As the crypto market enters a period of consolidation or even decline, the "high-risk, high-return" investment strategy is gradually losing popularity, and is being replaced by a "stablecoin income strategy" that emphasizes the stable appreciation of assets. From the most traditional lending and financial management to innovative income tokenization, this article summarizes the current mainstream platforms and models of stablecoin income to help investors find the right place for funds during the market crash.
(This article is excerpted from the " Stablecoin Profit Guide " by former OKX Ventures member @Jacob Zhao )
Table of Contents
ToggleOverview of Stablecoin Types
The stablecoins currently on the market can be roughly divided into the following categories:
Fiat-based USD stablecoins : such as USDT (Tether) and USDC (Circle), are the stablecoins with the highest market value and the strongest liquidity.
Overcollateralized stablecoins : such as DAI (MakerDAO) and LUSD (Liquity), which have decentralization and risk control mechanisms.
Synthetic asset stablecoins : such as Ethena's USDe, which maintains stability through on-chain fee arbitrage.
RWA supports stablecoins : such as USDY (Ondo) and USD0++ (Usual), which tokenizes real-world assets (RWA), mainly U.S. Treasury bonds.
Algorithmic stablecoins : UST (Terra) has declined, and only a few such as FRAX continue to operate in combination with over-collateralization.
Non-USD stablecoins based on fiat currencies : such as EURC, BRZ, HKDR, etc., are more regulatory-oriented and have limited application in the crypto community.
Main stablecoin revenue models
Stablecoin Lending & Borrowing
The most traditional revenue model, profits come from the interest paid by borrowers:
CeFi platform : Many exchanges (CEX) provide USDT/C current account management, and the APY fluctuates between 2% and 20% depending on the market.
DeFi protocols : such as Aave, Sky (formerly MakerDAO), and Morpho Blue , provide decentralized lending.
Fixed rate agreements : such as Pendle, which provides a fixed compensation mechanism.
Micro-innovation types : Maple Finance (institutional lending), Huma Finance (supply chain finance), and introduction of interest rate stratification (Rate Tranching) design.
It is important to note that the security of the platform or protocol, the possibility of borrower default, and the stability of returns need to be considered.
Yield Farming
By providing stablecoins to DEX liquidity pools, liquidity providers (LPs) can obtain:
AMM transaction fee sharing (such as Curve's 3Pool)
Platform token incentives (such as CRV or UNI)
If the pool is large, the security is high but the return is low (mostly ≤ 2%), while if the pool is small, the security is low but the return is high. However, both of them have to bear Impermanent Loss and high gas costs.
Market-Neutral Strategies
Strategies that professional trading institutions have long used, with low risk but high technical barriers, and individual retail investors are usually difficult to participate in:
Funding Rate Arbitrage : Utilize the price difference between perpetual contracts and spot contracts to make stable profits without being exposed to currency price fluctuations.
Cash-and-Carry Arbitrage: Holding spot and hedging futures at the same time to lock in the basis.
Cross-exchange arbitrage : arbitrage using currency price differences requires the support of high-frequency trading robots.
Among them, Ethena integrates these operations into the protocol, and introduces the external settlement (OES, Off Exchange Settlement) model and transparent reserve audit to reduce the cost of trust.
RWA US Treasury Yield
Investing in short-term U.S. Treasury bonds through the RWA project provides low-risk and stable returns in U.S. dollars:
Ondo’s USDY : Targeted at non-US retail investors, supports multi-chain applications, and has a yield of approximately 4.25%.
Usual’s USD0++ : Create another layer on top of USD0 that can participate in liquidity mining or be used as collateral for lending, providing liquidity for US Treasuries.
However, the returns that are higher than U.S. Treasuries often come from platform subsidies or governance token incentives, and their long-term sustainability remains questionable.
Structured Products
Commonly seen in CEX "dual currency investment", for example:
Sell Put / Sell Call : Buy or sell options and collect premiums, suitable for volatile markets.
SharkFin structured products : protect the principal and earn interest rate spreads within a specific range, with controlled risks and fixed returns.
Yield Tokenization
Taking Pendle as an example, the income assets are divided into:
PT (Principal Token) : redeemable for underlying assets, with stable principal.
YT (Yield Token) : represents future earnings, with high volatility but high potential returns.
Users can choose to stabilize (hold PT), speculate (buy YT), hedge (sell YT) or provide liquidity (LP) to participate in a multi-layered income structure.
Stablecoin collective strategy products (similar to funds)
For example , the Market-Neutral USD pool launched by Ether.Fi , a re-staking project, combines multiple revenue models:
Lending (Aave, Morpho)
Mining (Curve)
Funding Rate Arbitrage (Ethena)
Revenue Tokenization (Pendle)
This product is actively managed by the protocol to diversify risks and improve stable returns, making it suitable for small long-term holders.
Overview of current on-chain and off-chain stablecoin revenue opportunities
Strategy diversification is the best solution at present
The author believes that " strategy diversification and capital allocation based on risk levels " is the most stable way to generate returns in the current crypto market. As the market is no longer simply a bull or bear market and the boundaries become increasingly blurred , the ability of an investment portfolio to resist volatility becomes increasingly important. For example:
50% : Invest in Ondo’s USDY, RWAs such as Aave or Sky, or large lending protocols, and earn a stable interest rate of 4% to 6%.
30% : Invest in Pendle PT or Ethena USDe to capture on-chain profit opportunities and obtain 5% to 20% APY.
20% : Try high-risk strategies, such as Pendle YT and LP betting on high-yield pools, or participating in SharkFin structured products.
In this way, while obtaining on-chain income, it is also possible to disperse the risk of potential losses, making stablecoin financial management a true "passive cash flow in a bear market" strategy. However, actual allocations still vary depending on individual risk tolerance.
Stablecoin benefits, from capital parking to financial strategy
At present, stablecoins are no longer just a place for assets to be "temporarily moored", but a cash flow tool that can be managed independently and flexibly combined in the DeFi world. When the market is in a volatile consolidation phase, it is more appropriate to seek steady progress and dynamically adjust profit strategies rather than taking a gamble.
Therefore, the combination of strategy diversification and risk awareness may be the best solution for crypto investors in 2025.
Risk Warning
Cryptocurrency investments carry a high degree of risk, their prices may fluctuate dramatically, and you may lose all your investment. Please assess the risks carefully.
