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Yield-Bearing Stablecoins Explained: Where Does the Yield Come From, and What Are the Risks?

DeFi Protocol Research Lab | Deep Dive | Data as of January 2026

In early 2024, a category called “yield-bearing stablecoins” started gaining traction in DeFi circles.

By the end of 2025, total issuance in this category had surged from $1.5 billion to $11 billion—a 7x increase in just over a year. Ethena’s sUSDe briefly reached $6 billion TVL, Usual’s USD0 became the fastest-growing RWA stablecoin, and over 80% of assets locked in Pendle became various yield-bearing stablecoins.

What’s more interesting is that traditional stablecoin giants are getting nervous. Circle and Tether earn over $13 billion annually in interest from their reserves, yet they pass 0% of that yield to holders. This model is being challenged by yield-bearing stablecoins—why should issuers keep all the interest while users get nothing?

This article answers three questions:

  1. Where does yield-bearing stablecoin yield come from?
  2. What are the differences between various protocols?
  3. What risks lurk behind high yields?

Note: This space evolves rapidly with new products emerging constantly. Pendle alone lists over 20 different yield-bearing stablecoin products. This article focuses on five core yield models to help you build a mental framework, rather than cataloging every product.

If you’re holding large amounts of stablecoins watching them depreciate in your wallet, this article might change your thinking.

Part 1: What Are Yield-Bearing Stablecoins?

The “Interest Black Hole” of Traditional Stablecoins

Let’s start with a fact that frustrates many people.

Your USDT or USDC is technically “generating” yield—but that yield goes into Tether and Circle’s pockets, not yours.

How? Simple. When you pay $1 for 1 USDC, what does Circle do with that dollar? They deposit it in banks and buy Treasury bills. In 2025, short-term US Treasury yields are around 4-5%. Circle manages approximately $76 billion in USDC reserves, earning $3-4 billion annually in interest alone.

Tether is even more extreme. With $183 billion in reserves, their annual interest income exceeds $6 billion.

And your yield as a USDC/USDT holder?

Zero. Not a single cent.

In traditional finance, this is equivalent to depositing money at a bank, the bank lending it out and earning the spread, then telling you “the interest is ours, nothing to do with you.” Sounds absurd, but this is how centralized stablecoins currently operate.

The Core Logic of Yield-Bearing Stablecoins

Yield-bearing stablecoins do something simple: distribute underlying yields to holders.

Hold sUSDe, and the protocol distributes earnings (from staking yields + funding rates) to you. Hold USD0++, and the protocol distributes Treasury yields to you. Just hold and earn—like bank deposits earning interest.

Sounds great, right? But here’s the question: Where does the yield come from?

This is the crucial question for yield-bearing stablecoins. Different protocols have completely different yield sources and completely different risk profiles. Some yields come from Treasuries (relatively stable), some from perpetual contract funding rates (highly volatile), some from lending interest (depends on market demand).

Understanding yield sources is the first step in assessing risk.

Part 2: Yield Source Classification: Five Models, Five Risk Profiles

Yield-bearing stablecoin yields can be categorized into five major types. Let’s break them down one by one.

2.1 Delta-Neutral Strategy: Ethena sUSDe

Ethena is currently the largest yield-bearing stablecoin protocol, with TVL reaching $6 billion at its peak. Its yield source is a strategy called “delta-neutral.”

What is Delta-Neutral?

Simply put, it means going long and short on the same asset simultaneously, so price movements have no net effect on you, earning only the “carry” spread.

Specifically for Ethena:

  1. Long side: Buy stETH (Lido’s staked ETH) with deposited funds, earning ~3-4% staking yield
  2. Short side: Open equivalent ETH perpetual contract shorts on centralized exchanges (Binance, Bybit, OKX, etc.)

ETH goes up? Long side profits, short side loses, they cancel out. ETH goes down? Long side loses, short side profits, they cancel out.

The real yield comes from perpetual contract funding rates. Perpetuals have no expiration date, so to keep contract prices anchored to spot prices, exchanges designed a balancing mechanism: when longs dominate (contract price above spot), longs pay shorts every 8 hours; when shorts dominate, shorts pay longs.

