The Composability Issue

The Composability Issue | Week of February 17–23, 2026

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Welcome Back to PIKUP

Welcome to the twelfth edition of PIKUP.

Fear & Greed reads 8. Eight. Three consecutive weeks in single digits. The market isn't capitulating anymore — it's resigned. Bitcoin fell to $64,000 this week, down nearly 50% from its $126,000 peak. Ethereum is at $1,875. The timeline has stopped doom-scrolling and started doom-staring.

And Piku just made USP composable. Twice.

This is the Composability Issue.

Not composability as a buzzword. Composability as a verifiable fact — on two fronts. Pendle has been live with USP for a full week, and we have real data to show for it. And this week, Proposal 18 introduced the Morpho integration: USP as collateral in a live lending market. Season 2 launched on Galxe on February 19 with quests spanning social, minting, and on-chain Pendle interactions. Five simultaneous Merkl campaigns are running — the most in PikuDAO history. USP is no longer a single-mode asset. It's a yield primitive that plugs into the DeFi stack.

USP at $1.074035 — another all-time high. Nine strategies, nine positive returns. 11.03% 7-day APY. Weekly profit up 56.5% from last week. Week 8. The machine doesn't just run during bear markets. It extends.

Let's get into it.

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Piku Protocol Update

Performance & Stats

• Transparency Dashboard: dune.com/piku_dao

After last week's 5.13% APY, 11.03% is a strong recovery. The week prior to that was 20.20%. The range tells the story: BMMF's FX arbitrage yield is variable by design, and the protocol is built for this. This week, the spread widened again — and the machine responded. The 30-day APY settling at 11.74% captures the sustained story — double-digit annualized yield on a stablecoin, maintained across eight consecutive weeks of all-positive returns.

USP moved from $1.0717 to $1.074035 — a $0.002335 gain per token. That's $2.34 on 1,000 USP this week, quietly added to your balance. No staking. No claiming. Just hold.

TVL is $7.56M — up from $7.46M last week. Total supply stands at 7,039,466 USP. Capital kept entering during extreme fear for the third straight week. People are not here for bull market narratives. They're here because the architecture works, every week, regardless of what Bitcoin does.

Governance

The Most Active Protocol Period in PikuDAO History — Continues.

Last week: three proposals in a single week, all passed. This week: Proposal 18 introduced. The DAO does not stop.

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Proposal 18 — Active: Morpho Integration — Update USP Holding Incentive Allocation

This proposal introduces USP to Morpho — PikuDAO's lending infrastructure integration. If passed, the PIKU incentive distribution restructures as follows:

Before Proposal 18:

After Proposal 18:

The proposal moves 10 percentage points from the USP Holding allocation to fund two new Morpho campaigns. Morpho deepens USP's DeFi footprint: for the first time, USP becomes a collateral asset in a live lending market.

Vote on Proposal 18 on Snapshot →

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USP Backing Distribution

This is the part most protocols hide. We publish it weekly.

Week 8 Performance (Feb 16–23)

Total Backing: ~$7.57M | Weekly Profit: $13,312.59 | DAO Transfer: $1,331.26

The Bounce

Last week: $8,506. This week: $13,312.59. Up 56.5%. Here's what happened.

BMMF bounced. 7.37% APY last week. 10.97% this week. FX arbitrage spreads widened. The Turkish rate environment opened back up. BMMF delivered $9,904 in absolute profit — 74.4% of total weekly returns from a single strategy. This is the engine. When it runs hot, the whole protocol benefits.

Giza Arma Agent led all strategies at 12.00%. $1,228 in profit from a 7.46% allocation. The AI-driven strategy is finding its rhythm — this is the second consecutive week it has posted double-digit returns.

Midas mF-ONE at 10.43%. Three strategies above 10% this week: BMMF, Giza, and mF-ONE. The diversification is doing its job — when the spread environment is favorable, multiple strategies respond simultaneously.

No strategy went negative. Nine strategies. Nine positive returns. Eight consecutive weeks.

