Mar 15
A Must-Read Guidance on Stablecoin Asset Management
This article offers an analysis of the status quo of stabelcoin asset management through the lens of DeFi, exchanges, and decentralized wealth management platforms.
DeFi Stablecoin Asset Management
Since DeFi started to take off in the summer of 2020, its growth has brought rounds of benefits. As of now, DeFi, together with NFT and Web3, has become one of the three most important topics in the blockchain space, boasting tremendous value.
Full-fledged, well-established protocols are still the go-to options as they outstrip the emerging new protocols in terms of security and TVL. We have selected four protocols, namely Curve, Aave, Compound, and Yearn.
Let’s first take a look at Curve.
Curve is a DeFi automated market-making project that provides stablecoin swap service. It now supports eight blockchains, including Ethereum, Arbitrum, Avalanche, Fantom, Harmony, Optimism, Polygon, and xDai.
The 3pool on Ethereum supports DAI, USDC, and USDT with an APY of up to 1.18%. The 0.25% basic reward can be boosted and grow by 2.5x to 0.93% through a Boost mechanism.
It is worth mentioning that the Boost mechanism requires users to lock a certain amount of CRV over a specified period of time in return for varying levels of boost according to their lock-up period, while unqualified ones will only receive the minimum reward of 0.37%.
The 2pool on Arbitrum supports USDC and USDT with a 3.97% APY.
The aave on Avalanche supports aDAI, aUSDC and aUSDT with a 6.12% APY.
The 2pool on Fantom supports DAI and USDC with a 2.03% APY.
Harmony, Optimism, xDai, Polygon, and other blockchains that do not offer industry-leading returns on stablecoin investment will not be elaborated on here.
Next, AAVE:
AAVE is a decentralized lending platform that features five markets: V1, V2, AMM, Polygon, and Avalanche.
The deposit APY of most mainstream stablecoins on Aave V1 fluctuates around 1%, which is not an impressive rate.
Aave V2 has an overall market size of $10.63 billion and supports a wide range of stablecoin depositing and lending businesses. The assets with higher returns include USDT, BUSD, USDC, TUSD, and DAI, with an APY of 2.96%, 2.39%，1.94%, 1.77%, and 1.84%, respectively.
USDT enjoys the highest deposit APY (6.44%) on Aave AMM, followed by USDC (1.52%).
Aave currently has $1.566 billion in its Polygon market. USDT, USDC, and DAI are the assets with higher APYs, which stand at 2.91%, 2.06%, and 1.35%, respectively.
Aave’s Avalanche market has a TVL of $5.647 billion. DAI dwarfs all other currencies in APY (3.79%), followed by USDC (3.35%) and USDT (2.96%).
Now, a close-up of Compound. Compound is an established lending protocol and is deployed only on Ethereum. As we can see, the APYs of DAI, USDC, TUSD, and USDT are 2.55%, 1.95%, 1.60%, and 2.97%, respectively.
How about Yearn?
Yearn is a DeFi yield aggregator and has a TVL of $3.47 billion. Through this platform, investors can put their cryptos into a vault, which automatically generates yields for them through a DeFi protocol.
Vaults and Iron Bank are the two yield-bearing products of Yearn. The former is a yield aggregator and the latter a collateral lending product, which are supported by Ethereum, Fantom, Arbitrum, and Avalanche.
Both products are now live on Ethereum and Fantom, whereas Arbitrum only launched Vaults and Avalanche only Iron Bank.
Ethereum-Vaults: LUSD tops the chart with 6.19%, USDC 1.67%, DAI 2.15%, USDT 2.78%, and TUSD 1%.
Ethereum-Iron Bank: USDT records 0.72% and USDC 0.34%.
Fantom-Vaults: USDT comes first with 4.25%, USDC 3.35%, and DAI 2.09%.
Fantom-Iron Bank and Arbitrum-Vaults currently show no data.
Avalanche-Iron Bank: USDT.e takes the first spot with 2.88%, USDC.e 5.62%, and DAI.e 3.00%.