Funding rates typically settle every 8 hours. Assuming a rate of 0.01%/8h (common during bull markets), annualized that’s 0.01% × 3 × 365 ≈ 11%. During bull market peaks, rates might reach 0.03%-0.05%/8h, annualizing to 33%-55%. But during bear markets or sideways action, rates might approach zero or even go negative.

Historically, crypto markets favor longs most of the time, keeping funding rates positive. That’s how Ethena makes money.

Yield Breakdown:

Yield Source Yield Rate Stability
stETH staking yield ~3-4% Stable
Perpetual funding rates 0%-15%+ Highly volatile
Total 3%-18% Depends on market sentiment

Important to emphasize: funding rate yields are extremely volatile. During the 2024-2025 bull market, sUSDe yields exceeded 20%. But in November 2025 when the market cooled, funding rates compressed to near zero, sUSDe yields plunged from 11% to 5%, and TVL dropped 50% in one week.

Core Risk: Funding rates can turn negative. If the market turns bearish with fewer longs, shorts have to pay longs instead, causing Ethena’s yields to drop significantly or even turn negative.

Similar Products: Ethena isn’t the only delta-neutral protocol. Noon Capital’s sUSN/sNUSD and Resolv Labs’ USR use similar strategies. Their core logic is identical, but they differ in exchange selection, collateral types, and risk management. If you like delta-neutral but worry about single-protocol risk, consider diversifying.

2.2 RWA Treasury Yields: Usual USD0, Ondo USDY

If Ethena’s strategy seems too complex, RWA (Real World Assets) yield-bearing stablecoins might suit you better.

The mechanism is simple: the protocol takes deposited funds to buy short-term US Treasuries, then distributes Treasury yields to holders.

This is nearly identical to traditional money market funds (MMFs)—the US MMF market exceeds $7 trillion and is a very mature product. DeFi is just bringing it on-chain.

Representative Projects:

Protocol Underlying Assets Current Yield Features
Usual USD0++ Short-term US Treasuries 4-6% Staked version of USD0, 4-year lock for yield + USUAL tokens
Ondo USDY Short-term Treasuries + bank deposits 4-5% Institutional focus, strong compliance
Sky sUSDS Treasuries + MakerDAO stability fees 6-8% Formerly sDAI, has additional DeFi yields

Note: USD0 and USD0++ are different things. USD0 is the base stablecoin (1:1 USD peg), USD0++ is the staked version of USD0, more like a “bond”—you lock USD0 for 4 years in exchange for Treasury yields and USUAL token rewards. Because it’s bond-like, USD0++ market price can be below $1 (similar to bond discount).

Why are yields lower than Ethena?

Because the underlying assets are Treasuries, yields are capped by Fed interest rates. In 2025, US short-term Treasury yields are around 4-5%, so RWA stablecoin yields are in that range.

Core Advantage: Stable, predictable yields not dependent on crypto market funding rates.

Core Risks:

  1. Fed rate cuts → Treasury yields drop → stablecoin yields drop
  2. RWA custodian (Securitize, BlackRock, etc.) counterparty risk
  3. Regulatory uncertainty—does distributing Treasury yields to token holders constitute a “security”?

2.3 Lending Yields

The third model is more traditional: lend out stablecoins and earn interest from borrowers.

This is essentially the bank’s deposit-loan business—you deposit money, the bank lends it to those who need funds, then shares a portion of the interest with you.

Representative Projects:

These products’ yields depend on market lending demand. During bull markets when everyone is leveraging up, lending rates can spike above 10%; during bear markets with no borrowing, rates might drop to 1-2%.

Core Risks: Borrower defaults (though DeFi lending is typically over-collateralized), protocol smart contract risk.

2.4 Yield Tranching: Strata srUSDe/jrUSDe

The fourth model is the most interesting and most complex—yield tranching.

Why tranching? Because sUSDe yields are too volatile—15% in bull markets, potentially 2% or even negative in bear markets. Some people find it too unstable and want fixed income; others see the volatility as an opportunity for leveraged bets. Strata matches these two types: conservative investors get fixed returns, aggressive investors take on volatility to chase excess returns.

Strata is a new protocol from 2025 that specifically does this. It splits Ethena’s sUSDe into two products:

Traditional finance analogy: This is the CDO/CLO (Collateralized Debt Obligation) structure. Banks bundle loans and slice them into “senior” and “junior” tranches. Senior gets paid first, junior gets the remainder. If underlying assets have problems, junior takes losses first.

