Main Street

Institutional Yield for Everyone - Democratizing the Options Box Spread onchain, with $msY.

[Main Street @Main_St_Finance]

Introducing the msY Vault:
Democratizing Access to Box Spread Yields

[Main Street @Main_St_Finance]

Main Street Update

We wanted to provide a further update on the remaining box positions, the minter, and the Morpho market.

The key point is that Main Street remains collateralized above 100% when valuing the remaining box positions at expiry. The boxes are expected to mature at $1, and our focus remains on liquidating them safely and efficiently as they move closer to expiry.

We are continuing to actively monitor the remaining boxes. As these positions get closer to expiry, pricing generally improves and we are able to exit more of them without taking unnecessary haircuts. Whenever boxes can be sold in a way that is accretive and does not harm overall backing, we will continue to do so.

As USDC is freed up, there will be two separate processes:

1. msY holders outside of Morpho
For msY holders outside of the Morpho market, USDC will continue to be added to the minter and used to support the pool. This allows users to continue exiting through the normal pool/minter process as liquidity is restored.

The minter will continue buying msY from the pool and redeeming/burning that supply over time. As more boxes are liquidated or mature, more USDC can be used to support this process, with the goal of continuing to reduce circulating msY supply outside of Morpho.

2. USDC lenders in the Morpho market
Morpho needs to be handled separately because of the way Morpho v1.1 works under extreme utilization.

Some looped borrowers are now accruing interest at very high rates. Over time, this can cause their debt to become larger than the value of their msY collateral, even when valuing msY at $1. This creates a technical bad debt issue inside the Morpho vault.

It is important to be very clear: users who lent $1 of USDC into Morpho should receive $1 of USDC back. The issue is not around the original principal that was lent into the market. The issue is the excess interest that has accrued on top due to extreme utilization.

That excess interest will effectively need to be sacrificed and remain as bad debt within the vault. This does not mean that lenders lose the dollar they originally lent. It means that the additional interest above principal cannot be safely paid out without creating unfair outcomes elsewhere.

Because of this, the msY collateral currently inside the Morpho market will effectively remain there and be treated as written off from the rest of the system. The portion of backing associated with that msY will instead be allocated to USDC lenders in the Morpho market through a dedicated claim process.

In practice, this means:

msY outside of Morpho will continue to be bought through the pool/minter and redeemed over time.

The circulating msY supply outside of Morpho will continue to be reduced as USDC becomes available.

The msY left inside the Morpho market will remain there as the residual written-off supply.

Morpho lenders will receive a separate USDC claim corresponding to the principal they originally lent.

Once the remaining boxes have either expired or been liquidated, and the final amount of available USDC is known, we will create a dedicated claim contract for Morpho lenders. This ensures the process is based on final confirmed numbers and avoids creating unfair outcomes between different groups of users.

The end state is designed to be clean: msY outside of Morpho is bought and redeemed through the minter until that circulating supply is reduced down, while the only remaining msY will be the written-off collateral inside the Morpho market. Morpho lenders will then claim USDC separately, and economically the system nets down as though the remaining redeemable msY supply has been reduced to zero.

We understand that this has been a stressful period, especially for users affected by the Morpho market. The team is working through this carefully and methodically to avoid rushed actions that could create worse outcomes.

The goal remains the same: continue liquidating boxes efficiently, restore liquidity through the minter for msY holders outside of Morpho, and ensure that Morpho lenders are able to recover the USDC they originally lent.

We will continue to provide updates as more boxes are liquidated and as more USDC becomes available.

[Main Street @Main_St_Finance]

msY Portfolio & Redemption Update

We want to provide a clear update on the current msY portfolio, the remaining box-spread maturity profile, and the path forward for restoring liquidity to the minter.

As previously communicated, the msY box-spread strategy began approaching capacity in its original short-duration Deribit execution environment. In response, Main Street expanded execution across additional centralized venues and OTC box-spread counterparties in order to continue optimizing risk-adjusted yield for holders and avoid forcing new capital into increasingly compressed shorter-dated opportunities.

As part of that expansion, certain OTC box-spread opportunities were executed at longer maturities than the initial short-duration target range. Following the unwind of the shortest-dated and most liquid positions during the initial phase of the Morpho market squeeze, the remaining portfolio now consists of boxes with approximately 60 to 340 days remaining to expiry. The remaining book is therefore naturally more concentrated in the medium-to-longer dated part of the maturity ladder, because the shortest-dated liquidity was used first to support the minter and reduce near-term pressure.

Importantly, this does not change the core economics of the strategy. These are fixed-payoff box-spread positions. If held to expiry, and assuming the relevant venue or counterparty performs, the positions accrete toward their known maturity value. The current situation is therefore primarily one of timing, secondary-market liquidity, and redemption pacing; not a change in the expected terminal payoff of the portfolio.