The math that matters: if you held 1,000 USP at the start of the week, it's worth $2.34 more right now. Quieter than the 20% APY weeks — still compounding. Always.

Don't trust. Verify: Dune Dashboard | DeFiLlama

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Macro Developments

Fear & Greed at 8. Tariffs overturned, then re-escalated. Inflation going the wrong way. GDP decelerating. And USP rebounded to $13,312 in weekly profit. Strange times.

Source: T. Rowe Price Global Markets Weekly Update

United States

• Supreme Court Overturned Global Tariffs — Then Trump Raised Them: The Supreme Court struck down Trump's use of emergency powers to impose global tariffs. Markets rallied — Nasdaq +1.51%, Dow +0.25%. Then Trump announced he'd raise the global tariff rate from 10% to 15%. The relief lasted hours. Risk assets gave back gains by Sunday.
• Inflation Re-Accelerating: Core PCE came in at 0.4% monthly, 3.0% YoY — up from 2.8%. The Fed's preferred inflation gauge is moving in the wrong direction. The rate cut timeline just pushed further out.
• GDP Decelerated Sharply: Q4 growth printed at 1.4% annualized — down from 4.4% in Q3. Slowing growth. Rising inflation. Stagflation is no longer hypothetical — it's in the data.
• PMI Weakest in 10 Months: February composite PMI showed the slowest expansion since April 2025. Demand weakening. Prices still elevated.
• Housing Mixed: Starts surprised to the upside (+6.2%), but Homebuilder Confidence dropped to 36. Builders are constructing, but not with confidence.
• Treasuries Declined: Hawkish Fed minutes absorbed by the market. No urgency to cut. Higher for longer.

Europe

• STOXX 600 Hit New Highs: +2.08%. European equities outperformed the US — improved earnings and capital rotating away from US tech concentration.
• PMI New Orders Fastest in Four Years: Forward indicators are turning before the output data follows.
• Industrial Production Disappointed: Eurozone December output fell -1.4%, worse than expected.
• UK CPI at 3.0% YoY: Supporting March rate cut expectations from the Bank of England.

Japan

• Q4 GDP: Major Miss: +0.2% annualized vs. 1.6% expected. Nikkei slipped -0.20%. Yen weakened to 154 JPY/USD.
• Inflation Cooling: 2.0% YoY in January — slowest in two years. Complicated for the BOJ.
• Private Consumption Stalling: Just 0.1% growth.

China

• Markets Closed for Lunar New Year: Reopening February 24.
• Hang Seng -0.58%: Quiet without mainland flows.
• IMF Forecasts 4.5% Growth for 2026: Consumption-led transition narrative.
• US-China Partial Thaw: US withdrew a disputed list of Chinese firms allegedly aiding the military.

Crypto Markets

Third week of single digits. The market is past scared.

• Bitcoin: ~$64,000. Down from ~$67,200 last week — fell nearly 5% on Sunday after Trump raised tariff rates again, triggering $434M in long liquidations. Open interest dropped to $19.5B, far below the 2026 peak of $38.3B. Bitcoin is down ~50% from its $126,000 peak. (CoinDesk)
• Ethereum: ~$1,875. Down from ~$1,965 last week, another week below $2,000. (Coinbase)
• Market Cap: Down $1.3 trillion since inauguration. (Tekedia)
• Fear & Greed: 8. Three consecutive weeks in single digits. (alternative.me)
• ETF Flows: Fifth consecutive week of outflows for both BTC and ETH ETFs — the first five-week losing streak since March 2025. Bitcoin ETFs bled ~$4B since mid-January. Feb 19 alone saw $165.76M in BTC ETF outflows; Feb 23 added another $203.8M. Ethereum ETFs shed $49.5M on Sunday. The one bright spot: Friday saw $88M flow back into BTC ETFs, led by BlackRock's IBIT ($64.5M) and Fidelity's FBTC ($23.6M) — a tentative signal of re-engagement before the weekend selloff resumed. (The Block | Farside Investors)

The takeaway: GDP is decelerating. Inflation is re-accelerating. Tariffs went from overturned to re-escalated in the same week. Rate cuts are further away than they were seven days ago. Bitcoin is at $64K. Ethereum is at $1,875. And USP is at $1.074035 — another all-time high — with $13,312 in weekly profit from nine fully collateralized strategies. When the macro gives you stagflation signals and a 50% Bitcoin drawdown, a yield-bearing stablecoin with a published backing breakdown isn't a hedge. It's the rational position.

