent asset-backed lending and yield-bearing stablecoin infrastructure.
Today, that thesis evolves with a strategic alignment with Ethena. This partnership integrates infiniFi’s fractional reserve engine with Ethena’s primitives, unlocking new reward flows, deeper capital efficiency, and composable access layers for sUSDe and Principal Tokens (PTs).
With rewards now stacked across both ecosystems and a growing set of structured products targeting specific risk profiles, infiniFi continues to extend its lead in programmable yield construction, currently offering one of the highest yields:
In today’s edition, we’ll discuss what InfiniFi offers, the Ethena & Morpho partnership, and what users can expect from the protocol going forward…
Introduction
InfiniFi was designed to abstract and recompose stablecoin yields in a way that mimics traditional financial rails but with better terms, clearer transparency, and programmable flexibility. The protocol enables users to deposit stablecoins into a shared reserve pool that offers either immediate liquidity (senior tranche) or enhanced returns via lockups (junior tranche). Stablecoins accepted for deposit include $iUSD, $USDC, $USDT, sUSDe, and USDe—all of which are converted into $USDC before deployment.
This fractional reserve structure mirrors how banks manage deposits versus loans, but infiniFi adds onchain visibility, composability, and user-directed allocation into protocols like Aave, Pendle, and now Ethena.
InfiniFi currently boasts $35M in TVL to-date.
infiniFi + Ethena: Stacking Yield Without Lock-In
Ethena, the synthetic-dollar yield protocol that has become a leading source of stable APY in DeFi, backed by delta-neutral derivatives strategies. infiniFi leverages this by wrapping sUSDe and PT-sUSDe into structured products, where users can either hold liquid iUSD (which forgoes yield for composability) or lock into PT-iUSD to access enhanced returns. For instance, sUSDe’s base APY (~6%) can be amplified to over 15% by locking iUSD into fixed-duration positions (via PT-iUSD), with durations ranging from 1 to 8 weeks.
This works through infiniFi’s onchain fractional reserve model where senior depositors maintain liquidity, while junior tranches lock capital in exchange for amplified returns. In other words, by pooling liquid deposits and allocating a portion toward higher-yield locks, infiniFi extracts duration premiums and shares those benefits with even its most conservative depositors.
Morpho Integration: Structured Leverage with Principal Tokens
The Ethena integration also unlocks a complementary strategy through Morpho Labs, where PT-iUSD (Principal Tokens representing locked iUSD) can be used as collateral to borrow USDC at up to 91.5% loan-to-value (LLTV).
This creates a new looping strategy for users:
What makes this particularly compelling is that PT-iUSD is non-directional and returns are fixed at maturity, and borrowing against them via Morpho adds leverage without introducing liquidations tied to asset price.
Points Flywheel
On top of structural yield, both integrations now offer ecosystem rewards. Depositing into Infinifi and locking via PT-iUSD accrues InfiniFi Points and may qualify for Ethena SATS, depending on current campaign eligibility. Fluid, Curve, and Balancer LP venues also amplify rewards (up to 30x SATS), and Pendle LPs offer up to 4.5x InfiniFi points, incentivizing liquidity provision across the stack.
Important Links
Disclosure
Alea Research is engaged in a commercial relationship with InfiniFi as part of an educational initiative, and this newsletter was commissioned as part of that engagement. This content is provided for educational purposes only and does not constitute financial or investment advice. You should do your own research and only invest what you can afford to lose. Alea Research is a research platform and not an investment or financial advisor.
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