Current portfolio position:
Current CR, assuming boxes are held to expiry: 100.04%
Insurance fund: $525,527 in msUSD
Insurance fund treatment: if required, the msUSD held in the insurance fund can be burned, increasing protocol coverage
Coverage including the insurance fund: above 100%

Our priority is to preserve full backing and avoid crystallizing unnecessary losses. We are actively exploring opportunities to unwind or sell selected boxes where executable pricing is available and where, after taking into account the insurance fund and any applicable protection mechanisms, the system remains above 100% coverage. Where that threshold can be met, we intend to take those opportunities and use the proceeds to continue refilling the minter.

We do not expect that every remaining box necessarily needs to be held all the way to expiry. As boxes move closer to maturity, the discount between secondary-market pricing and maturity value should naturally compress, which can create further opportunities to exit closer to NAV without impairing coverage. This means liquidity can be restored progressively through a combination of scheduled expiries and selective secondary-market unwinds where pricing is acceptable.

Where secondary liquidity is not available on acceptable terms, we will continue following the approach outlined in our risk framework: allow box positions to mature, release liquidity as expiries occur, and refill the minter as capital becomes available.
Selling fixed-payoff positions at distressed marks simply to accelerate liquidity would be value-destructive for holders. Waiting for better execution, selectively unwinding where coverage remains above 100%, and using the insurance fund as intended gives the protocol the strongest path to preserve backing and restore liquidity in an orderly way.

This is a timing and execution-management issue, and the portfolio remains structured around fixed-payoff positions that accrete toward maturity value. We are confident in the path forward and will continue to provide updates as liquidity is released, boxes are unwound, and the minter is refilled.

Our focus remains unchanged: preserve NAV, protect holders, avoid uneconomic liquidations, maintain coverage, and work through the maturity ladder in the most responsible way possible.

[Main Street @Main_St_Finance]

Please be cautious about impersonator accounts and malicious links circulating right now.

Only trust messages and links from @Main_St_Finance. If it's not from here, don't click and don't engage.

[Main Street @Main_St_Finance]

Mainstreet Update — Morpho, Proof of Reserves & Liquidity

We want to address the current situation around the Mainstreet Morpho market and provide clarity.

First and most importantly: Mainstreet remains fully backed.

The recent shutdown of our third-party proof-of-reserves dashboard does not reflect any loss of assets or deterioration in portfolio quality. This is an infrastructure and reporting issue, not a solvency issue.

As a result of the dashboard going offline, the oracle supporting the Morpho market is expected to pause within the next 24 hours. This has created understandable concern and triggered elevated borrowing rates as leveraged loopers rush to unwind positions.

We are actively responding on multiple fronts:

Engaging alternative proof-of-reserves providers to restore independent verification as quickly as possible.

Continuing to unwind box spread positions and redeploy liquidity into the minter / Morpho ecosystem.

Preparing to act as liquidity provider and liquidator of last resort if necessary to prevent disorderly market conditions.

Over the past several days, we have already unwound our shortest-dated box positions and released free cash, with more than $8 million in USDC already transferred to the minter to support liquidity and assist with unwinds.

Mainstreet’s core portfolio consists primarily of box spreads. These are structurally low-volatility positions designed to converge to fair value at expiry, making them highly predictable from a NAV perspective when held to maturity.

However, box spreads are not always frictionless to exit early.

Selling before expiry may involve:

Transaction fees
Wider bid/ask spreads
Temporary market-maker discounts
Liquidity-dependent haircuts based on expiry and position size

This means that while our portfolio remains fully backed, converting positions into immediate liquidity depends on prevailing market depth and market-maker appetite.

Our priority is clear: protect NAV while maximizing liquidity for the protocol.

We are willing to accept elevated fees and modest execution costs to accelerate liquidity release, supported by the protocol insurance fund. However, we will not realize losses beyond the insurance fund purely to force immediate exits. If market pricing becomes materially irrational, we will allow positions to continue toward expiry and realize full value at settlement, as outlined in our risk disclosures and discussions with key partners.

If borrowing rates continue to rise and liquidations occur, Mainstreet is prepared to step in as liquidator of last resort. As additional USDC is freed from box maturities and unwinds, part of that capital may be deployed to absorb and liquidate stressed Morpho positions to minimize bad debt risk.

Weekend liquidity is currently limited, and market-maker quotes are materially less favorable than during normal trading hours, which temporarily slows execution. We expect to have a clearer picture over the coming days and will continue providing updates as progress is made.

We understand this is a stressful situation and sincerely appreciate the community’s patience and trust.

Our commitment remains unchanged: protect user funds, preserve NAV, and restore normal market conditions as quickly and responsibly as possible.