That's not marketing. That's math.

Looking Ahead

• Feb 24: China markets reopen after Lunar New Year
• Feb 26: Proposal 18 voting ends — Morpho integration decision
• Feb 26: Current Merkl campaigns end — new cycle incoming
• March 17-18: FOMC Meeting — stagflation data will dominate the conversation
• Coming Soon: Ambassador Program Phase 1 cohort announcement

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Partner Spotlight: Pendle — How to Actually Use It

Step-by-Step. Real Numbers. No Jargon Left Unexplained.

Pendle is live with USP. This week we go beyond the introduction and get into the mechanics — how it actually works, what each strategy looks like in practice, and how to decide which path is right for you.

Start Here: The Apple Tree

Think of USP as an apple tree.

The tree itself is the principal — the underlying dollar value you put in. The apples it produces every season are the yield — the 8%, 12%, 20% APY that compounds into your token value week after week.

Normally, when you hold USP, you own the tree and collect the apples automatically. Pendle lets you separate them. You can sell the apples in advance for a guaranteed price (PT). Or you can buy just the right to collect someone else's apples (YT). Or you can provide a marketplace for others to trade apples and charge fees (LP).

Same tree. Different ways to participate in what it produces.

The Three Tokens Explained

Before anything else, here are the three tokens in the Pendle/USP system:

SY-USP (Standardized Yield) — The compatibility wrapper. When you deposit USP into Pendle, it becomes SY-USP first. This is Pendle's standardized format for yield-bearing assets. You don't need to hold SY directly — it's the entry point. Think of it as the translation layer between USP and Pendle's smart contracts.

PT-USP (Principal Token) — The tree, without the apples. Redeemable for full USP value at maturity (June 25, 2026). Always trades at a discount to USP because the yield has been stripped out. The discount is your locked-in return.

YT-USP (Yield Token) — The apples, without the tree. Entitles you to all USP yield generated until maturity. Always trades at a fraction of USP's price. The yield it collects is what determines whether you profit or lose.

The math that always holds: PT-USP + YT-USP = SY-USP = USP value at maturity. You cannot create value by splitting — you can only choose how you want to hold it.

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Strategy A: Buy PT-USP — Lock a Fixed Return

What you're doing: Buying USP's principal at a discount, guaranteed to redeem at full value at maturity.

Step-by-step:

1. Go to app.pendle.finance
2. Find the USP market (maturity: June 25, 2026)
3. Select "PT" tab
4. Input how much USP (or USDC) you want to spend
5. You receive PT-USP at the current market discount
6. Hold until June 25, 2026 — redeem for full USP value

Concrete example:

• USP is at $1.074035
• PT-USP is trading at $1.04
• You buy 1,000 PT-USP for $1,040
• On June 25, 2026, you redeem 1,000 PT-USP for 1,000 USP — worth approximately $1,073+ (and rising as USP continues to appreciate)
• Your locked return: the $0.033 discount per token, plus USP's continued appreciation

Can you exit early? Yes. PT is tradeable on Pendle's AMM at any time before maturity. The price fluctuates based on market-implied yield rates. If rates drop, PT prices up — you may exit at a profit before maturity. If rates rise, PT prices down — you may exit at a loss. The guaranteed return only applies if you hold to maturity.

Who this is for: Conservative allocators, protocol treasuries, anyone who wants to know their number before the period starts. You give up potential upside if USP's yield spikes — in exchange for certainty.

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Strategy B: Buy YT-USP — Go Leveraged Long on Yield

What you're doing: Buying the right to collect all USP yield until maturity, with leveraged exposure at a fraction of the cost.