Complete example:

Assume the pool has $100 of sUSDe, where:

Now let’s see what happens in different market conditions:

Scenario sUSDe Annual Total Yield sr Takes (fixed 5%) jr Actually Gets jr Actual Annual
Bull 10% $10 $4 $6 30%
Flat 5% $5 $4 $1 5%
Bear 2% $2 $4 -$2 -10%

See the leverage? jrUSDe uses 20% of capital but bears 100% of yield volatility.

Leverage multiplier = Total pool / jrUSDe size = 100/20 = 5x

So jrUSDe’s leverage doesn’t appear from nowhere—it comes from the capital ratio in the tranche structure. The higher sr’s share, the greater jr’s leverage.

Essentially, jrUSDe holders are “selling insurance”—collecting excess returns as premiums during bull markets, paying out to srUSDe holders during bear markets.

Different risk profiles can choose different products:

User Type Suitable Product Reason
Conservative investors srUSDe Stable yields, low volatility
Institutional treasury srUSDe Predictable cash flows, like fixed income
Aggressive speculators jrUSDe Leveraged long on yields, high risk high reward
Ethena bulls jrUSDe Believe funding rates will stay high

Core Risks:

  1. jrUSDe can continuously lose: If sUSDe yields stay low long-term, jrUSDe holders keep “subsidizing” srUSDe
  2. Structural complexity: Many users may not understand jrUSDe’s risk is leveraged
  3. Liquidity risk: May be difficult to exit in extreme situations
  4. Stacked smart contract risk: Strata is built on Ethena—problems at any layer affect everything

2.5 Yield Aggregation/On-Chain Funds: Midas, Maple, YieldNest

The fifth model is fundamentally different from the previous four: not an auto-executing protocol strategy, but an actively managed “on-chain hedge fund”.

Representative Products:

Product Manager Strategy Type Current APY Features
Midas mHYPER Hyperithm Multi-strategy aggregation 8-15% Leveraged USDe, Pendle mining, basis trading, etc.
Midas mAPOLLO Apollo Multi-strategy aggregation 6-12% Similar to hedge fund strategies
Maple syrupUSDC Maple Finance Institutional lending 8-12% Provides over-collateralized loans to institutions
YieldNest ynUSDx YieldNest MAX strategy 8-15% Aggregates multiple stablecoin yield strategies

Differences from the first four models:

  1. Active management vs auto-execution: Ethena’s strategy is fixed (stake + short), code executes automatically. But mHYPER’s strategy is actively adjusted by the Hyperithm team—today might be leveraging on Aave, tomorrow might be mining on Pendle.

  2. Strategy transparency: With the first four models, you can clearly see where yields come from. On-chain fund strategies can be complex, requiring trust in fund manager disclosures.

  3. Risk characteristics: Yields depend on fund manager ability and judgment, not just market conditions.

Midas Platform: Worth special mention. It’s not a product but a “on-chain fund issuance platform.” Different fund managers (Hyperithm, Apollo, MEV Capital, etc.) issue their products (mHYPER, mAPOLLO, mMEV, etc.) on Midas. Midas provides a unified legal framework, custody, and transparency disclosures.

Core Risks:

  1. Fund manager risk: Strategy mistakes can cause losses
  2. Transparency risk: Some strategies involve CEX operations, not fully verifiable on-chain
  3. Liquidity risk: Some products may have redemption restrictions
  4. Legal structure risk: Investors hold “subordinated loans” to Midas, not independent assets

These products suit investors who believe professional fund managers can outperform passive strategies and are willing to accept additional manager risk. But do your due diligence—not all fund managers are trustworthy.

