APY up to 9%, a review of 20 types of yield-bearing stablecoins

Author: Mars_DeFi, Crypto KOL

Compiled by: Felix, PANews

If users want to pursue maximum profit, they can maximize the value of stablecoins through yield-generating stablecoins.

Yield-bearing stablecoins refer to assets that generate returns through DeFi activities, derivatives strategies, or RWA investments. Currently, this type of stablecoin accounts for 6% of the $240 billion market cap of stablecoins. With growing demand, JPMorgan believes that reaching a 50% share is not out of reach.

A yield stablecoin is minted by depositing collateral into a protocol. The deposited funds are used for investment in yield strategies, and the returns are shared with the holders. It's like a traditional bank lending out the deposited funds and sharing the interest with depositors, except that the interest on yield stablecoins is higher.

This article aims to review 20 types of stablecoins that can generate returns.

1.Ethena Labs (USDe / sUSDe)

Ethena maintains the value of its stablecoin and generates profits through delta-neutral hedging.

The minting method of USDe is to deposit the staked ETH (stETH) into the Ethena protocol. After that, the ETH position is hedged through shorting.

In addition to the yield from stETH (currently an annual interest rate of 2.76%), the positive funding rate from short positions will also generate returns. Ethena will distribute these returns to users who stake USDe to obtain sUSDe (annual interest rate of 5%).

2.Spark (sDAI)

sDAI is generated by depositing DAI into Maker's DAI Savings Rate (DSR) contract. The current annual yield is 3.25%.

The earnings are accumulated through the interest of DSR (the interest rate is determined by MakerDAO). sDAI can also be traded or used in DeFi like other stablecoins.

3.Ondo Finance (USDY)

Ondo issues USDY by depositing USDC. The deposited assets are used to purchase low-risk assets such as treasury bonds (approximately 4 - 5% annual interest rate), and most of the interest is shared among USDY holders.

The yield of USDY is set once a month and remains stable throughout the month. This month's annualized yield is 4.25%.

Note: The yield of USDY is reflected in the token price, not the quantity. This is why USDY is always above 1 dollar.

4.BlackRock (BUIDL)

The BUIDL stablecoin represents ownership of the tokenized money market fund managed by BlackRock (MMF).

The fund invests in cash and other instruments, such as short-term treasury bills and repurchase agreements, and allocates interest to BUIDL holders.

The fund's yield is calculated daily but distributed monthly to BUIDL holders.

5.Figure Markets (YLDS)

YLDS is the first yield-bearing stablecoin registered as a public security with the SEC in the United States.

Figure Markets generates returns by investing in the same securities held by high-quality money market funds (MMF), which have a higher risk than tokenized government-backed money market funds (MMF).

YLDS offers an annual interest rate of 3.79%. Interest is accumulated daily and paid monthly in USD or YLDS tokens.

6.Sky (USDS / sUSDS)

USDS is a renamed version of DAI, which can be minted by depositing eligible assets through the Sky Protocol.

It can be used for DeFi and can also earn yields from the Sky Protocol through the Sky savings rate (SSR) contract. sUSDS is issued based on USDS deposits with an annual interest rate of 4.5%.

7.Usual (USD0)

USD0 is fully backed by real-world assets (RWAs) such as treasury bonds and is minted by depositing USDC or eligible RWAs as collateral on the Usual platform.

Users can also stake USD0 on Curve to earn USD0++ (annual interest rate 0.08%). USD0++ can be used in DeFi, with returns distributed in the form of USUAL tokens (annual interest rate 13%).

Note: To achieve USD0++ returns, a staking period of 4 years is required.

8.Mountain Protocol (USDM)

Mountain Protocol generates returns by investing in short-term U.S. Treasury bonds, but USDM is specifically targeted at non-U.S. users.

The yields from these US Treasury bonds are allocated to USDM holders through a daily adjustment system, so the balance will automatically reflect the accrued earnings.

USDM currently offers an annualized yield of 3.8%.

9.Origin Protocol (OUSD)

OUSD is minted by depositing stablecoins like USDC, USDT, and DAI on the Origin Protocol.

