Overview of Yield Stablecoin Sector: Which Projects Are Helping Your Money Grow?

Question

Original Title: Stablecoin Update May 2025

Original source: Artemis

Reposted: Oliver, Mars Finance

In the crypto market, stablecoins are no longer just "stable" – they are quietly helping you make money. From U.S. Treasury yields to perpetual contract arbitrage, yield-bearing stablecoins are becoming the new income engine for crypto investors. At present, there are dozens of related projects with a market value of more than $20 million, with a total value of more than $10 billion. In this article, we will break down the revenue sources of mainstream interest-earning stablecoins, and take stock of the most representative projects in the market to see who is really "making money" for you.

What is a yield-bearing stablecoin?

Unlike regular stablecoins, such as USDT or USDC, which only serve as a store of value, interest-bearing stablecoins allow users to earn passive income during their holdings. Their core value is to bring additional income to coin holders through the underlying strategy while keeping the stablecoin price anchored.

How is profit generated?

The sources of income for yield stablecoins are diverse and can be mainly categorized into the following types:

· Real World Asset (RWA) Investment: The protocol invests funds in low-risk assets in the real world, such as U.S. Treasury bills (T-bills), money market funds, or corporate bonds, and returns the earnings from these investments to the token holders.

· DeFi Strategy: The protocol deposits stablecoins into decentralized finance (DeFi) liquidity pools, engages in liquidity mining (farming), or adopts a "Delta-neutral" strategy to extract profits from market inefficiencies.

· Lending: Deposits are lent to borrowers, and the interest paid by borrowers becomes the earnings of the holders.

· Debt Support: The agreement allows users to lock up crypto assets as collateral to borrow stablecoins. The income mainly comes from stability fees or interest generated from non-stablecoin collateral.

· Mixed sources: Earnings come from a diversified mix of tokenized RWAs, DeFi protocols, centralized finance (CeFi) platforms, etc., to achieve diversified returns.

Overview of the Stablecoin Market Landscape (Projects with a Total Supply of Approximately $20 Million and Above)

The following lists some of the currently mainstream interest-bearing stablecoin projects, categorized based on their primary yield generation strategies. Please note that the data reflects the total supply, and this list primarily covers interest-bearing stablecoins with a total supply of 20 million USD or above.

RWA Support Type (mainly through U.S. Treasury bonds, corporate bonds or commercial paper, etc.)

These types of stablecoins generate returns by investing funds in low-risk, income-generating assets in the real world.

· Ethena Labs (USDtb – 1.3 billion USD ): Supported by BlackRock's BUIDL fund.

· Usual (USD0 – 619 million USD ): Usual protocol's liquidity deposit token, backed 1:1 by ultra-short-term RWA (specifically aggregated US Treasury tokens).

· BUIDL (5.70 billion USD): BlackRock's tokenized fund, holding U.S. Treasuries and cash equivalents.

· Ondo Finance (USDY – 560 million USD ): fully backed by U.S. Treasury bonds.

· OpenEden (USDO – 280 million USD ): The revenue comes from reserves supported by U.S. Treasury bonds and repurchase agreements.

· Anzen (USDz – 122.8 million USD ): Fully backed by a diversified tokenized RWA portfolio, mainly consisting of private credit assets.

· Noble (USDN – $106.9 million ): A composable yield-bearing stablecoin backed by 103% U.S. Treasury bonds, utilizing M0 infrastructure.

· Lift Dollar ( USDL – 94 million USD ): Issued by Paxos, fully backed by US Treasury bonds and cash equivalents, with daily automatic compounding.

· Agora (AUSD – 89 million USD ): Backed by Agora reserves, including cash and cash equivalents such as overnight reverse repos and short-term US Treasury bills.

· Cygnus (cgUSD – 70.9 million USD ): Backed by short-term government bonds, it operates as a rebase type ERC-20 token on the Base chain, automatically adjusting balances daily to reflect earnings.

· Frax (frxUSD – 62.9 million USD ): Upgraded from the stablecoin FRAX of Frax Finance, it is a multi-chain stablecoin supported by BlackRock's BUIDL and Superstate.

Basis Trading/Arbitrage Strategy Type

This type of stablecoin generates profits through market-neutral strategies, such as perpetual contract funding rate arbitrage and cross-exchange arbitrage.

· Ethena Labs (USDe – 6 billion USD ): Supported by a diversified asset pool, maintained its peg through spot collateral delta hedging.

· Stables Labs ( USDX – 671 million USD ): Generating profits through delta-neutral arbitrage strategies among various cryptocurrencies.

· Falcon Stable (USDf – 573 million USD ): Supported by a cryptocurrency portfolio, generating returns through Falcon's market-neutral strategies (funding rate arbitrage, cross-exchange trading, native staking, and liquidity provision).

· Resolv Labs (USR – 216 million USD ): Fully supported by ETH collateral pool, ETH price risk hedged through perpetual futures, assets managed by off-chain custody.

· Elixir (deUSD – 172 million USD ): Use stETH and sDAI as collateral to create delta-neutral positions by shorting ETH and capturing positive funding rates.