2.6 Protocol Comparison Summary

After covering five models, here’s a comprehensive comparison:

Protocol Type TVL (End 2025) Current APY Yield Source Yield Stability Risk Level
Ethena sUSDe Delta-neutral ~$3B 5-15% Staking + funding rates Volatile Medium-High
Noon sUSN Delta-neutral ~$300M 5-12% Funding rates Volatile Medium-High
Usual USD0++ RWA Treasury ~$1B 4-6% US Treasuries Stable Low
Ondo USDY RWA Treasury ~$500M 4-5% Treasuries + bank deposits Stable Low
Sky sUSDS Hybrid ~$2B 6-8% Stability fees + Treasuries Fairly stable Medium
Maple syrupUSDC Institutional lending ~$500M 8-12% Institutional loan interest Fairly stable Medium
Midas mHYPER On-chain fund ~$100M 8-15% Multi-strategy active management Volatile Medium-High
Strata srUSDe Tranche-Senior ~$200M 5-7% sUSDe priority portion Fairly stable Medium-Low
Strata jrUSDe Tranche-Junior ~$50M 15-30% sUSDe remaining yields Extremely volatile High

Choose based on risk preference:

Part 3: Why Are All Yield-Bearing Stablecoins on Pendle?

If you’ve been following yield-bearing stablecoins, you’ll notice an interesting phenomenon: massive amounts of yield-bearing stablecoins are deposited in the Pendle protocol.

In Q3 2025, Pendle announced that stablecoins (primarily yield-bearing stablecoins) comprised about 80% of its TVL. Currently, dozens of yield-bearing stablecoin products trade on Pendle—sUSDe, USD0++, sUSDS, syrupUSDC, mHYPER, and more—covering nearly all models mentioned in this article.

The reasons behind this are worth analyzing in depth.

3.1 What Problem Does Pendle Solve?

Yield-bearing stablecoins have a natural problem: yields are floating.

Today sUSDe might yield 11% annually, next month might be 5%, the month after might be 15%. If you’re an institution wanting “certainty”—say, locking in 10% fixed yield for the next six months—simply holding sUSDe can’t achieve that.

Pendle’s solution is to split yield into two independently tradeable tokens:

3.2 Practical Strategies

Strategy 1: Lock in Fixed Yield (Buy PT)

Assume sUSDe’s current implied annual yield is 10%, and Pendle has a pool maturing in 6 months.

You can buy 1 PT-sUSDe for 0.95 USDC. In 6 months, this PT can be redeemed for 1 sUSDe (worth about $1).

The math: your return is 5% (half year), annualized about 10%. And this return is guaranteed—regardless of how sUSDe’s actual yield fluctuates over these six months, you get 10%.

Strategy 2: Leveraged Long on Yield Rate (Buy YT)

Conversely, if you think sUSDe’s yield rate will rise, buy YT.

YT prices are low (since it only represents future yield, not principal), essentially giving you leveraged exposure to yield rates with small capital. While holding YT, you continuously receive yields generated by the underlying asset; at maturity, the YT token itself goes to zero (because yield rights are exhausted). Profit/loss depends on: whether total yields received exceed the cost of buying YT. If yields are high, you profit big; if yields are low, you might lose most of your principal.

Direct Holding vs Pendle PT: How to Choose?

Dimension Hold sUSDe Directly Buy PT on Pendle
Yield type Floating, changes with market Fixed, locked-in maturity yield
Flexibility Exit anytime Has maturity date, early exit may lose money
Suitable scenario Bullish on rising yields, or need flexibility Want certainty, willing to lock for a period
Yield comparison Depends on actual market performance Usually slightly higher than current yield (time premium)

Simply put: If you want certainty and predictable returns, buy PT; if you’re bullish on yields rising or need to exit anytime, hold directly.

3.3 Pendle’s Role

Pendle has essentially become the “interest rate exchange” for yield-bearing stablecoins—you can buy and sell expectations about future yields here.

This serves several important functions for the ecosystem:

  1. Price discovery: Market expectations for sUSDe’s future yields are reflected in PT/YT prices
  2. Risk transfer: Those who don’t want yield volatility sell YT, those willing to bear it buy YT
  3. Liquidity aggregation: Massive yield-bearing stablecoins deposit in Pendle, forming deep markets

3.4 PT/YT vs Strata sr/jr: Comparing Two Tranching Logics

Reading this far, you might notice: Pendle’s PT/YT and Strata’s srUSDe/jrUSDe from Part 2 look similar—both split one asset into two halves. They are indeed two implementations of the same financial engineering concept, but they split along different dimensions.

