A Comprehensive Guide to Stablecoin Yields: In-Depth Analysis of 8 Major Types and Comparison of Their Strategies and Advantages.

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Stablecoin Yield Guide: Analysis of 8 Types of Advantages and Disadvantages

Recently, the cryptocurrency market has been performing moderately, and conservative and stable returns have once again become a demand in the market. This article will explore the classic and evergreen topic of stablecoin returns based on years of investment experience and research in the stablecoin field.

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

The main categories of stablecoins in the current cryptocurrency market include:

  • USDT: Widely used in various applications, with the highest market share.
  • Compliant fiat-backed stablecoin: represented by USDC
  • Over-collateralized stablecoins: primarily DAI and LUSD
  • Synthetic Asset Stablecoin: represented by USDe
  • US Treasury RWA project stablecoins: represented by USD0 and USDY
  • Algorithmic stablecoin: UST has been largely abandoned by the market after its collapse.
  • Non-US dollar stablecoins: limited impact

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

The main modes of obtaining stablecoin yields are as follows:

1. Stablecoin Lending

Lending is the most traditional financial income model, with earnings coming from the interest paid by borrowers. Considerations include platform security, default risk, and income stability. Mainly includes:

  • Centralized Exchange Savings
  • Leading DeFi protocols such as Aave and MakerDAO
  • Fixed-rate lending protocols such as Pendle
  • Protocols that introduce innovative mechanisms such as interest rate layering and leveraged lending.
  • Lending Agreement for Institutional Clients

Lending is the largest and primary source of stablecoin returns.

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

2. Liquidity Mining

Taking Curve as an example, the returns come from transaction fees and token incentives. As a benchmark for stablecoin DEXs, Curve has high security but lower returns (0-2%). Other DEX stablecoin pools face issues of low returns or high risks, which do not align well with the prudent principles of stablecoin financial management.

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

3. Market Neutral Arbitrage

Mainly includes:

  • Funding Rate Arbitrage: Utilizing the price difference between perpetual contracts and spot.
  • Basis arbitrage: Utilizing the basis between futures and spot.
  • Cross-exchange arbitrage: Utilizing price differences between different platforms.

Ethena has moved the funding rate arbitrage model on-chain, allowing ordinary users to participate as well. Other platforms like Pionex also offer term arbitrage products. However, overall, there are still relatively few market-neutral arbitrage products aimed at retail investors.

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

4. US Treasury RWA Project

Using RWA products developed with high yields of US treasury bonds over 4%, such as Ondo's USDY and Usual's USD0. Usual has also innovatively provided a liquidity solution for locked US treasury bonds, USD0++. These types of products have high compliance requirements and operational difficulties, but offer good stability in returns.

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

5. Structured Products of Options

The main strategy is to sell put options ( Sell Put ) to earn option premiums. This is suitable for sideways markets, but careful target price setting is required. Some exchanges also offer capital protection Shark Fin strategies, suitable for more conservative investors. The maturity of on-chain options products still needs to be improved.

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

6. Tokenization of Earnings

The Pendle protocol splits yield-bearing assets into principal tokens PT and yield tokens YT, allowing users to flexibly engage in fixed income, yield speculation, or risk hedging operations. Its stablecoin pool offers relatively high yields, but requires frequent operations to switch pools.

Stablecoin Profit Guide: Which of the 8 Types is the Best?

7. A Basket of Stablecoin Yield Products

The Market-Neutral USD pool offered by Ether.Fi combines various strategies such as lending, liquidity mining, funding rate arbitrage, and yield tokenization. It is suitable for users who seek stable on-chain returns but have insufficient funds or are unwilling to operate frequently.

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

8. Stablecoin Staking

If the AO network accepts DAI staking to earn token rewards. This model allows for additional earnings while ensuring the security of stablecoins, but it comes with the risk of uncertainty regarding the project's development.

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

Understanding and reasonably configuring various stablecoin yield models helps to cope more calmly with the risks and opportunities in the crypto market while ensuring financial stability.

Stablecoin收益指南:8种类型哪种最佳?

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

Stablecoin收益指南:8种类型哪种最佳?

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

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degenwhisperervip
· 10h ago
I'm still waiting for high returns.
View OriginalReply0
SatoshiHeirvip
· 10h ago
It should be pointed out that the biggest error in this article is the failure to reference the Fisher-Black model from 2017.
View OriginalReply0
GameFiCriticvip
· 10h ago
Return Rate x Risk Ratio = Breach Defense Index
View OriginalReply0
ForkMastervip
· 10h ago
It's an old trap, it was profitable two years ago, now it's just a scam.
View OriginalReply0
gas_fee_therapyvip
· 10h ago
The borrowing Intrerest Rate is not great, eh, Mizi.
View OriginalReply0
PerpetualLongervip
· 10h ago
What is the use of stablecoin Arbitrage? Increasing the position is the true principle!
View OriginalReply0
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