Original title: Stablecoin Update May 2025
Original source: Artemis
Original translation: Bitpush
In the crypto market, stablecoins are no longer just "stable" - they are quietly helping you make money. From U.S. Treasury bond returns to perpetual contract arbitrage, interest-bearing stablecoins are becoming a new income engine for crypto investors. At present, there are dozens of related projects with a market value exceeding the threshold of 20 million US dollars, with a total value of over 10 billion US dollars. This article will dismantle the income sources of mainstream interest-bearing stablecoins for you, and take stock of the most representative projects in the market to see who is really "making money" for you.
What are interest-bearing stablecoins?
Unlike ordinary stablecoins (such as USDT or USDC) which are only used as value storage tools, interest-bearing stablecoins allow users to earn passive income during the holding period. Their core value lies in bringing additional benefits to holders through underlying strategies while maintaining the stablecoin price anchor.
How is the revenue generated?
The sources of income for interest-bearing stablecoins are diverse and can be mainly summarized into the following categories:
Real World Asset (RWA) Investment: The protocol invests funds in low-risk real-world assets such as U.S. Treasury bonds (T-bills), money market funds, or corporate bonds, and returns the returns on these investments to the coin holders.
DeFi Strategy: The protocol deposits stablecoins into the liquidity pool of decentralized finance (DeFi), conducts liquidity mining, or adopts a "Delta-neutral" strategy to extract profits from market inefficiencies.
Lending: Deposits are lent to borrowers, and the interest paid by borrowers becomes the income of currency holders.
Debt-backed: The protocol allows users to lock crypto assets as collateral and lend stablecoins. The income mainly comes from stability fees or interest generated by non-stablecoin collateral.
Mixed sources: Income comes from a combination of tokenized RWA, DeFi protocols, centralized finance (CeFi) platforms, etc., to achieve diversified returns.
A quick look at the interest-bearing stablecoin market (projects with a total supply of approximately $20 million or more)
Below is a list of some of the current mainstream interest-bearing stablecoin projects, categorized according to their main yield-generating strategies. Please note that the data is total supply, and the list mainly covers interest-bearing stablecoins with a total supply of $20 million or more.
1. RWA-backed (mainly through U.S. Treasury bonds, corporate bonds or commercial paper, etc.)
These stablecoins generate returns by investing funds in real-world, low-risk, yield-yielding assets.
Ethena Labs (USDtb – $1.3 billion): Backed by BlackRock’s BUIDL fund.
Usual (USD 0 – 619M): The liquidity deposit token for the Usual protocol, backed 1:1 by ultra-short-term RWAs (specifically aggregated US Treasury tokens).
BUIDL ($570 million): BlackRock’s tokenized fund holding U.S. Treasuries and cash equivalents.
Ondo Finance (USDY – $560 million): fully backed by U.S. Treasuries.
OpenEden (USDO – $280 million): Revenue comes from reserves backed by U.S. Treasuries and repurchase agreements.
Anzen (USDz – $122.8 million): Fully backed by a diversified portfolio of tokenized RWAs, primarily consisting of private placement credit assets.
Noble (USDN – $106.9M): A composable interest-earning stablecoin backed by 103% US Treasuries, leveraging M0 infrastructure.
Lift Dollar (USDL – $94 million): Issued by Paxos, fully backed by U.S. Treasuries and cash equivalents, and automatically compounded daily.
Agora (AUSD – $89 million): Backed by the Agora Reserve, which includes USD and cash equivalents such as overnight reverse repo and short-term US Treasuries.
Cygnus (cgUSD – $70.9M): Backed by short-term treasuries, it runs as a rebase-style ERC-20 token on the Base chain, with balances automatically adjusted daily to reflect earnings.
Frax (frxUSD – $62.9 million): An upgrade from Frax Finance’s stablecoin FRAX, it is a multi-chain stablecoin backed by BlackRock’s BUIDL and Superstate.
2. Basis trading/arbitrage strategy
This type of stablecoin generates profits through market neutral strategies, such as perpetual contract funding rate arbitrage and cross-trading platform arbitrage.
Ethena Labs (USDe – $6 billion): Backed by a diversified pool of assets, maintaining its peg through spot collateral delta hedging.
Stables Labs (USDX – $671 million): Generates income through a delta-neutral arbitrage strategy between multiple cryptocurrencies.
Falcon Stable (USDf – $573M): Backed by a portfolio of cryptocurrencies, generating yield through Falcon’s market neutral strategies (funding rate arbitrage, cross-exchange trading, native staking, and liquidity provision).
Resolv Labs (USR – $216M): Fully backed by an ETH collateral pool, ETH price risk is hedged via perpetual futures, and assets are managed in off-chain custody.
Elixir (deUSD – $172M): Uses stETH and sDAI as collateral to create a delta-neutral position by shorting ETH and capture a positive funding rate.
