Are you worried about reduced stablecoin yields on DeFi protocols when the market downturn fuels investors’ risk aversion?

4 min readJul 21, 2021

Get up to a 50% APR by depositing TUSD on Poloniex!
Stablecoins have now become highly sought-after as crypto investors scramble for safe-haven assets amid the current market downturn. However, the influx of stablecoins into well-known DeFi protocols such as Aave, Compound, and Yearn has led to a plunge in their safe-haven APYs to lower than 3%, which, compared with the previous high returns at dozens of percent, are obviously disappointing. In this case, is there any better option that can maintain steady performance in a volatile market while bringing stable and high yields?

Why are stablecoins a safe haven?

As the market grows, stablecoins today are regarded as more a kind of safe-haven assets for exchange trading and barometers for market behavior than just a bridge between exchange trading and over-the-counter trading. Volatility of assets such as Bitcoin during market fluctuations often results in large risk exposures, making fiat-pegged stablecoins the go-to choice to hedge risks. Besides, the biggest advantage of this kind of cryptos is their compliance: stablecoins are run by commercial companies, approved by regulatory authorities, and equipped with legal reserve accounts.

In addition, a stablecoin would also be regularly examined by a dedicated audit institution in terms of whether its circulating supply matches its reserves.

Do high returns always contradict low risks?

When swapping funds for stablecoins to hedge risks, investors are most concerned about how to create a more efficient portfolio to improve their returns. There are three major ways to invest in stablecoins:

1) DeFi lending platforms and mining platforms

Depositing funds into a trustworthy DeFi protocol seems a great choice since stablecoin has become an important infrastructure in the DeFi market. However, the yield rate of stablecoin lending on top Ethereum lending platforms, including Aave and Compound, has been slashed by the onslaught of risk-averse assets, with APY of deposit tumbling to below 3%.

APY of major stablecoins on Aave

How are mining platforms doing now? In response to the market demand for high yields and low risks, most platforms have introduced stablecoin pairs. As of now, the mining yield from providing TUSD/BUSD liquidity on PancakeSwap, a leading BSC platform, is 8.55%, marginally higher than that on lending platforms.

APR of TUSD-BUSD pair in PancakeSwap’s mining pool

2) Traditional asset management platforms like NEXO

NEXO is a world-leading regulated financial institution for digital assets, and NEXO [Earn on Crypto] products promise users an APY of up to 12%. BlockFi also offers crypto holders decent financial income. However, products of this kind require higher levels of regulations and more identification from users.

3) CEX asset management center

For regulatory reasons, the stablecoin-oriented asset management products offered by CEXs which were popular for a while have recently been delisted. Binance Earn, the current asset management product under Binance, requires a subscription prior to investment and only offers an APY on stablecoins of around 1%.

TUSD x Poloniex: Making low-risk and high-return stablecoin investment a reality

The recent asset management campaign jointly launched by the established US trading platform Poloniex and the compliant stablecoin TUSD has garnered huge attention. Participants simply need to hold TUSD on Poloniex to enjoy an APY of up to 50% with easy and fast access. In addition to this, TUSD frees its holders from the concerns plaguing USDT holders. As the world’s most transparent stablecoin that is fully collateralized and independently attested live on-chain, TUSD is now available on more than 70 centralized exchanges including Binance, Huobi, and Poloniex, covering almost all top exchanges and circulating on dozens of DeFi trading and lending platforms. TUSD is audited real-time by Armanino, one of the largest accounting firms in the US, to ensure the 1:1 ratio of USD reserves to circulating token supply and 100% collateral rate. Users can access the publicly available audit results via the official website at any time.

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TUSD is the world’s most trusted stablecoin, fully backed by USD and independently attested live and on-chain, now moving billions of dollars around the world.