What Are Yield-Bearing Stablecoins?
Yield-bearing stablecoins automatically generate returns for holders unlike traditional USDC or USDT. Yields range from 3.5% to 15% APY from US Treasuries, DeFi lending, or staking mechanisms.
Treasury-backed stables include USDM (~5% APY) and USDY (~5.2% APY). DeFi-native stables include sDAI (~5-8% APY) and sUSDe (~10-25% APY from delta-neutral strategies).
Conservative portfolios allocate 60% treasury-backed, 30% sDAI for 4.5-5.5% APY. Balanced approaches use 40% treasury-backed, 40% sDAI, 20% sUSDe for 6-10% APY.
Use yield-bearing stables as collateral to earn while borrowing. Treasury-backed stables carry counterparty risk. DeFi-native stables carry smart contract and mechanism risk.
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