What are the income stablecoins? 20 types of income stablecoins

If users want to pursue profit maximization, they can maximize the value of the stablecoin through profit-based stablecoins.

Earnings stablecoins are assets that generate returns through DeFi activities, derivatives strategies, or RWA investments. Currently, these stablecoins account for 6% of the US$240 billion market capitalization of stablecoins. As demand grows, JPMorgan believes that the share of 50% is not out of reach.

Income stablecoins are minted by depositing collateral into an agreement. The deposited funds are used to invest in the income strategy, and the income is shared by the holder. It's like a traditional bank lending out the funds deposited and sharing interest with depositors, except that the interest rate for the income stablecoin is higher.

This article aims to take stock of 20 stablecoins that can generate profits.

20 types of income stablecoins

1.Ethena Labs (USDe/sUSDe)

Ethena maintains the value of its stablecoin and generates returns through delta neutral hedging.

USDe's casting method is to deposit the pledged ETH (stETH) into the Ethena protocol. Afterwards, the ETH position is hedged by short selling.

In addition to the earnings of stETH (current annual interest rate is 2.76%), the positive capital rate for shorting will also generate returns, and Ethena will allocate these benefits to users who pledge USDe in exchange for sUSDe (annual interest rate is 5%).

2.Spark (sDAI)

sDAI is generated by depositing DAI into Maker's DAI savings Rate (DSR) contract. The current annualized rate of return is 3.25%.

The income is accumulated through the interest rate of the DSR (interest rate is determined by MakerDAO). sDAI can also be traded or used in DeFi like other stablecoins.

3.Ondo Finance (USDY)

Ondo issues USDY with USDC deposit. The deposited assets are used to purchase low-risk assets such as Treasury bills (approximately 4 - 5% annual interest rate), with most of the interest shared by USDY holders.

The yield of USDY is set once a month and remains stable throughout the month. The annualized rate of return this month is 4.25%.

Note: The yield of USDY is reflected in the price of the token, not in quantity. That's why USDY is always above $1.

4.BlackRock (BUIDL)

BUIDL stablecoins represent ownership of BlackRock-managed tokenized money market funds (MMFs).

The fund invests in cash and other instruments, such as short-term Treasury bills and repurchase agreements, and distributes interest to BUIDL holders.

The fund's yield is calculated daily but is allocated monthly to BUIDL holders.

5. Figure Markets (YLDS)

YLDS is the first income stablecoin registered as a public security in the US SEC.

Figure Markets earns profits by investing in the same securities held by premium money market funds (MMFs) that are at higher risk than tokenized government-backed money market funds (MMFs).

YLDS offers an annual interest rate of 3.79%. Interest is accumulated daily and paid monthly in US dollars or YLDS tokens.

6.Sky (USDS/sUSDS)

USDS is a renamed version of DAI, and can be minted by depositing qualified assets through Sky Protocol.

It can be used for DeFi or earning benefits from Sky Protocol via Sky Savings Rate (SSR) contracts. sUSDS is issued based on USDS deposits with an annual interest rate of 4.5%.

7.Usual (USD0)

USD0 is fully supported by real-world assets (RWAs) such as Treasury bills and is minted by depositing USDC or eligible RWAs on the Usual platform as collateral.

Users can also pledge USD0 on Curve to get USD0 (annual interest rate 0.08%). USD0 can be used for DeFi, with earnings issued in the form of USUAL tokens (13% annual interest rate).

Note: To obtain USD0 income, a 4-year pledge is required.

8. Mountain Protocol (USDM)

Mountain Protocol generates revenue by investing in short-term U.S. Treasuries, but USDM is specifically targeted at non-U.S. users.

The proceeds of these Treasuries are allocated to USDM holders through the daily adjustment system, so the balance automatically reflects the earned benefits.

USDM currently offers an annualized rate of return of 3.8%.

9.Origin Protocol (OUSD)

OUSD is minted by depositing stablecoins such as USDC, USDT and DAI on Origin Protocol.

