The Rise of Yield Stablecoins: 50 Projects Compete in the New Blue Ocean with Challenges and Opportunities Coexisting

TokenAlchemist · 2025-07-04T10:01:02+00:00

Yield-generating stablecoins are changing the traditional stablecoin market by attracting users through yield generation, facing challenges such as yield persistence and market competition. About 50 projects are active, with promising cryptos like USDe, which may lead the industry in the future. This field is full of opportunities and challenges, requiring high credibility and capital reserves.

TokenAlchemist

2025-07-04 10:01:02

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Analysis of the Interest-Bearing Stablecoin Market: Opportunities and Challenges for Emerging Projects

Stablecoins are becoming a market consensus. Recently, various innovative stablecoin projects have emerged in the market, such as interest-bearing stablecoin (YBS), and these new types of stablecoins are changing the landscape of traditional stablecoins.

Interest-earning stablecoins attract users through interest earnings, distributing part of the asset income to users, and continue to earn asset income after completing the accumulation of deposits. This is fundamentally different from traditional stablecoins like USDT, where the reserves are managed by the project party and are unrelated to the users.

YBS follows the on-chain banking logic of deposit-lending, deconstructing the power of asset issuance. Unlike Circle’s issuance of USDC which requires political and business cooperation, the YBS project is experiencing explosive growth. The history of the crypto industry is a history of innovation in asset issuance models, and this time, under the name of stability, it appears more moderate compared to previous innovations like ERC-20 and NFTs.

Yield-bearing stablecoins require a yield mechanism and a stablecoin mechanism. Yield-bearing assets can come from on-chain staked assets, such as stETH; they can also come from off-chain yield-generating assets, such as U.S. Treasuries. Both can be used in combination.

Currently, there are about 50 active yield-bearing stablecoin projects in the market. Among them, promising ones include Ethena’s USDe and Sky’s USDS. These projects mainly compete in the retail market for interest calculation, pricing, and payment scenarios, beyond the DeFi giants and institutions.

The main challenges faced by interest-earning stablecoin projects include:

The durability of returns is yet to be verified.
The price fluctuations of the protocol’s main coin may affect the stablecoin.
It is necessary to balance user returns with protocol profitability.

Projects that have the potential to become new industry leaders in the future may include Resolv, Avalon, Falcon, Level, and Noon Capital. Each of these projects has its own innovations and competitive advantages.

Overall, yield-bearing stablecoins are an emerging field full of opportunities and challenges. They require a high level of credibility and capital reserves, unlike simple token issuance. Successful yield-bearing stablecoin projects are expected to play an important role in the cryptocurrency ecosystem.

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