Financial Dilemma: Finding New Options for Steady Returns

In recent years, finding suitable investment products has become increasingly challenging. Bank interest rates continue to decline, and the returns on government bonds and money market funds struggle to outpace inflation, while the yields on insurance investment products are also quietly decreasing. For investors looking to achieve asset appreciation, repeatedly searching through various financial applications and only seeing low yield rates of around 1% is inevitably frustrating.

We seem to be in an era with an unprecedented variety of financial products, but stable and profitable investment methods are becoming increasingly scarce. Against this backdrop, investment methods that were originally limited to the cryptocurrency space, especially on-chain investments based on stablecoins, are gradually attracting more attention.

Why Should We Pay Attention to Stablecoin Wealth Management?

Stablecoins are a type of digital asset that is pegged to fiat currencies, which do not exhibit the price volatility of Bitcoin, and primarily serve the function of "digital cash." Stablecoin investment refers to users lending, staking, or investing idle stablecoins on the blockchain or centralized platforms to obtain corresponding annual returns.

The logic of this investment method is not complicated; it is similar to banks using deposits for lending to earn interest spreads. The difference is that in the blockchain world, this "interest spread" is more transparent, and the distribution of earnings is more reasonable. Currently, common stablecoin investment products can be divided into the following categories: lending, staking, liquidity mining, and fixed income.

Data from the first half of this year shows that the annualized interest rates for USDT/USDC in mainstream decentralized finance ( DeFi ) lending protocols mostly fluctuate between 2.5% and 4%. Some DeFi platforms offer total annualized returns that may exceed 8% through liquidity mining or reward mechanisms, but this usually comes with higher volatility and lock-up requirements. In contrast, fixed income products, while not offering the highest yields, show steady growth overall, reaching up to around 5%. Due to their stable returns and lower thresholds, these products have become the preferred on-chain wealth management method for many users.

More importantly, the flexibility and user experience of these products are being rapidly optimized. Users only need to hold stablecoins, choose the platform and product type, and they can subscribe with one click. Some platforms also support on-demand deposits and withdrawals, with interest calculated daily. This operation mode is as convenient as Yu'ebao while also earning interest close to that of U.S. Treasury bonds; it is as stable as fixed deposits but without penalties for early redemption. This experience of "stability with flexibility" is precisely the ideal financial management state for many users.

Advantages of Stablecoin Wealth Management

Compared to fixed-income products in traditional financial markets, stablecoin wealth management has the following advantages:

1. Higher yield: usually higher than bank deposits and money market funds.
2. Flexible Redemption Mechanism: Most support deposit and withdrawal at any time, with interest calculated daily, without the need for locking or setting a yield period.
3. High Transparency: Most platforms disclose the sources of income, risk explanations, and fund flows, with some even verifying the safety of funds in real-time through on-chain data.
4. Reasonable profit distribution: The platform no longer "eats the interest spread", but distributes the actual lending or matching profits proportionally to the investors.

Sources of Income for Stablecoin Wealth Management

The returns from stablecoin wealth management mainly come from three aspects:

1. On-chain lending interest: The platform lends out the stablecoins locked by users to other users to earn profits.
2. Staking rewards or node income: especially in Staking products.
3. Profit distribution for participating in options or yield layering strategies.

For users, as long as the platform's product structure is open and transparent, and asset custody is secure, these can be regarded as "quasi-fixed income products" on the chain.

Development Trends of Stablecoin Wealth Management

Currently, the number of on-chain active addresses for stablecoins continues to grow. Although there are no clear statistics on the number of users participating in stablecoin financial management, the scale is rapidly expanding based on on-chain activity and capital inflows. Especially in regions like Southeast Asia, Latin America, and the Middle East, where local currencies are unstable and financial system coverage is inadequate, stablecoins have become an important means for residents to hedge against local currency depreciation and obtain returns on dollar-denominated assets.

It is worth noting that institutional funds are also continuously entering this field. Insurance companies, family offices, and funds have incorporated stablecoin financial management into their liquidity management tools as part of their dollar asset pool. This trend drives platforms to continuously upgrade in risk control, transparency, and compliance, providing individual users with a more mature product environment and service experience.

Risk Warning

Although stablecoin wealth management has many advantages, risk identification is still crucial as an emerging field:

1. Some stablecoins may face de-pegging risks due to issues such as settlement mechanisms and management of anchor assets.
2. Factors such as smart contract audits and security measures can affect the safety of funds.
3. The uncertainty of regulatory policies may affect the compliance and sustainability of products.

Therefore, for ordinary users, it is recommended to choose top platforms or products from regulated institutions, prioritizing stablecoin investment methods with clear yield structures and flexible redemption support. A cautious attitude should be maintained towards products with annualized yields exceeding 10%, avoiding blind pursuit of high returns. Stability, transparency, and compliance should be the prerequisites for long-term participation.

Conclusion

In the current low interest rate environment, stablecoin wealth management offers investors a new robust investment option. While it may not lead to getting rich quickly, it could become one of the most stable sources of returns in an asset allocation. It is more like a "digital cash-like asset" in the wealth management puzzle, providing higher returns than demand deposits and lower volatility than stocks, making it suitable for seeking certainty in uncertain environments.

As the regulatory framework for stablecoins gradually improves across various regions of the world, users will have more secure, compliant, and transparently profitable products to choose from. In this era of uncertainty, stablecoin wealth management offers investors a "crypto savings account" with a transparent, secure, annualized return rate close to 5%, helping people find relatively stable returns amidst turmoil.