· Aster (USDF – 110 million USD ): backed by crypto assets and corresponding short futures on AsterDEX.

· Nultipli.fi (xUSD/xUSDT – 65 million USD ): Earn returns through market-neutral arbitrage on centralized exchange platforms (CEXs), including Contango arbitrage and funding rate arbitrage.

· YieldFi (yUSD – 23 million USD ): backed by USDC and other stablecoins, the yield comes from delta-neutral strategies, lending platforms, and yield trading protocols.

· Hermetica (USDh – 5.5 million USD ): Bitcoin-backed by Delta Hedge, using short perpetual futures on major centralized exchanges to earn funding fees.

Lending/Debt Support Type

These types of stablecoins generate returns by lending out deposits, collecting interest, or through stability fees and liquidation profits from collateralized debt positions (CDPs).

· Sky (DAI – 5.3 billion USD ): Based on CDP (Collateralized Debt Position). Minting by collateralizing ETH (LSTs), BTC LSTs, and sUSDS on @sparkdotfi. USDS is an upgraded version of DAI, used to earn yields through the Sky Savings Rate and SKY rewards.

· Curve Finance (crvUSD – 840 million USD ): Over-collateralized stablecoin, backed by ETH and managed through LLAMMA, its peg is maintained through Curve's liquidity pools and DeFi integrations.

· Syrup (syrupUSDC – 631 million USD ): Supported by fixed-rate collateralized loans provided to crypto institutions, with returns managed by @maplefinance's credit underwriting and lending infrastructure.

· MIM_Spell (MIM – $241 million ): Over-collateralized stablecoin, minted by locking interest-bearing cryptocurrencies into Cauldrons, with earnings derived from interest and liquidation fees.

· Aave (GHO – $251 million ): Minted through the collateral provided in the Aave v3 lending market.

· Inverse (DOLA – 200 million dollars ): A debt-backed stablecoin minted through collateral lending on FiRM, with earnings generated from staking into sDOLA, which earns from lending income.

· Level (lvlUSD – 184 million USD): Supported by USDC or USDT deposited in DeFi lending protocols (such as Aave) to generate yield.

· Beraborrow (NECT – 169 million USD ): Berachain native CDP stablecoin, supported by iBGT. Yields are generated through liquidity stable pools, liquidation gains, and leveraged enhancements from PoL incentives.

· Avalon Labs (USDa – 193 million USD ): A full-chain stablecoin that uses the CeDeFi CDP model to mint assets like BTC, providing fixed-rate lending and generating yields through staking in the Avalon vault.

· Liquity Protocol (BOLD – 95 million USD ): Supported by over-collateralized ETH (LSTs), sustainable yields are generated through borrower interest payments and ETH liquidation profits obtained via its Stability Pools.

· List Dao (lisUSD – 62.9 million USD ): An over-collateralized stablecoin on the BNB Chain, minted through a CDP using BNB, ETH (LSTs), and stablecoins as collateral.

· f(x) Protocol (fxUSD – 65 million USD): Minted through leveraged xPOSITIONs backed by stETH or WBTC, with returns coming from stETH staking, opening fees, and stability pool incentives.

· Bucket Protocol (BUCK – 72 million USD ): Over-collateralized CDP supporting stablecoins based on @SuiNetwork, minted by collateralizing SUI.

· Felix (feUSD – 71 million USD ): Liquity fork CDP on @HyperliquidX. feUSD is an over-collateralized CDP stablecoin that mints using HYPE or UBTC as collateral.

· Superform Labs (superUSDC – 51 million USD ): A USDC-backed vault that automatically rebalances on Ethereum and Base across top lending protocols (Aave, Fluid, Morpho, Euler), powered by Yearn v3.

· Reserve (USD3 – 49 million USD ): backed 1:1 by a basket of blue-chip interest-bearing tokens (pyUSD, sDAI, and cUSDC).

Mixed Yield Source Type (combining DeFi, traditional finance, and centralized finance yields) This type of stablecoin diversifies risks and optimizes yields by combining various strategies.

· Reservoir (rUSD – 230.5 million USD ): Overcollateralized stablecoin supported by a combination of RWA and USD-based capital allocators and lending vaults.

· Coinshift (csUSDL – $126.6 million ): backed by T-Bills and DeFi lending via Morpho, offering regulated low-risk returns through a treasury orchestrated by @SteakhouseFi.

· Midas (mEGDE, mTBILL, mMEV, mBASIS, mRe7YIELD – $110 million ): compliant institutional-grade stablecoin strategy. LYT represents debt rights to actively managed yielding RWA and DeFi strategies.

· Upshift (upUSDC – 32.8 million USD ): Earn interest partially supported by lending strategies, but returns also come from LP (Liquidity Providing) and staking.

· Perena (USD*- 19.9 million USD ): Solana's native yield-bearing stablecoin, is the core of Perena AMM, earning yields through swap fees and liquidity pools driven by IBT.

Summary

The above focuses on interest-bearing stablecoins with a total supply of around or above 20 million USD, but keep in mind that all interest-bearing stablecoins come with risks. Returns are not risk-free; they may face risks such as smart contract risk, protocol risk, market risk, or collateral risk.