Stablecoin Investment Strategy Update: A New Option for Earning Returns

Against the backdrop of the US dollar index operating at a high level and the decline of risk assets, holding dollar-denominated assets and earning returns has become the choice of many investors. Some leading DeFi projects are also actively utilizing idle dollar assets to generate yields. For example, a well-known DAO organization recently passed a proposal to deposit up to $1.6 billion in USDC into the custodial services of a certain cryptocurrency service provider to earn an annualized return of 1.5%.

This article will introduce the latest developments in several stablecoin investment strategies, continuing from the previous series of articles.

USDD+3Crv Pool

USDD is a stablecoin managed by a certain blockchain ecosystem. As of October 27, the issuance of USDD is 725 million, with collateral value at 2.23 billion, and a collateralization rate exceeding 300%. Among them, USDC collateral amounts to 990 million, far exceeding the issuance of USDD, which poses lower risk. Recently, a certain trading platform delisted HUSD while listing multiple USDD trading pairs and waiving transaction fees, which is also favorable for the development of USDD.

A certain DeFi platform shows that the APR for the USDD+3Crv pool is 19.66%, and the APR for USDD+FRAXBP is 21.18%. The former includes four stablecoins: USDD, DAI, USDT, and USDC, while the latter includes three stablecoins: USDD, FRAX, and USDC. The operation method is to first deposit supported stablecoins on the USDD+3Crv pool page of the platform, and then stake the LP tokens on the platform to earn returns.

In the ecosystem of USDD issuers, USDD is used more widely. On a certain DeFi platform, the APY for the USDD-USDT trading pair can reach as high as 41.9%(, requiring locked staking), while another lending platform has a deposit APY for USDD of 9.52%.

Canto:USDT+NOTE

Canto is an EVM-compatible DeFi public chain in the Cosmos ecosystem, featuring functionalities such as DEX, lending, and the stablecoin NOTE. Currently, Canto's TVL is approximately 100 million USD.

The Canto lending platform shows that the APR for NOTE/USDT LP is 32.14%, and the APR for NOTE/USDC LP is 29.47%. NOTE is a stablecoin minted through over-collateralization in Canto, and there will be no liquidation when the collateral is USDC and USDT. Currently, the price of NOTE is $1.04, and direct purchase is not recommended; instead, you can use part of your USDT to mint NOTE through collateralization, then provide liquidity with the remaining USDT, and finally stake the LP tokens on the lending platform.

It is important to note that Canto's cross-chain operations are relatively complex, requiring multiple steps for both entry and exit.

Velodrome:sUSD+LUSD

Velodrome is a DEX on Optimism, with code sourced from a well-known developer's project on Fantom. Currently, Velodrome's TVL is $82 million, surpassing some mainstream DEXs on Optimism.

sUSD and LUSD are stablecoins issued by two relatively secure decentralized stablecoin projects. Currently, the APR for the sUSD/LUSD trading pair liquidity mining in Velodrome is 16.12%.

Helio:HAY+BUSD

Helio Protocol is a liquidity staking and lending protocol on the BNB chain. Users can over-collateralize to borrow Helio's decentralized stablecoin HAY, and the staked BNB will be used for liquidity staking.

A certain mainstream DEX has specifically added a StableSwap exchange entry for HAY and BUSD on the Swap page, indicating that HAY has a certain background. Currently, Helio's TVL is 92 million USD, with approximately 20 million USD in staked HAY/BUSD Stable LP.

Investors can provide liquidity for the HAY/BUSD stablecoin trading pair in the DEX, and then stake the LP tokens in Helio, currently showing an APR of 19.77%.

Wombat Exchange Ecosystem: Multiple stablecoins

Wombat Exchange is a stablecoin exchange DEX on the BNB chain, featuring low slippage, shared liquidity, and the ability to stake with a single token. Its investors include several well-known institutions, and it has a close relationship with a leading exchange.

Currently, the median APR of USDC, USDT, DAI, and BUSD in the Wombat main pool is 11.44%, 11.14%, 10.85%, and 7.57% respectively, which includes locking WOM and holding veWOM for acceleration. If there is no locking of WOM, the returns will be lower.

Applications similar to Convex have also emerged around Wombat, such as Wombex Finance and Magpie, where ordinary users can earn higher yields through these applications. Wombex currently has a TVL of $89.49 million, with deposit APRs of 13.93%, 12.71%, 15.29%, and 17.16% for USDC, USDT, DAI, and BUSD respectively. Magpie has a TVL of $25.90 million, with corresponding APRs of 11.62%, 11.82%, 14.52%, and 9.65%.

It is important to note that the overall risk of the cryptocurrency market is higher than that of traditional financial markets, with frequent security incidents. Investors should diversify their risks and fully understand the relevant risks before investing.