Origin deploys collateral into low-risk DeFi strategies to generate revenue through borrowing, liquidity provision and transaction fees. These benefits are allocated to OUSD holders through automatic adjustment benchmarks.

OUSD is backed by stablecoins with an annual interest rate of 3.67%.

10.Prisma Finance (mkUSD)

mkUSD is powered by liquid staking derivatives. Earnings are generated through rewards for underlying pledged assets (2.5% - 7% annual interest rate) and are distributed among mkUSD holders.

mkUSD can be used for liquidity mining through platforms such as Curve, or can be staked in Prisma's stable pool to obtain PRISMA and ETH rewards from liquidation.

11.Noble (USDN)

USDN is backed by short-term Treasury bonds. The earnings are from interest on short-term government securities and are allocated to USDN holders (annual interest rate 4.2%).

Users can earn base earnings by depositing USDN into flexible vaults, or earn Noble points by depositing them into USDN locked vaults (up to 4 months).

12.Frax Finance (sfrxUSD)

frxUSD is backed by assets of BUIDL, a subsidiary of BlackRock, generates revenue by leveraging its underlying assets such as Treasury bills and participating in DeFi.

The earnings strategy is managed by a benchmark earnings strategy (BYS), which dynamically distributes the pledged frxUSD to the source of the highest returns, allowing sfrxUSD holders to the highest returns.

13.Level (lvlUSD)

lvlUSD is cast by depositing and pledging USDC or USDT. The collaterals are deployed in blue-chip lending agreements such as Aave and Morpho.

Users can pledge IvIUSD in exchange for sIvIUSD, thereby enjoying the benefits brought by DeFi strategies.

The annual interest rate is 9.28%.

14. Davos (DUSD)

DUSD is a cross-chain stablecoin that can be minted with sDAI and other liquidity collateral. It generates income by re-private derivatives and distributes the income from the underlying assets to DUSD holders.

DUSD can be deposited into liquidity pools or value-added treasuries, or pledged on Davos, earning 7-9% annual interest rates and interest income from lending.

15. Reserve (USD3)

The method of casting USD3 is: deposit PYUSD on Aave v3, deposit DAI on Spark Finance, or deposit USDC on Compound v3.

The proceeds generated from distributing collateral to the top DeFi lending platform will be distributed to USD3 holders (annual interest rate of approximately 5%).

Reserve Protocol provides over-collateralization for USD3 to prevent decoupling.

16.Angle (USDA/stUSD)

USDA cast by depositing USDC. USDA earnings are generated through DeFi lending, Treasury bills and tokenized securities trading.

USDA can be deposited into Angle's savings solution for stUSD. stUSD holders can receive USDA income (annual interest rate 6.38%).

17. Paxos (USDL)

USDL is the first stablecoin to provide daily income under the regulatory framework. Its earnings come from short-term U.S. securities held in Paxos reserves, with a yield of approximately 5%, and USDL holders can automatically receive USDL returns.

18.YieldFi (yUSD)

yUSD is backed by stablecoins and can be minted by depositing USDC or USDT on YieldFi (annual interest rate 11.34%).

YieldFi generates revenue by deploying collateral through a delta neutral strategy, while yUSD can be used in DeFi strategies such as lending and providing liquidity on protocols such as Origin Protocol.

19.OpenEden (USDO)

USDO is supported by tokenized U.S. Treasury and money market funds such as OpenEden's TBILL.

Its underlying assets are invested through on-chain and off-chain strategies to generate returns. The proceeds are allocated to USDO holders through the daily rebase mechanism.

The underlying assets are invested through on-chain and off-chain strategies to generate returns. This earnings are distributed daily to USDO holders.

20.Elixir (deUSD/sdeUSD)

Similar to Ethena's USDe, deUSD's earnings come from its investment in traditional assets such as U.S. Treasury bonds, and the rates of capital arising from borrowing within the Elixir agreement.

Users who pledge deUSD to sdeUSD receive 4.39% annualized income and 2 times potion rewards.

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