The digital asset landscape has seen a significant shift in recent years, with yield-generating stablecoin pools taking center stage. These pools have become a go-to for savvy investors seeking to grow their cryptocurrency holdings and generate passive income through prolonged holding periods. This comes after the collapse of Terra’s ecosystem and Anchor, paving the way for a new breed of yield-bearing stablecoins that combine the stability of traditional fiat currencies with the potential for passive income.
These stablecoins, when deposited into liquidity pools, often generate returns based on the operations of the pool. The capital is typically directed into these pools or similar structured frameworks that work as the engine for generating returns via strategic protocols. These protocols can include staking digital assets like Ethereum, decentralized lending, or deploying capital across a range of financial vehicles.
As of March 6, 2025, according to data from defillama.com, the top five pools held a total of $8.699 billion. Leading the pack is Sky’s USDS with a total value locked (TVL) of $3.254 billion and an annual percentage yield (APY) of 6.50%. Ethena’s SUSDE pool is hot on its heels, with an impressive APY of 10.73% and a locked capital of $2.996 billion. The Tether (USDT) pool on Aave Version 3 stands at a TVL of $1.317 billion, offering a 3.48% APY to users.
Other players include the USDC pool on Aave V3, yielding 3.25% APY with a TVL of $1.211 billion, and the DAI pool, under Sky’s infrastructure, delivering a 4.75% APY with a TVL of $1.132 billion. Notable additions to this list include Usual’s USD0++ at 11.56% APY, the SPDAI pool on Morpho Blue at 8.58% APY, and USDS via Spark at 7.17% APY.
Investors are drawn to these pools for various reasons, including consistent yield generation, liquidity for seamless redemptions, and accessible entry points for those who are more risk-averse. They also facilitate portfolio diversification and allow investors to engage with decentralized protocols without the need for constant oversight.
However, like any investment, yield-bearing stablecoin pools come with their own set of risks. Investors need to be aware of potential threats such as smart contract vulnerabilities, temporary valuation discrepancies, asset misappropriation, and stablecoin depegging events. Furthermore, the regulatory landscape for decentralized finance (DeFi) remains ambiguous and fraught with the risk of fraudulent schemes, which can exacerbate exposure to financial instability. As such, diligent research and a carefully planned strategy are crucial to navigating this rapidly evolving ecosystem.
