Original author: @arndxt_xo, crypro researcher
Original translation: zhouzhou, BlockBeats
Editors Note: This article discusses the strategies and benefits of several interest-bearing stablecoins, including how different platforms generate income through investing in U.S. Treasuries, DeFi lending, and real assets. The strategies and yields of each stablecoin are different, such as earning income through staking, lending, or liquidity mining. The article also mentions the characteristics of these stablecoins, such as no lock-up, automatic accumulation of income, etc., which are suitable for long-term investment and users who require stability, and provide an innovative decentralized financial solution.
The following is the original content (for easier reading and understanding, the original content has been reorganized):
What is an interest-bearing stablecoin? It is a stablecoin that remains pegged to $1 while also generating passive income. How is it achieved? Through lending, staking, or investing in real-world assets like U.S. Treasuries. Think of it like a money market fund on-chain, but programmable and borderless.
In a stablecoin market of over $225 billion, with annual trading volume in the trillions, interest-bearing stablecoins are emerging as:
• On-chain savings accounts
• Income products backed by RWA
• Banking and FinTech alternatives
• Annual returns of approximately 3 – 15% can be achieved while keeping assets in USD
Next, let’s break down how mainstream protocols achieve these benefits.
sDAI – provided by MakerDAO via @sparkdotfi
→ Annual yield: about 5-8% (floating)
→ Strategy: DSR (Dai Savings Rate) income from multiple sources
• Deposit DAI into Spark
• Sources of income include:
• Loan stabilization fee
• Liquidation proceeds
• DeFi lending (e.g. Aave)
• Tokenized assets of US Treasuries
You will receive sDAI, a token based on the ERC-4626 standard, which will automatically increase in value (without rebasing) and the yield will be adjusted by the governance mechanism based on market conditions.
sUSDe – Synthetic yield provided by @Ethena_Labs
→ Annual yield: about 8-15% (up to 29% in a bull market)
→ Strategy: delta-neutral returns from Ethereum
• Deposit ETH → Stake via Lido
• Also short ETH on CEXs
• Financing rate + staking reward = income
sUSDe holders will receive compound interest. High yield = high risk, but completely independent of banks.
sUSDS – provided by @SkyEcosystem (former MakerDAO team)
→ Annual rate of return: about 4.5%
→ Strategy: Hybrid RWA + DeFi Lending
• The underlying income comes from tokenized US Treasuries
• Additional revenue from Spark lending
• Revenue is distributed through Sky Savings Rate (SSR)
No staking required, no lock-up, automatic accumulation of balances, and the governance mechanism sets the target annual rate of return for SSR.
USDY – provided by @OndoFinance
→ Annual yield: about 4-5%
→ Strategy: Tokenizing traditional finance for non-US holders
• 1:1 backing for short-term US Treasuries + bank deposits
• Earn income like a money market fund
• Due to Reg S, proceeds are distributed to non-US users
It will most likely accrue automatically, making passive income even more seamless.
USDM – provided by @MountainPrtcl
→ Annual yield: about 4-5%
→ Strategy: 100% backed by US Treasury Bills (T-Bills)
• All reserves are held in short-term US Treasury bonds
• Daily rebasing to increase balance (e.g. 0.0137% daily)
• Non-US holders only
Simple, stable, and fully transparent through audits.
USDtb – provided by @Ethena_Labs and @BlackRock
→ Annual rate of return: about 3-5%
→ Strategy: Institutional-grade tokenized funds
• BUIDL is a tokenized fund consisting of US Treasuries, cash, and repurchase agreements (repos)
• USDtb uses BUIDL to back 90% of its reserves
• The security of traditional finance combined with 24/7 DeFi availability
Ideal for DAOs and protocols seeking security and yield.
USD 0 – Provided by @UsualMoney
→ Annual yield: about 5-7%
→ Strategy: RWA + DeFi + Staking Rewards
• Base return: 3 – 5% from US Treasuries
• Additional income: 1 – 3% from DeFi lending and liquidity mining
• Stake USD 0++ → Get USUAL tokens (up to 60% APY)
Highly composable, deployed on 27 chains and 30+ decentralized applications.
YLDS – provided by @FigureMarkets
→ Annual yield: about 3.8%
→ Strategy: SOFR-linked, SEC-compliant returns
• SOFR anchored - 0.5%
• Reserve funds are held in high-quality money market funds (MMFs) and US Treasuries
• Daily accumulation, monthly payment of income
• Registered public securities – available for purchase by U.S. investors
Stable and regulated, it is very suitable for compliant on-chain investments.
USP – provided by @Pi_Protocol_ (expected to be released in the second half of 2025)
→ Annual rate of return: about 4-5% (estimated value)
→ Strategy: Tokenized US Treasuries, Money Market Funds (MMFs), Insurance
• Overcollateralized RWA support
• Dual Token Model:
• USP (stablecoin)
• USI (income)
• USPi NFTs offer revenue sharing + governance rights
Aims to align users with the long-term growth of the platform.
OUSD – Powered by @OriginProtocol
→ Annual yield: about 4-7%
→ Strategy: DeFi native, automatic rebasing of returns
• Lend USDT, USDC, DAI to Aave, Compound, Morpho
• Provide liquidity on Curve + Convex
• Daily rebase to increase wallet balance
No staking required, no lock-up.