Step-by-step:

1. Go to app.pendle.finance
2. Select "YT" tab
3. Input how much you want to spend
4. You receive YT-USP — the yield stream for the period
5. Yield accrues to your wallet in real time until maturity
6. At maturity, YT-USP expires worthless (the yield has been collected; principal was never yours)

Concrete example:

• YT-USP costs $0.03 per token
• USP's implied APY at time of purchase: 8%
• You buy 1,000 YT-USP for $30
• If USP averages 10% APY over the remaining period, you collect more yield than the market priced in — profitable
• If USP averages 6% APY, you collect less than implied — you lose on the position
• Your PIKU Merkl rewards (currently 3,569% APR on YT) accrue separately, on top

The risk, plainly stated: YT can go to near zero if yields significantly underperform expectations. This is a conviction position. You are betting that BMMF's FX spreads, Giza's AI strategies, and the diversified backing will outperform what the market has currently priced in.

The leverage, plainly stated: For every $0.03 you spend on YT, you get exposure to the full yield stream of $1.07 of USP until maturity. That's roughly 35x notional exposure on yield. Small capital. Large yield exposure. Risk and reward both amplified.

Who this is for: Yield conviction traders. Users who study the weekly backing table and have a view on rate direction. Capital-efficient participants who want USP yield exposure without deploying full principal.

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Strategy C: Provide Liquidity — Earn Without Picking a Side

What you're doing: Depositing into Pendle's PT-USP/SY-USP AMM pool to earn fees from traders moving between fixed and variable yield.

Step-by-step:

1. Go to app.pendle.finance
2. Select the "Pool" or "LP" tab
3. Deposit USP (Pendle automatically splits and handles the rest)
4. Receive LP tokens representing your pool share
5. Earn: swap fees + USP native yield + PIKU Merkl rewards

Why impermanent loss is structurally lower here: Unlike ETH/USDC pools where one asset can move 30% against the other, PT-USP and SY-USP converge to the same value at maturity. As the June 25 maturity date approaches, PT's price mechanically moves toward USP's value — the two sides of your LP position converge. You are LPing between two assets on a predictable convergence path, not two assets with independent volatile price action.

This doesn't eliminate IL entirely — rates can move, and the pool's composition shifts. But the structural risk profile is materially different from a standard DEX LP.

Current live data (as of Feb 24):

• Pendle LP APR: 63.28% (from PIKU Merkl rewards alone)
• TVL: $315.86K (up from $309K in Week 1)
• Plus: native USP yield + swap fees from PT/YT traders

Who this is for: Passive income stackers. Users who want USP yield with additional layers. Anyone comfortable with LP mechanics who doesn't want to take a directional view on rates.

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The Full Strategy Comparison

*YT APR is a function of small TVL — normalizes as market grows

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Common Questions

Do I need to deposit USP first? No. You can enter with USDC or ETH and Pendle handles the conversion. If you already hold USP, you can deposit directly.

What happens if I don't exit before maturity? PT automatically redeems for full USP value at maturity. YT expires with no residual value (the yield has been fully distributed). LP positions can be withdrawn at any time.

Is there a minimum amount? No protocol minimum. Standard Ethereum gas costs apply — at current gas prices, smaller positions may find the fee overhead significant relative to returns.

Can I lose more than I put in? No. In all strategies, losses are limited to what you invested. YT can approach zero in value, but cannot go below zero.

What if I just want to hold USP and not deal with any of this? That's a completely valid strategy. USP holders continue to earn variable yield through normal appreciation. Pendle is an additional layer — not a requirement.

Read the full Pendle x USP guide →

Open USP on Pendle →

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Protocol Expansion: Morpho is Coming

USP as Collateral. DeFi Lending. The Next Layer.

Proposal 18 is live on Snapshot. If passed — and it is currently winning with 499,553 VP — USP enters Morpho's lending infrastructure as a collateral asset for the first time.

What is Morpho?