Pendle PT/YT: Split by “Time”

Imagine you have a $100 certificate of deposit maturing in 1 year that will generate $10 in interest. Pendle splits it into two parts:

Key mechanism: PT + YT = Underlying Asset. In Pendle, you can split 1 sUSDe into 1 PT + 1 YT, and combine 1 PT + 1 YT back into 1 sUSDe. Arbitrage ensures: PT price + YT price ≈ sUSDe price.

Assuming sUSDe = $100, market expects 10% annual yield:

PT buyers are “locking in fixed yield”—buy at $91, redeem for 1 sUSDe (≈$100) after 1 year, 9.89% return, guaranteed. PT’s yield isn’t backed by YT, but by Pendle’s contract redemption mechanism: PT can be redeemed 1:1 for underlying assets at maturity.

There’s an implicit risk: PT guarantees redemption for underlying assets, not for dollars. If sUSDe depegs to $0.80, PT at maturity still redeems for 1 sUSDe, but that’s only worth $80—you’ve actually lost. So PT’s risk = underlying asset’s risk.

YT’s yield logic is completely different. You pay $9 for YT and can collect all interest generated by underlying assets during the year. If actual interest is $10, you profit $1 (11% return); if interest rises to $15, you profit $6 (67% return); but if interest is only $5, you lose $4 (44% loss). This is YT’s leverage effect—amplifying yield rate volatility with small capital. YT buyers are essentially “going long on yield rates.”

Strata srUSDe/jrUSDe: Split by “Risk Priority”

Strata doesn’t cut by time, but by “who gets paid first”:

This is like building loans: the bank is senior creditor, takes interest first; shareholders are junior equity, take remaining profit.

The key difference: jrUSDe must use principal to cover srUSDe shortfalls. If sUSDe yields only 3% but srUSDe promises 5%, the 2% difference comes from jrUSDe’s principal. This differs from PT/YT—when YT loses, it goes to zero at most, never pays PT.

Key Differences Comparison

Dimension Pendle PT/YT Strata srUSDe/jrUSDe
Split basis Time (principal vs future yield stream) Risk priority (senior vs junior)
Low-risk side PT (redeems principal at maturity) srUSDe (takes fixed yield first)
High-risk side YT (yield volatility, goes to zero at maturity) jrUSDe (remaining yield, can be negative)
Yield guarantee mechanism Contract redemption (PT→underlying) Junior backstop (jr subsidizes sr)
Does high-risk side backstop? No, YT goes to zero at maturity Yes, jr uses principal to subsidize sr
Maturity mechanism Fixed maturity date No maturity, runs continuously
Suitable scenario Lock in yields for a specific future period Adjust risk exposure (stability or leverage)

Because they split along different dimensions, these two mechanisms can be “nested”:

  1. sUSDe (Ethena’s yield-bearing stablecoin)
  2. Through Strata, split by risk into srUSDe + jrUSDe
  3. jrUSDe then through Pendle, split by time into PT-jrUSDe + YT-jrUSDe

YT-jrUSDe is “leverage on leverage”—bearing both junior’s risk amplification and time-dimension yield leverage. These products can have extremely high returns, but also extreme risk—any layer having problems collapses the entire chain.

Selection Guide:

Part 4: Deep Risk Analysis: The Price of High Yield

Yield-bearing stablecoins sound great—hold and earn money, better than regular stablecoins. But there’s no free lunch. Multiple risks lurk behind high yields. Let’s break them down one by one.

4.1 Funding Rate Risk (Ethena-Specific)

This is Ethena’s biggest risk point.

sUSDe’s yield primarily comes from perpetual contract funding rates. During bull markets, longs dominate, funding rates are positive, and shorts profit. But if the market turns bearish with fewer longs, funding rates can turn negative—shorts must pay longs instead.

Historical Case:

In November 2025, crypto market sentiment cooled, and funding rates compressed significantly. sUSDe yields plunged from 11% to 5%, with TVL dropping 50% in one week. Many users rushed in during high yields and panic-exited during low yields.

More extreme scenario: If funding rates stay negative (e.g., during bear markets), sUSDe not only earns nothing but loses principal. Ethena has an insurance fund to handle this, but if losses exceed the insurance fund’s size, users may bear actual losses.

4.2 Depeg Risk

Yield-bearing stablecoin prices can deviate from $1.