Aster (USDF – $110M): Backed by crypto assets and corresponding short futures on AsterDEX.
Nultipli.fi (xUSD/xUSDT – $65M): Earn income through market neutral arbitrage (including Contango arbitrage and funding rate arbitrage) on centralized exchanges (CEXs).
YieldFi (yUSD – $23M): Backed by USDC and other stablecoins, yields from delta-neutral strategies, lending platforms, and yield trading protocols.
Hermetica (USDh – $5.5m): Backed by Delta-hedged Bitcoin, earns funding fees using short perpetual futures on major centralized exchanges.
3. Loan/debt-backed
These stablecoins generate returns by lending out deposits, charging interest, or through stability fees and liquidation proceeds from collateralized debt positions (CDPs).
Sky (DAI – $5.3 billion): Based on CDP (collateralized debt position). Minted by collateralizing ETH (LSTs), BTC LSTs and sUSDS on @sparkdotfi. USDS is an upgraded version of DAI used to earn yield through Sky Savings Rate and SKY rewards.
Curve Finance (crvUSD – $840M): Overcollateralized stablecoin backed by ETH and managed through LLAMMA, with its peg maintained through Curve’s liquidity pools and DeFi integrations.
Syrup (syrupUSDC – $631M): Backed by fixed-rate collateralized loans provided to crypto institutions, with proceeds managed by @maplefinance’s credit underwriting and lending infrastructure.
MIM_Spell (MIM – $241M): An overcollateralized stablecoin minted by locking interest-earning crypto into Cauldrons, with returns coming from interest and liquidation fees.
Aave (GHO – $251M): Minted via collateral provided in the Aave v3 lending market.
Inverse (DOLA – $200 million): A debt-backed stablecoin minted through collateralized lending on FiRM, with yield generated by staking into sDOLA, which earns self-lending income.
Level (lvlUSD – $184M): Backed by USDC or USDT deposited in DeFi lending protocols like Aave to generate yield.
Beraborrow (NECT – $169M): Berachain native CDP stablecoin, backed by iBGT. Income is generated through leverage from liquidity stabilization pools, liquidation income, and PoL incentives.
Avalon Labs (USDa – $193 million): A full-chain stablecoin, minted using assets such as BTC through the CeDeFi CDP model, providing fixed-rate lending and generating yield by staking in the Avalon vault.
Liquity Protocol (BOLD – $95M): is backed by overcollateralized ETH (LSTs) and generates sustainable yield through interest payments from borrowers and ETH liquidation proceeds through its Stability Pools.
Lista Dao (lisUSD – $62.9M): Overcollateralized stablecoin on BNB Chain, minted through CDPs using BNB, ETH (LSTs), stablecoins as collateral.
f(x) Protocol (fxUSD – $65M): minted through leveraged xPOSITIONs backed by stETH or WBTC, with income coming from stETH staking, opening fees, and stability pool incentives.
Bucket Protocol (BUCK – $72M): Overcollateralized CDP-backed stablecoin based on @SuiNetwork, minted by staking SUI.
Felix (feUSD – $71M): Liquity forked CDP on @HyperliquidX. feUSD is an overcollateralized CDP stablecoin minted using HYPE or UBTC as collateral.
Superform Labs (superUSDC – $51M): USDC-backed vault that automatically rebalances across top lending protocols (Aave, Fluid, Morpho, Euler) on Ethereum and Base, powered by Yearn v3.
Reserve (US D3 – $49M): Backed 1:1 by a basket of blue chip interest-bearing tokens (pyUSD, sDAI, and cUSDC).
4. Mixed income sources (combining DeFi, traditional finance, and centralized finance income) This type of stablecoin diversifies risks and optimizes returns by combining multiple strategies
Reservoir (rUSD – $230.5M): An overcollateralized stablecoin backed by RWA and a combination of USD-based capital allocators and lending vaults.
Coinshift (csUSDL – $126.6M): Backed by T-Bills and DeFi lending through Morpho, offering regulated, low-risk returns through a vault curated by @SteakhouseFi.
Midas (mEGDE, mTBILL, mMEV, mBASIS, mRe 7 YIELD – $110M): Compliant, institutional-grade stablecoin strategy. LYTs represent claims on actively managed interest-bearing RWA and DeFi strategies.
Upshift (upUSDC – $32.8M): Interest-earning and partially supported by a lending strategy, but income also comes from LP (liquidity provision), staking.
Perena (USD* - $19.9M): Solana’s native interest-bearing stablecoin, the core of the Perena AMM, earning income from swap fees and IBT-driven liquidity pools.
Summarize
The above highlights interest-bearing stablecoins with a total supply of around $20 million or more, but keep in mind that all interest-bearing stablecoins come with risks. The yields are not risk-free, they may be subject to smart contract risk, protocol risk, market risk, or collateral risk, etc.