Morpho is one of DeFi's leading lending protocol infrastructure layers. It enables the creation of isolated lending markets where specific assets can be used as collateral to borrow other assets. Unlike Aave or Compound where all assets share a common pool and risk parameter, Morpho markets are isolated — each market has its own risk parameters, collateral assets, and liquidity.

The market in Proposal 18 is the Alpha USDC Forex V2 USP/USDC market — a market specifically designed for USP as collateral to borrow USDC. The vault is operated by Alpha, a specialized vault curator on Morpho.

View the Morpho Vault →

What Can You Do in This Market?

If you hold USP: You can deposit USP as collateral and borrow USDC against it. This lets you access liquidity without selling your USP position — your USP keeps appreciating while you deploy the borrowed USDC elsewhere. The DAO is incentivizing this side with 7.5% of daily PIKU distribution (5,133 PIKU/day) for borrowers.

If you hold USDC: You can supply USDC to the Morpho vault as a lender. Borrowers pay you interest to use your USDC. The DAO is incentivizing the supply side with 2.5% of daily PIKU distribution (1,711 PIKU/day) for suppliers — on top of the interest rate from borrowers.

Why This Matters

This is a qualitative upgrade to what USP is. Before Morpho, USP had one use: hold and earn yield. With Pendle, you could split, trade, or LP the yield. With Morpho, USP becomes collateral — a capital efficiency tool, not just a yield vehicle.

Holding USP + borrowing USDC against it means you can:

• Maintain your full USP yield exposure
• Access liquidity for other opportunities without liquidating
• Continue earning PIKU Merkl rewards while your collateral is posted
• Potentially loop: borrow USDC, buy more USP, deposit as more collateral, borrow again

This is how DeFi-native assets build deep market integration. Not by being listed somewhere — by becoming useful collateral in productive lending markets.

The Governance Context

Proposal 18 reallocates 10% from the USP Holding incentive budget. USP holders will see their Merkl allocation drop from 80% to 70% of daily PIKU distribution. The absolute PIKU per day for USP holding remains significant — and the trade-off is expanding USP's utility into lending markets, which drives TVL growth and protocol-level demand for the token.

The DAO is voting to invest in USP's DeFi footprint. That's the rational allocation.

Vote on Proposal 18 on Snapshot →

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Community Spotlight: @lucky_of_web3

The Simplest Comparison. The Most Important One.

Some analysis takes 10 paragraphs. Sometimes one post says it all. This week, @lucky_of_web3 did the math that matters — and kept it short enough that anyone reading their timeline would stop scrolling.

The Post

"Mr A yield protocol: Deposit $1,000,000 with 12% APY to earn $10,000 monthly.

Piku Protocol ($USP) Deposit $1,000,000 with an 18% APY to earn $18,000 monthly.

Choose @piku_dao 🫵"

Why We're Highlighting This

The most effective community content doesn't explain everything — it explains the one thing a new reader needs to understand. @lucky_of_web3 nailed the format:

• Real numbers, not percentages. Most people don't feel 12% vs 18%. They feel $10,000/month vs $18,000/month. Converting APY to monthly dollar output on the same capital makes the difference tangible.
• Side-by-side, not a lecture. No jargon. No multi-paragraph explanation. One comparison. One conclusion. One CTA.
• Credibility through simplicity. The post doesn't overpromise or use hype language. It lets the numbers do the work — which is exactly how Piku thinks about its own communication.

This is the kind of content that converts. A USP holder sees this and shares it. A newcomer sees this and goes to look up what Piku is. That's community-driven growth that no marketing budget replicates.

PIKUP Content Creator of the Week

Congratulations to @lucky_of_web3 — this week's featured creator earns 10,000 Voting Power (VP). DM @piku_dao to claim.

This happens every week. Create content that educates, analyzes, or explains Piku — and you earn governance influence. Not tokens. Not points. Real voting power in the DAO that governs the protocol.

Read the full post on X →

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Want to be featured in PIKUP? Tag us @piku_dao with your Piku content — threads, analysis, memes, whatever you've got. The best one each week earns 10,000 Voting Power.