Stablecoin Investment on CEXs
Despite the exponential growth of DeFi in the past two to three years, mainstream financial institutions still seem unshakable with a strong user base and substantial capital. It won’t be replaced, at least for now. That being said, major exchanges such as Binance, Gate.io, and OKX are still worth attention.
Let’s first take a look at Gate.io:
“USDT Test POS and Earn USDT” on Gate.io’s HODL & Earn is exclusive for new users with an APY of 5%. Besides, “Daily HODL & Earn #368 Lock-up ＆ Earn USDT (7 days)” is also in full swing on Gate.io, with an APY of 4%.
Gate.io supports liquidity mining as well, with the DAI/USDT pool’s current APY hitting 3.77%.
In addition, Gate.io supports USDT margin borrowing, where users can lend their USDT at a specific interest rate.
Second, OKX:
OKX plays a vital role in the market as an established cryptocurrency trading platform. The exchange also provides users with stablecoin investment products to earn returns.
The APY of USDT in C2C lending is 3.65%, while that of USDT in OK Piggybank is 1%.
In terms of USDC, the product with the highest yield is a fixed-term loan, which requires a lock-up period of 15 days and offers an APY of 10%.
For TUSD, the product with the most yield is fixed-term loan as well, which requires a lock-up period of 30 days and offers an APY of 23%.
The most profitable DAI product is the DeFi asset management product offered by Compound, with an APY of 3.25%.
The third one is Binance:
As the largest crypto exchange in the world, Binance offers asset management products such as Binance Lending and Liquid Swap. Two-token investment is just like option trading, which is of high risk, and we won’t go into details here.
Binance Lending offers flexible-term and fixed-term loan products for stablecoins. The APY of USDT flexible-term product is 10%, while that of fixed-term product is 6%, with a lock-up period of 30 days. It is quite intriguing that the return of the former product is the higher one.
For USDC and DAI, there are only flexible-term products, with an APY of 1.2% and 2.2%, respectively.
Binance Liquid Swap allows users to earn rewards by committing liquidity to a staking pool.The yield comes from a share of handling fees and the incentives from the platform. USDT/DAI is the highest-yielding product, with an APY of 2.9%.
Crypto Asset Management Platform
In October 2019, Celsius Network, a platform allowing users to earn yields on crypto, announced support for the four new stablecoins issued by stablecoin provider TrustToken. Celsius offers industry-leading interest rates and allocates 80% of its profits to depositors. On top of depositing stablecoin for interests, users can also earn yield by depositing other types of cryptocurrency or staking their crypto assets, and apply for any loans issued in supported stablecoins at an interest rate as low as 3.46%.
Celsius Network now offers 10% APY to ten stablecoins pegged to fiat currencies worldwide, including TUSD, TGBP, TAUD, TCAD, THKD, PAX, DAI USDC, GUSD, and USDT.
Following its Mainnet launch in March 2021, Crypto.com has been focusing its resources on DeFi, NFT, among others, and now boasts a user base of over 10 million. Founded in 2016, it takes on the mass adoption of crypto assets as its mission and has rolled out a number of services, including CRO Visa card, CRO Pay, its trading platform, mobile wallet, DeFi service, deposit for interest, and lending service, etc., developing an extended product line of crypto assets spanning investment and consumption.
In April 2019, Crypto.com announced that it would add TrueUSD (TUSD) to its wallet and app. TUSD is the tenth digital asset supported by Crypto.com, in addition to BTC, ETH, LTC, BNB, XRP, ENJ, BAT, and the platform’s native assets MCO and CRO.
Introduced by the Swiss fintech company Credissimo, Nexo is a centralized crypto-asset lending hub supervised by financial authorities in Europe. In addition, Nexo partners with BitGO, a well-known U.S. trust company, and is audited by Deloitte & Touche, one of the four leading accounting firms in the U.S.
Nexo offers a TUSD APY of up to 10%. (Its loyalty program categorizes users based on their loyalty and the 10% APY is for Platinum customers.) Customers can earn an additional 2% bonus if they opt for rewards in the form of NEXO. In total, they can earn up to 12% on TUSD.
