Stablecoins, once static, are now brimming with new vitality. In the traditional model, issuers reaped massive profits by investing user funds in US Treasury bonds, while holders were left as "non-interest-bearing depositors." This unfair dynamic is now being broken.
For a long time, stablecoin holders have been in an awkward position: while their asset value remained stable, the yield was zero. Meanwhile, issuers invested user funds into safe assets like US Treasury bonds, enjoying billions of dollars in annual profits. Data disclosed by Tether shows it holds over $157 billion in US Treasury bonds, ranking it as the 18th largest holder globally, with operating profits reaching $4.9 billion in Q2 2025.
But this landscape is being completely overturned. The rise of yield-bearing stablecoins is upgrading stablecoins from "value-pegging tools" to "yield-generating assets," ushering in a "dividend era" for stablecoins.
Yield-Bearing Stablecoins: Redefining Stable Value
The core of yield-bearing stablecoins lies in their underlying assets generating yield, which is then directly distributed to holders via smart contracts. This stands in stark contrast to traditional stablecoins (like USDT, USDC) – the former turns holders into "non-interest-bearing depositors," while the latter transforms coin holding into a passive investment tool.
Its operational logic can be simplified as:
• Users deposit USD to purchase the stablecoin
• The issuer allocates the funds to yield-generating assets (e.g., US Treasuries, staking rewards)
• Yield is automatically distributed to coin holders via on-chain mechanisms
• Holders enjoy the benefit of "earning yield simply by holding"
This model breaks down the barrier where issuers monopolized profits, returning traditional financial yields like US Treasury interest to users through tokenization.
Leading Projects: A Diverse Spectrum of Yield and Risk
The current yield-bearing stablecoin ecosystem has formed a multi-layered structure catering to different risk appetites:
• Ethena's USDe: Employs a Delta-neutral strategy combining "ETH staking + perpetual futures hedging." Its annualized yield once reached 30%, currently around 9.31%. Its market capitalization has exceeded $10 billion, making it a major player in the space.
• Ondo Finance's USDY: Pegged to short-term US Treasuries, offering a stable yield of approximately 4%-5%. It is essentially a tokenized note, backed by Treasuries and bank deposits, attracting conservative investors.
• PayPal's PYUSD: Upgraded to a yield-bearing stablecoin in 2025, allowing users to earn interest from the underlying US Treasuries even during payment transactions.
• MakerDAO's USDS: An upgraded version of DAI, where user deposits enjoy a 4.75% Savings Rate (SSR), with nearly $2 billion in deposit size.
Value Restructuring: The Leap from "Tool" to "Asset"
The explosion of yield-bearing stablecoins is not just a technological iteration but an innovation in economic models:
-
Redistributing Financial Value
Returning the billions in US Treasury profits, once monopolized by issuers, back to users through on-chain mechanisms. For example, with a US Treasury yield of 4%, a trillion-dollar stablecoin market could generate $40 billion in annual interest – yield-bearing stablecoins turn users from bystanders into participants. -
Unlocking the Core Conduit for RWA (Real World Assets)
Tokenized Treasuries form the foundation of yield-bearing stablecoins. As of 2025, the market cap of on-chain tokenized Treasuries exceeds $5.8 billion, expanding at a quarterly growth rate of 25%. Stablecoins are becoming a "compliant bridge" for traditional yield to flow into the crypto world. -
Activating DeFi Composability
Users can collateralize USDY on Aave for loans or provide liquidity on Curve, stacking additional yield. For instance, with a base yield of 4.5% on USDY, DeFi strategies could boost it to 6%-8%, forming a "yield-generating reinvestment" loop.
Market predictions suggest that driven by regulatory compliance, expansion of cross-border payments, and traditional finance (TradFi) adoption, the stablecoin market size is expected to surpass $1.4 - $4 trillion by 2030, with yield-bearing stablecoins accounting for over 15% of the total stablecoin market.
Yield-bearing stablecoins mark the transition of stablecoins from version 1.0 (pegging tool) to 2.0 (yield-generating asset). They are not just a product of technological innovation but part of a historical process of redistributing financial power – allocating risk-free returns, once monopolized by institutions, to every coin holder through code.
The "yield era" of stablecoins is essentially the crypto market's reinvention of the traditional financial profit distribution mechanism. It not only provides a secure and efficient transaction environment but also maximizes the potential of yield-bearing stablecoins through DeFi composability.
In the future, as RWA tokenization scales further, the integration between stablecoins and the real economy will deepen. When holding stablecoins can provide a 4% annualized yield, they already possess the fundamental conditions to challenge traditional money market funds, becoming a value link connecting the real and digital worlds.