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Active Campaigns & Rewards

Five Merkl campaigns. Galxe Season 2 live. The most reward surface area in PikuDAO history.

Merkl Rewards (Pre-TGE)

Current opportunities (as of Feb 24, 2026):

Uniswap LP APR at 148.68% — up from 115.68% last week. TVL dropped from $345K to $268.86K, mechanically pushing APR higher as the same reward pool distributes across less capital.

The full stack:

• Hold USP: native yield (11.03% 7-day APY) + Merkl PIKU rewards (48.38% APR)
• Hold sPIKU: staking rewards + Merkl PIKU rewards (9.32% APR) + governance influence
• LP on Uniswap: 148.68% APR in PIKU + swap fees
• LP on Pendle: 63.28% APR in PIKU + USP yield + swap fees
• Hold YT-USP: leveraged yield exposure + 3,569.33% APR in PIKU (early mover, small TVL)

Current campaigns end February 26. When one ends, the next begins. Recurring. Consistent.

APRs are dynamic and subject to change. PIKU rewards are Pre-TGE tokens. Campaigns are recurring — when one ends, the next begins.

Galxe Season 2: Live

PikuDAO Season 2: Yield Has Layers launched February 19. Quests are live now.

Season 2 includes social quests (LinkedIn, YouTube, TikTok), tiered USP minting (100 USP and 800 USP), and on-chain Pendle interactions — SY, PT, and YT. The first Galxe campaign in PikuDAO history to include DeFi-native quests beyond simple holding.

Rewards: $10,000 worth of PIKU (approved via Proposal 17).

Start Season 2 on Galxe →

View All Piku Opportunities on Merkl →

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What's Next

• Feb 26: Proposal 18 voting ends — Morpho integration decision
• Feb 26: Current Merkl campaigns end — new cycle incoming
• March 17-18: FOMC Meeting — stagflation data will dominate the conversation
• Coming Soon: Morpho market goes live (pending Proposal 18)
• Coming Soon: Ambassador Program Phase 1 cohort announcement
• Ongoing: Galxe Season 2 quests — social, minting, and Pendle actions

Stay tuned on X for real-time updates.

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Why Piku? Because Composability Is Earned.

Every DeFi protocol talks about composability. It's in every pitch deck, every Medium post, every token launch narrative. "We're composable." Cool. So is a LEGO block. The question isn't whether you're composable — it's whether anyone actually composes with you.

Pendle didn't integrate USP because of a marketing arrangement. Morpho didn't become a candidate for USP's first lending market because of a partnership announcement. These integrations happened because USP generates real, verifiable yield — and that yield is interesting enough to build financial products on top of.

Two weeks ago, USP was a hold-and-earn stablecoin.

Today: USP has a yield curve on Pendle. Fixed-income instruments. Leveraged yield products. LP pools with structurally minimized impermanent loss. And pending governance approval — a live lending market on Morpho where USP becomes collateral for the first time in the protocol's history.

The surface area of what you can do with USP expanded more in the last two weeks than in the previous three months. Five Merkl campaigns running simultaneously. A Galxe Season 2 campaign with DeFi-native quests. A lending integration in governance vote. Eight consecutive weeks of positive returns across nine strategies.

All of this. During Fear & Greed at 8. During Bitcoin down 50% from peak. During stagflation signals in the US macro data.

Most protocols wait for bull markets to launch integrations. Piku shipped Pendle during capitulation. Proposed Morpho during capitulation. Not because the timing was strategic — because the product was ready and the DAO voted to go.

$7.56M TVL. $1.074035 USP. 11.03% 7-day APY. 11.74% 30-day APY. Nine strategies. Nine positive returns. $13,312 in weekly profit. Eight consecutive weeks. Pendle live. Morpho incoming. Season 2 live. Five campaigns live. Fear & Greed at 8.

The market gave Piku nothing again. Piku built anyway.

That's the composability that matters.

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Stay Connected and Hedge against the machine!!

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Disclaimer: This newsletter is for informational purposes only and does not constitute financial advice. USP involves risks; please read our documentation and risk disclosures before participating.

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