Regular stablecoins (USDT/USDC) have powerful arbitrage mechanisms: when prices fall below $1, arbitrageurs redeem from issuers at $1, profiting from the difference. But yield-bearing stablecoin redemption mechanisms are often more complex with lower liquidity.

Case: In January 2025, Usual’s USD0++ experienced a serious “depeg” event.

USD0++ is essentially a 4-year “bond”—you lock USD0 for yields. Previously, users could redeem 1:1, but Usual suddenly changed rules, setting the redemption floor at $0.87 (because early bond redemption requires a discount).

Market panic ensued. USD0++ price dropped to $0.89, with mass selling on Curve and Pendle. Although it later recovered to around $0.92, this event exposed a problem: many users treated USD0++ as a stablecoin, but it’s actually a bond. Bond prices can naturally trade below par.

4.3 Centralized Exchange Counterparty Risk (Ethena-Specific)

Ethena’s delta-neutral strategy relies on shorting on centralized exchanges (Binance, OKX, Bybit, etc.).

The question: What if an exchange has problems?

Remember FTX? In November 2022, FTX went from the world’s second-largest exchange to bankrupt in days, with user assets misappropriated. If something similar happens to exchanges Ethena uses, Ethena could face massive losses.

Ethena has taken some risk mitigation measures:

But risk can’t be completely eliminated. As long as you rely on centralized exchanges, counterparty risk exists.

4.4 Smart Contract Risk

Yield-bearing stablecoins often involve combining multiple protocol layers:

Every additional protocol layer stacks more risk. Any layer having problems could collapse the entire chain.

In March 2023, Euler Finance was hacked for $197 million. Many strategies built on Euler with other protocols were wiped overnight. This “nesting risk” is especially pronounced in the yield-bearing stablecoin ecosystem.

4.5 Regulatory Uncertainty

The regulatory environment for yield-bearing stablecoins is changing rapidly:

2025 Regulatory Shift

After Trump took office, US regulatory attitudes toward crypto became noticeably friendlier. In April 2025, SEC issued a statement: 1:1 dollar-pegged stablecoins redeemable on demand (like USDC, USDT) are not securities. In July, the US passed the GENIUS Act stablecoin legislation, further clarifying that “payment stablecoins” are not subject to securities law.

But yield-bearing stablecoins remain a gray area

The SEC specifically noted in its statement: “We express no opinion on securities law applicability to yield-bearing stablecoins”. In other words, sUSDe, USD0++, jrUSDe and similar products—because holding them earns yield—may still be classified as securities. Especially high-leverage products like jrUSDe look more like “investment contracts.”

Cross-Border Regulatory Arbitrage

Many yield-bearing stablecoin issuers are registered in Cayman Islands, BVI, etc., using geographic restrictions to avoid US users. But if US users heavily participate, regulators may still take action. This is why Ethena and similar protocols explicitly prohibit US user participation.

Risk Matrix Summary

Risk Type sUSDe USD0++ sUSDS syrupUSDC mHYPER srUSDe jrUSDe
Funding rate risk 🔴 - - - 🟡 🟡 🔴
Depeg risk 🟡 🟢 🟢 🟢 🟡 🟡 🟡
CEX counterparty risk 🔴 - - - 🟡 🔴 🔴
Smart contract risk 🟡 🟢 🟡 🟡 🔴 🔴 🔴
Fund manager risk - - - 🟢 🔴 - -
Regulatory risk 🔴 🟡 🟡 🟡 🔴 🔴 🔴
Overall Risk 🔴 🟢 🟢 🟡 🔴 🟡 🔴

🔴 High Risk · 🟡 Medium Risk · 🟢 Low Risk · - Not Applicable

Remember: Higher yields usually mean higher risks. No exceptions.

Part 5: Practical Advice: How to Choose the Right Yield-Bearing Stablecoin

Theory covered, now for the practical stuff.

