Text/ Hedy Bi, OKG Research
When tariffs became an American drama, "no new plot today" ironically became the news itself. From gold prices repeatedly hitting new highs to Bitcoin returning above $80,000, risk-averse sentiment is quietly resurging. The world increasingly resembles a hastily assembled makeshift team, where each news of inflation expectations being revised upward, geopolitical friction escalating, or trade barriers intensifying could potentially become a fuse igniting market sentiment.
In today's era where macroeconomic uncertainty has become the norm, "certainty" is no longer a given condition but a scarce asset. In an age where black swans and gray rhinos coexist, investors seek not just returns, but assets that can traverse volatility and possess structural support. The "crypto yield-bearing assets" in the on-chain financial system may precisely represent this new form of certainty.
These crypto assets promising fixed or floating financial returns are returning to investors' view, becoming an anchor for seeking stable returns in turbulent market conditions. However, in the crypto world, "interest" is no longer just the time value of capital; it is often a product of protocol design and market expectations. High yields may stem from real asset income or may conceal complex incentive mechanisms or subsidy behaviors. To find true "certainty" in the crypto market, investors need more than just an interest rate table, but a deep deconstruction of underlying mechanisms. As the eighth article in the "Trump Economics" series, this article will start from yield-bearing assets, analyzing the real sources and risk logic of crypto yield-bearing assets, seeking certainty within uncertainty.
Since the Federal Reserve began its rate hike cycle in 2022, the concept of "on-chain interest rates" has gradually entered public consciousness. Facing long-term risk-free rates of 4-5% in the real world, Crypto investors have begun to re-examine the income sources and risk structures of on-chain assets. A new narrative is quietly taking shape - Yield-bearing Crypto Assets, attempting to build financial products on-chain that "compete with the macro interest rate environment".
However, the income sources of yield-bearing assets vary dramatically. From the protocol's intrinsic cash flow to revenue illusions dependent on external incentives, and the grafting of off-chain interest rate systems, different structures reflect entirely different sustainability and risk pricing mechanisms. We can roughly categorize current decentralized application (DApp) yield-bearing assets into three types: exogenous yields, endogenous yields, and real-world asset (RWA) linked yields.
Exogenous Yields: Interest Illusions Driven by Subsidies
The rise of exogenous yields is a microcosm of DeFi's early high-speed growth logic - creating an "incentive illusion" in the absence of mature user demand and real cash flow. Like early ride-sharing platforms using subsidies to attract users, after Compound initiated "liquidity mining", ecosystems like SushiSwap, Balancer, Curve, Avalanche, and Arbitrum subsequently launched massive token incentives, attempting to buy user attention and locked assets through "yield distribution".
[The translation continues in the same professional and accurate manner for the entire text, maintaining the specified translations for specific terms.]Taking EigenLayer as an example, the protocol provides security support for other systems through a "re-staking" mechanism and receives rewards accordingly. Such earnings do not depend on lending interest or transaction fees, but rather on the market-based pricing of the protocol's service capabilities. It reflects the market value of on-chain infrastructure as a "public good". These reward forms are more diverse, potentially including token credits, governance rights, or even anticipated future earnings, demonstrating strong structural innovation and long-term potential.
In traditional industries, this can be compared to cloud service providers (like AWS) charging fees for computing and security services for enterprises, or financial infrastructure institutions (such as custody, clearing, and rating companies) providing trust guarantees for systems and generating income. These services, while not directly participating in terminal transactions, are indispensable underlying supports for the entire system.
On-chain Real Interest Rates: The Rise of RWA and Interest-Bearing Stablecoins
Currently, more capital is pursuing a more stable and predictable return mechanism: anchoring on-chain assets to real-world interest rates. The core logic is to connect on-chain stablecoins or crypto assets with low-risk financial instruments such as short-term government bonds, money market funds, or institutional credits, thereby obtaining "traditional financial world's definite interest rates" while maintaining the flexibility of crypto assets. Representative projects include MakerDAO's T-Bills configuration, Ondo Finance's OUSG (linked with BlackRock ETF), Matrixdock's SBTB, and Franklin Templeton's tokenized money market fund FOBXX. These protocols attempt to "import" the Federal Reserve's benchmark rate onto the chain as a basic earnings structure.
