Stablecoin Yield Strategy Analysis: Diversification Choices and Risk Considerations

Against the backdrop of the current high level of the US dollar index, holding dollar assets and generating returns has become a viable option to consider. Not only individual investors, but also some leading DeFi projects are actively leveraging idle dollar assets to seek yields. For example, MakerDAO recently passed a proposal to transfer up to $1.6 billion in USDC to a certain custody service to achieve an annual yield of 1.5%.

This article will explore several stablecoin yield strategies, providing investors with diversified options.

USDD+3Crv Strategy

USDD is a stablecoin managed by a certain organization. As of October 27, the issuance of USDD is 725 million, with collateral valued at 2.23 billion USD and a collateralization rate of over 300%. Among this, the collateral volume of USDC alone reaches 990 million, greatly exceeding the issuance of USDD, indicating a lower risk coefficient.

A trading platform has launched multiple trading pairs for USDD and waived the fees for related trading pairs, which is beneficial for the development of USDD.

On a certain DeFi platform, the annualized yield of the USDD+3Crv pool is 19.66%, and the APR of USDD+FRAXBP is 21.18%. The former includes four stablecoins: USDD, DAI, USDT, and USDC, while the latter includes three stablecoins: USDD, FRAX, and USDC.

Operation steps:

1. Select the supported stablecoin for deposit on the USDD+3Crv pool page of the platform.
2. Stake the obtained LP coins on the platform.

It is worth noting that the use of USDD is more widespread in certain ecosystems. For example, the APY for the USDD-USDT trading pair on a certain platform can reach as high as 41.9% (requiring locking and staking of platform tokens), while the deposit APY for USDD on another platform is 9.52%.

Canto: USDT+NOTE Strategy

Canto is an EVM-compatible DeFi public chain, featuring functions such as DEX, lending, and the stablecoin NOTE. Currently, Canto's total locked value (TVL) is approximately 100 million US dollars.

On Canto's lending platform, the APR for NOTE/USDT LP is 32.14%, and the APR for NOTE/USDC LP is 29.47%. NOTE is a stablecoin minted in Canto through over-collateralization, and liquidation does not occur when the collateral is USDC and USDT.

Operation Suggestions:

• Use part of the USDT as collateral to mint the required NOTE
• Provide liquidity with NOTE and the remaining USDT
• Stake the obtained LP coin on the lending platform

It is important to note that Canto's cross-chain operations are relatively complex, requiring multiple steps for entry and exit. Investors should fully understand the related processes.

Velodrome: sUSD+LUSD Strategy

Velodrome is a DEX on a Layer 2 network, with its code derived from a project by a well-known developer on another public chain. Currently, Velodrome's TVL is 82 million USD, surpassing the scale of some well-known DEXs on that Layer 2 network.

sUSD and LUSD are stablecoins from two different projects, both with relatively high security. Currently, the APR for the sUSD/LUSD trading pair liquidity mining in Velodrome is 16.12%.

Helio: HAY+BUSD Strategy

Helio Protocol is a liquidity staking and lending protocol on a certain public chain. Users can over-collateralize to borrow the decentralized stablecoin HAY in Helio, while the staked tokens will be used for liquidity staking.

A well-known DEX has added a dedicated StableSwap exchange entry for HAY and BUSD, indicating that HAY has a certain level of market recognition. Currently, Helio's TVL is $92 million.

Operation steps:

1. Provide liquidity for the HAY/BUSD stablecoin trading pair on the DEX.
2. Stake LP coins into Helio

The Farming page of Helio shows that the APR for HAY/BUSD Stable LP is 19.77%.

Wombat Exchange Ecosystem Strategy

Wombat Exchange is a DEX focused on stablecoin exchanges, featuring low slippage, shared liquidity, and the ability to stake using a single token. Its investors include several well-known institutions and projects.

Currently, the median APRs for USDC, USDT, DAI, and BUSD in Wombat's main pool are 11.44%, 11.14%, 10.85%, and 7.57%, respectively. These returns include the effects of locking and holding platform coins.

Some applications similar to other platforms have also emerged around Wombat, such as Wombex Finance and Magpie, where users can earn higher returns by depositing through these applications.

Risk Warning: The risks in the cryptocurrency market are higher than those in traditional financial markets, and security incidents are frequent. Investors should diversify their risks and thoroughly understand specific risk points before investing, conducting their own research.