5.1 Choose Based on Risk Preference

What type are you? Recommended Expected Yield Core Logic
Conservative USD0++, USDY 4-6% Treasury yields, stable and predictable
Prudent sUSDS, srUSDe, syrupUSDC 5-10% Diversified yield sources or senior priority protection
Balanced sUSDe 8-15% Accept volatility, pursue higher yields
Active management mHYPER, mAPOLLO 8-15% Trust fund managers, pursue excess returns
Aggressive jrUSDe, YT-sUSDe 15-30%+ High risk high reward, potential principal loss

5.2 Capital Size Considerations

Small capital ($1,000-$10,000):

Medium capital ($10,000-$100,000):

Large capital (>$100,000):

5.3 Pendle Operation Guide

If you decide to use Pendle to trade yield-bearing stablecoins:

Step 1: Choose underlying asset and maturity

Pendle offers dozens of yield-bearing stablecoins: sUSDe, USD0++, sUSDS, syrupUSDC, srUSDe, jrUSDe, etc.—basically covering all products mentioned in this article. Each underlying asset has multiple pools with different maturities.

Choosing pools closer to current time (e.g., 3 months) has lower risk but potentially lower yields; choosing distant pools (e.g., 1 year) may offer higher yields but longer lock-up.

Step 2: Decide strategy

Step 3: Important notes

5.4 Risk Management Recommendations

  1. Don’t all-in on a single protocol. Even leaders like sUSDe can have problems. Diversification is the most basic risk management.

  2. Monitor key metrics. If you hold sUSDe, regularly check funding rates. If funding rates stay negative, consider reducing position.

  3. Set mental stop-loss points. Yield-bearing stablecoins can depeg. If price falls below $0.95, can you accept it? Think about your limits in advance.

  4. Understand your yield source. If you can’t explain where the yield comes from in one sentence, you probably shouldn’t invest.

  5. Reserve exit liquidity. Don’t lock all capital in long-term PT. When markets change, you need the ability to adjust.

  6. Take it step by step. Suggest first directly holding sUSDe to experience basic mechanics, then try Pendle PT to lock fixed yields, finally consider high-risk products like jrUSDe or YT.

Part 6: Trend Outlook: The Future of Yield-Bearing Stablecoins

6.1 Traditional Stablecoins Fight Back

Circle and Tether won’t sit idle.

In 2025, signs already indicate traditional stablecoins might start distributing yields to users. If USDC starts offering 2-3% holding yield, yield-bearing stablecoins’ differentiation advantage will shrink.

But this also means: Holding stablecoins is no longer a “zero yield” choice. Whichever approach wins, users benefit.

6.2 Institutional Entry

Yield-bearing stablecoins are attracting attention from traditional financial institutions.

RWA stablecoins (USD0, USDY) are essentially on-chain money market funds, a product form Wall Street knows very well. As regulations clarify, more institutional capital may flow into this space.

BlackRock’s BUIDL fund (tokenized Treasuries) has exceeded $1 billion. This signals traditional finance giants entering on-chain yield markets.

6.3 Yield Tranching Matures

Strata is just the beginning. In the future, more protocols may “slice” various yield assets to satisfy different risk preferences:

DeFi is rebuilding traditional finance’s layered structure, but in a more transparent, more open way.

6.4 Pendle’s Continued Growth

As long as the yield-bearing stablecoin category keeps expanding, Pendle’s position as “interest rate exchange” becomes more solidified.

In 2025, Pendle’s TVL exceeded $4 billion with annual revenue over $40 million. If the yield-bearing stablecoin market doubles to $20 billion, Pendle could become one of DeFi’s most important infrastructure pieces.

Conclusion: Where Yield Comes From, That’s Where Risk Lives

Yield-bearing stablecoins represent DeFi’s transition from “token incentives” to “real yield.”

2020-2021 DeFi yields mostly came from protocol-issued tokens—essentially “printing money.” But yield-bearing stablecoin yields come from staking, funding rates, Treasuries, lending spreads, active strategy management—these are real economic activities.

But high yields always come with high risks. Ethena’s sUSDe can give you 15% annually, but can also lose money if funding rates turn negative. Strata’s jrUSDe can give you 30% annually, but can also wipe you out if underlying assets underperform. Midas’s mHYPER can give you excess returns, but can also underperform passive holding due to strategy mistakes.

This space is evolving rapidly. We covered five core models, but new products emerge weekly. Keep learning, stay vigilant.

Understanding yield sources is the first step in assessing risk.

If you can’t explain where the yield comes from in one sentence, you probably shouldn’t invest.

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