FinChain and Plume have launched FLEX & FINO, an on-chain yield strategy that uses FUSD collateral and USDC borrowing to target annualized returns of up to 7.2%, according to a Nov. 4 announcement. The product is the first release under a strategic partnership between the two firms and applies leveraged looping mechanics to an interest-bearing token backed by tokenized U.S. Treasury assets and money market funds.
The strategy allows users to deposit FUSD as collateral, continue receiving the token's native yield, borrow USDC against that position, and deploy the borrowed USDC into liquidity pools for additional returns. FinChain and Plume said the system will cap utilization at 90%, placing a limit on how much USDC can be borrowed relative to posted FUSD collateral.
That structure seeks to stack two potential yield sources: income generated by FUSD's reserve assets and returns earned from USDC liquidity positions. The stated 7.2% maximum annualized yield is based on baseline assumptions, rather than a fixed return offered to every user.
FUSD reserves underpin the strategy
FUSD serves as the base asset for FLEX & FINO. FinChain described the token as an interest-bearing real-world-asset token backed by tokenized U.S. short-term Treasuries and compliant money market funds.
According to the announcement, FUSD reserve assets maintain at least a 100% collateralization ratio and are held with designated custodians. Yield from those reserves provides the token's native return, which remains attached to the collateral position while users borrow USDC through the looping strategy.
The arrangement places FUSD in a role similar to yield-bearing collateral rather than a passive stablecoin balance. A user would retain exposure to the income generated by the underlying reserve portfolio while taking on an additional borrowing and liquidity-provision position.
That can make the strategy more capital-efficient than holding FUSD alone, but the higher projected yield relies on several moving parts. Returns from USDC liquidity pools can change, borrowing costs can rise, and collateral positions may become more sensitive to adverse market conditions as utilization approaches its limit.
Settlement terms extend beyond instant liquidity
FinChain and Plume said the redemption settlement cycle for FLEX & FINO is T+2, meaning redemptions are expected to settle two business days after a request. Interest settlement takes longer, with a stated cycle of between 14 and 30 days.
Those timelines reflect the product's connection to off-chain reserve assets. Tokenized Treasury and money-market structures can provide on-chain access and collateral utility, but the underlying instruments still operate through conventional custodial, fund, and settlement arrangements.
The distinction could matter for users who expect stablecoin-style liquidity. FUSD may be used in an on-chain lending and liquidity strategy, yet its redemption process is tied to a multi-day schedule, while yield distribution occurs on a separate and longer cycle.
The announcement outlines the 90% utilization ceiling but does not specify collateral haircuts, liquidation thresholds, margin-call procedures, or the precise mechanics used if the value of collateral or liquidity-pool positions moves against a user. Those parameters will shape the practical risk profile of the strategy more than the headline APY alone.
Partnership links RWA collateral with defi execution
FinChain said FLEX & FINO follows multiple rounds of technical work with Plume on adapting real-world assets for on-chain use, building the strategy model, and developing risk controls. Total value locked associated with the product is expected to appear under Partner Protocol and Nest Protocol after launch, based on the partnership framework.
The product is aimed at a recurring challenge for tokenized real-world assets: reserve-backed instruments can generate relatively steady underlying income, but they have often been less useful in decentralized finance applications than highly liquid crypto-native collateral. By enabling FUSD holders to borrow USDC without immediately giving up their base position, the structure connects Treasury-linked collateral to liquidity-pool activity.
FinChain also said it has integrated FUSD with KuCoin's RCMS staking mirror solution, expanding the token's stated access within that system. The announcement did not provide figures for FUSD supply, initial deposits into FLEX & FINO, or liquidity available for the USDC borrowing leg.
Plume expands its institutional asset vault offering
Plume describes itself as an open finance platform focused on institutional assets. Its Plume Vaults offer compliant, non-custodial access to assets associated with Apollo, WisdomTree, and Hamilton Lane, according to the company.
The firm also said it operates through SEC transfer-agent registration held via Kimber Transfer Agency LLC and a licence from the Bermuda Monetary Authority. Plume cited Apollo Global Management, Galaxy Digital, and Brevan Howard among its backers.
FLEX & FINO adds a more active yield strategy to that institutional-asset framework. Rather than limiting tokenized Treasury exposure to holding and redemption, the product uses FUSD as collateral that can support additional on-chain positions. Its appeal will depend on whether the extra yield generated through borrowed USDC consistently exceeds borrowing costs, liquidity-pool risks, and the operational constraints attached to reserve-backed assets.
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