[Main Street @Main_St_Finance]

"Space what? IP who? What are you on about?

The only thing rocketing is the yield you're earning from Main Street Finance.

btw that'll be $20,000. We accept $msUSD."

[Main Street @Main_St_Finance]

For the next 48 days, you can lock in and earn 12.7% APY with $msY PT tokens from @pendle_fi.

That's about how long it'd take to walk from Washington to Miami, earning yield the whole way.

Or you could just stay on Main Street and skip the blisters...

[Main Street @Main_St_Finance]

Side quest: grab a bag of YTs, earning yield and Gamma Points until maturity (July 29. 2026):
https://t.co/UUQO76MO8Z

[Main Street @Main_St_Finance]

@StableTableDeFi This stable table has nice seats 👌

[Main Street @Main_St_Finance]

Welcome to Main Street, where:

> Yield does not depend on market sentiment or funding rate cycles
> TVL grew 15%/30d while perp funding basis traders bled
> Ample room for growth before any yield compression
> Gamma points szn

Institutional yield for everyone.

[Main Street @Main_St_Finance]

Reads like the makings of a great portfolio.

Only suggestion: more Main Street 💪

[IMD @_exnihil0_]

We began the @machinesmoneyA1 Portfolio to show our conviction in the space

The portfolio is designed to benefit from a mix of yield generation and price appreciation in over 30 onchain assets

To do so, we're using prominent and emerging platforms like @strata_markets, @Zyfai_, @pendle_fi, @alturax, @roycoprotocol, @Main_St_Finance, @ExponentFinance, @noon_capital, @turtledotxyz, @AerodromeFi, @0xconcentrator, and more

All open positions are included in this thread

You also can find our most recent portfolio review here:

[Main Street @Main_St_Finance]

Intern has been staring at this $msY live yield tracker by @stablewatchHQ for 20 minutes. We're not going to stop them.

To date, Main Street has delivered $1.77M worth of yield.

[CryptoDep @Crypto_Dep]

⚡️ Stablecoins by Monthly Supply Growth

Total stablecoin market cap at $314B, up $590M (+0.17%) MoM.

@Gate USD leads supply growth at +86.9%, followed by apxUSD (+56.8%) and USDTB (+54.1%). USDe is the largest in the set at $4.51B with steady +11.8% growth.

$GUSD $apxUSD $USDTB $fxUSD $USX $M $MSUSD $USAT $rwaUSDi $USDe $DOLA $RLUSD

👉 https://t.co/uVkIDZd3Aa

[Main Street @Main_St_Finance]

We think this new wave of fixed yield is great.

We're just gonna do it the Main Street way.

https://t.co/EvumZFqb2O

[Main Street @Main_St_Finance]

Everyone's discovering "fixed yield" now. Main Street has been living it for months.

$msY quietly yields ~12% day after day because we built a machine that harvests option market inefficiency.

Fixed? No. Delta-neutral and stable? Yes.

Here's how:

[Main Street @Main_St_Finance]

"Leverage? That means risk!"

Yes, as with all things in DeFi. They are real and you deserve to know them.

⚠️ Yield isn't locked; if options market rates compress, APY follows them down

⚠️ Positions mark-to-market before expiry; 2024 saw a -7.8% peak-to-trough at 5x leverage during a vol spike. It recovered in 39 days.

⚠️ 7-day redemption; options positions have defined expiry dates, and forcing instand liquidity would mean selling at discount into thin markets.

How does Main Street mitigate these risks?

✅ Positions are delta-neutral; a 30% spot move produces an expected drawdown under 0.5%
✅ Tenors kept short; 1 to 3 months with laddered expiries
✅ Insurance fund building separately from the vault NAV

[Main Street @Main_St_Finance]

@0xNairolf Plenty to be done with onchain options. Even @VitalikButerin thinks so.

Untapped potential in this neck of the woods. But we're here for it.

[Main Street @Main_St_Finance]

Another storefront is open for business on Main Street: $msY is now live on @0xspiralstake V2.

Leverage msY yield up to 5.7x in one click, powered by Spiral Stake's atomic execution layer and @Morpho markets.

Institutional yield for everyone, amplified.

[Main Street @Main_St_Finance]

Find the $msY market on Spiral Stake here:

https://t.co/TgAsdztCKJ
https://t.co/ZxtKzWbW2o

[Spiral Stake @0xspiralstake]

Introducing Spiral Stake v2

An atomic & composable execution layer for onchain leverage markets on Ethereum. Powered by @Morpho’s risk isolated markets.

Make your leveraged position (upto 9x) seamless, flexible to manage & gas efficient with v2. Entry/exit in one click.

For staked stables, stablecoin PTs and wrapped ETH.

🧵