Origin deploys collateral into low-risk DeFi strategies, generating returns through lending, liquidity provision, and trading fees. These returns are automatically adjusted and allocated to OUSD holders.

OUSD is backed by stablecoin with an annual interest rate of 3.67%.

10.Prisma Finance (mkUSD)

mkUSD is supported by liquid staking derivatives. The yield is generated through rewards from the underlying staked assets (2.5% - 7% variable annual interest rate) and distributed among mkUSD holders.

mkUSD can be used for liquidity mining on platforms like Curve, and can also be staked in Prisma's stable pool to earn PRISMA and ETH rewards from liquidation.

11.Noble (USDN)

USDN is backed by short-term government bonds. The income comes from the interest of short-term government securities and is distributed to USDN holders (annual interest rate of 4.2%).

Users can earn basic returns by depositing USDN into the flexible Vault (flexible Vault), or by depositing it into the USDN locked Vault (with a maximum lock-up period of 4 months) to earn Noble points.

12.Frax Finance (sfrxUSD)

frxUSD is backed by assets from BUIDL, a subsidiary of BlackRock, and generates returns by utilizing its underlying assets (such as Treasury bills) and participating in DeFi.

The yield strategy is managed by the Benchmark Yield Strategy (BYS), which dynamically allocates staked frxUSD to the highest yielding sources, allowing sfrxUSD holders to achieve maximum returns.

13.Level (lvlUSD)

lvlUSD is minted by depositing and staking USDC or USDT. These collateral assets are deployed in blue-chip lending protocols such as Aave and Morpho.

Users can stake IvIUSD to obtain sIvIUSD, thereby enjoying the returns brought by DeFi strategies.

The annual interest rate is 9.28%.

! APY up to 9%, inventory of 20 yielding stablecoins

14.Davos (DUSD)

DUSD is a cross-chain stablecoin that can be minted using sDAI and other liquidity collateral. It generates yields through the re-staking of derivatives and distributes the returns from the underlying assets to DUSD holders.

DUSD can be deposited into liquidity pools or appreciation vaults, and can also be staked on Davos to earn an annual interest rate of 7-9% and lending interest income.

15.Reserve (USD3)

The minting method for USD3 is: deposit PYUSD on Aave v3, deposit DAI on Spark Finance, or deposit USDC on Compound v3.

The income generated from allocating collateral to leading DeFi lending platforms will be distributed to USD3 holders (annual interest rate of approximately 5%).

Reserve Protocol provides over-collateralization for USD3 to prevent decoupling.

16.Angle (USDA / stUSD)

USDA is minted by depositing USDC. The yield from USDA is generated through DeFi lending, treasury bonds, and tokenized securities trading.

USDA can be deposited into Angle's savings solution to obtain stUSD. stUSD holders can earn yields generated by USDA (annual interest rate of 6.38%).

17.Paxos (USDL)

USDL is the first stablecoin that offers daily yields within a regulatory framework. Its yields come from short-term U.S. securities held in the Paxos reserves, with an approximate yield of 5%. USDL holders can automatically receive USDL's yields.

18.YieldFi (yUSD)

yUSD is backed by stablecoins and can be minted by depositing USDC or USDT on YieldFi (annual interest rate 11.34%).

YieldFi generates returns by deploying collateral through a delta-neutral strategy, while yUSD can be used in DeFi strategies such as lending and providing liquidity on protocols like Origin Protocol.

19.OpenEden (USDO)

USDO is backed by tokenized U.S. Treasury bonds and money market funds (such as OpenEden's TBILL).

The underlying assets are invested through on-chain and off-chain strategies to generate returns. The returns are distributed to USDO holders through a daily rebase mechanism.

The underlying assets generate returns through on-chain and off-chain strategies. These returns are distributed daily to USDO holders.

20.Elixir (deUSD / sdeUSD)

Similar to Ethena's USDe, the yield of deUSD comes from its investments in traditional assets such as U.S. Treasury bonds and the funding rates generated from lending within the Elixir protocol.

Users who stake deUSD for sdeUSD can earn an annual yield of 4.39% and double potion rewards.

Related Reading: Stablecoin Yield Guide: Which of the 8 Types is the Best?