Simultaneously, interest-bearing stablecoins, as a derivative of RWA, are also emerging. Unlike traditional stablecoins, these assets are not passively anchored to the US dollar but actively embed off-chain earnings into the token itself. Typical examples include Mountain Protocol's USDM and Ondo Finance's USDY, which offer daily interest from short-term government bonds. By investing in US Treasury bonds, USDY provides users with stable earnings, with rates close to 4%, higher than traditional savings accounts' 0.5%.
They aim to reshape the usage logic of "digital dollars", making it more like an on-chain "interest account".
Under the connectivity of RWA, RWA+PayFi is also a scenario worth noting: directly embedding stable earning assets into payment tools, thus breaking the binary division between "assets" and "liquidity". On one hand, users can enjoy interest-bearing earnings while holding cryptocurrencies; on the other hand, payment scenarios do not sacrifice capital efficiency. Products like Coinbase's USDC automatic earnings account on Base L2 (similar to "USDC as a checking account") not only enhance the attractiveness of cryptocurrencies in actual transactions but also open new usage scenarios for stablecoins—transforming from "dollars in an account" to "capital in motion".
Three Indicators for Finding Sustainable Earning Assets
The logical evolution of crypto "earning assets" actually reflects the market's gradual return to rationality and redefining "sustainable earnings". From initial high-inflation incentives and governance token subsidies to more protocols emphasizing self-generating capabilities and connecting with off-chain yield curves, structural designs are moving beyond the extensive "inward absorption" phase towards more transparent and refined risk pricing. Especially under the current high macro interest rates, crypto systems must build stronger "earnings rationality" and "liquidity matching logic" to compete in global capital markets. For investors seeking stable returns, the following three indicators can effectively evaluate the sustainability of earning assets:
- Are the earnings "intrinsically" sustainable?
Truly competitive earning assets should derive earnings from the protocol's own business, such as lending interest or transaction fees. If returns mainly rely on short-term subsidies and incentives, it's like "passing the parcel": earnings exist while subsidies continue, but funds flee once subsidies stop. Such short-term "subsidy" behavior, if transformed into long-term incentives, will deplete project funds and easily enter a death spiral of TVL and token price decline.
- Is the structure transparent?
On-chain trust comes from openness and transparency. When investors leave familiar investment environments backed by intermediaries like banks in traditional finance, how should they judge? Are on-chain fund flows clear? Are interest allocations verifiable? Are there centralized custody risks? If these questions remain unresolved, they constitute black-box operations exposing system vulnerabilities. Only financial product structures that are clear, publicly traceable on-chain, provide genuine underlying guarantees.
- Do earnings match real opportunity costs?
Under the Federal Reserve's high-interest environment, if on-chain products' returns are lower than government bond yields, they will struggle to attract rational capital. By anchoring on-chain earnings to real benchmarks like T-Bills, returns become more stable and could potentially serve as on-chain "interest rate references".
However, "earning assets" are never truly risk-free. No matter how robust their earnings structure, one must remain vigilant about technical, compliance, and liquidity risks in on-chain structures. From adequate liquidation logic to protocol governance centralization, and asset custody arrangements behind RWA, these factors determine whether "definite earnings" genuinely have cashable capabilities. Moreover, the future market for earning assets might represent a reconstruction of on-chain "monetary market structures". In traditional finance, money markets perform core fund pricing through interest rate anchoring mechanisms. Now, the on-chain world is gradually establishing its own "interest rate benchmarks" and "risk-free earnings" concepts, generating a more substantive financial order.
