Stablecoin Yield Strategy Analysis: Diversified Choices and Potential Risks

In the current market environment where the US dollar index is high and risk assets are declining, holding US dollar assets and generating returns has become an attractive option. Not only ordinary investors but even leading DeFi projects are actively seeking ways to utilize idle US dollar assets to generate returns. This article will explore several stablecoin yield strategies, providing readers with diversified investment references.

Convex: USDD+3Crv Strategy

USDD is a stablecoin managed by the TRON DAO Reserve. As of October 27, the issuance volume of USDD is 725 million, while its collateral value reaches 2.23 billion USD, with a collateralization rate exceeding 300%. Among them, the collateral amount of USDC alone has reached 990 million, significantly exceeding the issuance volume of USDD, which means that the risk coefficient of USDD is relatively low.

Multiple USDD trading pairs have been launched on a certain trading platform, and the transaction fees for these trading pairs have been waived. This initiative is beneficial for enhancing the liquidity and utilization rate of USDD.

The Convex platform shows that the annualized yield of the USDD+3Crv pool is 19.66%, while the APR of the USDD+FRAXBP pool is even higher at 21.18%. Investors can choose to deposit supported stablecoins into Convex's USDD+3Crv pool, and then stake the obtained LP tokens in Convex to earn returns.

It is worth noting that the use of USDD is more widespread in the Tron ecosystem. For example, on a certain platform, the annualized yield for the USDD-USDT trading pair can reach as high as 41.9% (requiring locking and staking of platform tokens). On another lending platform, the annualized yield for USDD deposits is 9.52%.

Canto: USDT+NOTE Strategy

Canto is an EVM-compatible DeFi public chain in the Cosmos ecosystem, featuring its own DEX, lending system, and stablecoin NOTE. Currently, Canto's total locked value (TVL) is approximately 100 million dollars.

Canto's lending platform shows that the annualized yield for NOTE/USDT LP is 32.14%, while the annualized yield for NOTE/USDC LP is 29.47%. NOTE is a stablecoin minted in Canto through over-collateralization, and there will be no liquidation when the collateral is USDC and USDT.

Investors may consider using part of their USDT as collateral to mint the required NOTE, then provide liquidity with the NOTE and the remaining USDT, and finally stake the LP tokens on the lending platform to earn yields.

However, it should be noted that Canto's cross-chain operations are relatively complex. Investors need to cross-chain from Ethereum to Canto and then convert it into Canto's ERC20 token. When exiting, they first need to convert it into Canto's native coin, cross-chain to the Cosmos cross-chain bridge Gravity Bridge, and then use a wallet from the Cosmos ecosystem to cross the assets back to Ethereum from Gravity Bridge.

Velodrome: sUSD+LUSD Strategy

Velodrome is a decentralized exchange on Optimism (DEX), with code derived from Andre Cronje's Solidly developed on Fantom. Currently, Velodrome's TVL is $82 million, and its scale on Optimism has surpassed that of Curve and Uniswap V3.

sUSD and LUSD are stablecoins in Synthetix and Liquity, respectively, both of which are considered relatively safe. Currently, the annualized yield for the sUSD/LUSD trading pair in Velodrome's liquidity mining is 16.12%.

Helio: HAY+BUSD Strategy

Helio Protocol is a liquidity staking and lending protocol on the BNB chain. Users can borrow Helio's decentralized stablecoin HAY by over-collateralizing, while the staked BNB will be used for liquidity staking.

A well-known DEX has specifically added a StableSwap exchange entry for HAY and BUSD on its Swap page, indicating that HAY has a certain level of market recognition. Currently, Helio's TVL is $92 million, with approximately $20 million in staked HAY/BUSD Stable LP.

Investors can provide liquidity for the HAY/BUSD stablecoin trading pair in the DEX and then stake the LP tokens in Helio. Helio's Farming page shows that the annualized yield for HAY/BUSD Stable LP is 19.77%.

Wombat Exchange Ecosystem: Multiple Stablecoin Strategies

Wombat Exchange is a stablecoin exchange DEX on the BNB chain, featuring low slippage, shared liquidity, and the ability to stake with a single token. The transaction fee ratio for stablecoin trading is only 0.01%.

Currently, the Main Pool of Wombat shows that the median annualized yield for USDC, USDT, DAI, and BUSD is 11.44%, 11.14%, 10.85%, and 7.57%, respectively. These figures include the effects of locking WOM and holding veWOM. Without locking WOM, the actual yield would be lower.

Similar applications to Convex have emerged around Wombat, such as Wombex Finance and Magpie, where ordinary users may achieve higher returns by depositing through these applications. Wombex currently has a TVL of $89.49 million, with annualized returns for deposits in USDC, USDT, DAI, and BUSD being 13.93%, 12.71%, 15.29%, and 17.16%, respectively. Magpie's TVL is $25.90 million, with corresponding annualized returns of 11.62%, 11.82%, 14.52%, and 9.65%, respectively.

Risk Warning

It is important to emphasize that the overall risk of the cryptocurrency market is higher than that of traditional financial markets, with frequent security incidents. Investors should act with caution, remember to diversify risks, and fully understand the specific risk points before investing. It is recommended that investors conduct in-depth personal research and not blindly follow the investment strategies of others.