Stablecoins play a crucial role in decentralized finance (DeFi), providing a way to earn yield without the wild price swings of traditional cryptocurrencies. But behind the numbers, not all yields are created equal. Some protocols generate sustainable returns through lending, trading fees, or other real revenue sources. Others inflate their APYs by rewarding users with their own tokens—often called "incentive rewards"—which can be highly risky.
To understand why some stablecoin yields seem extremely high, it’s important to break down the different ways these returns are generated:
- Lending and Borrowing Markets – Platforms like Morpho Blue and Venus offer yield by lending stablecoins to borrowers. The more demand for borrowing, the higher the interest rates (and APYs) for lenders. These returns are generally more sustainable, as they come from real borrowing activity.
- Liquidity Provision and Trading Fees – DEXs (decentralized exchanges) and AMMs (automated market makers) like Curve allow users to provide liquidity in stablecoin pools. In return, they earn a share of the trading fees. These yields depend on trading volume—when volume is high, returns are stronger.
- Yield Tokenization – Some platforms, like Pendle, let users trade the future value of yield-bearing assets. This can be lucrative but adds a layer of complexity and market speculation.
- Protocol Incentives (Risky Yield) – Some projects mix in their own native tokens as rewards to boost APYs. While this can look attractive in the short term, these "bonus" tokens often lose value over time, reducing real returns. A 50% APY might sound great, but if half of that comes from an unstable token that crashes in price, your actual earnings can shrink quickly.
In this report, we at Brava have analyzed the top 10 on-chain stablecoin yield pools as of March 2025. We’ll break down their APYs, how they generate returns, and what risks users should consider before chasing high yields.
The Top 10 on-chain stablecoin yields of March 2025
1. Morpho Blue – USUALUSDC+ (30.37% APY, $217M TVL)
Chain: Ethereum
Morpho Blue is an enhanced lending protocol that optimizes capital efficiency by integrating with existing DeFi markets. The USUALUSDC+ pool benefits from efficient peer-to-peer lending mechanisms, driving its high APY. However, the sustainability of such high rates depends on borrowing demand and liquidity incentives.
2. Indigo – IUSD (29.43% APY, $39M TVL)
Chain: Cardano
Indigo is a synthetic asset protocol on Cardano, offering stablecoin yield through IUSD. The high yield is partly driven by protocol incentives and trading fees, but given Cardano’s smaller DeFi ecosystem, liquidity constraints should be considered.
3. Morpho Blue – HUSDC (29.03% APY, $52M TVL)
Chain: Ethereum
Another Morpho Blue pool, HUSDC, provides similarly high yields by leveraging enhanced lending strategies. While the APY is attractive, users should monitor utilization rates and interest rate fluctuations.
4. Morpho Blue – REUSDC (22.74% APY, $31M TVL)
Chain: Ethereum
REUSDC follows the same Morpho Blue model but has a slightly lower APY, likely due to differences in borrowing demand. Users should evaluate whether these rates are maintained over time or if they decline as lending markets adjust.
5. Curve DEX – IDAI-IUSDC-IUS (16.34% APY, $13M TVL)
Chain: Ethereum
Curve remains a leading stablecoin DEX, and this specific pool benefits from trading fees and CRV token rewards. While Curve is a trusted protocol, users should be aware that part of the yield may come from token emissions, which can fluctuate.
6. Pendle – LVLUSD (16.27% APY, $9.9M TVL)
Chain: Ethereum
Pendle Finance specializes in yield tokenization, allowing users to lock in fixed or variable rates. LVLUSD offers competitive yields, but the reliance on tokenized yield instruments introduces an additional complexity layer.
7. Pendle – ASUSDF (14.92% APY, $17.7M TVL)
Chain: BSC
Pendle’s presence on Binance Smart Chain (BSC) expands its user base, though yields on BSC often come with higher smart contract risks. The ASUSDF pool likely benefits from a combination of yield tokenization and trading incentives.
8. Pendle – USDE (14.56% APY, $29.7M TVL)
Chain: Ethereum
USDE is another stablecoin yield option on Pendle, offering a more moderate yield compared to the top pools. Users should assess the risks tied to the underlying assets generating yield.
9. Convex Finance – DOLA-SUSDE (14.04% APY, $11.2M TVL)
Chain: Ethereum
Convex boosts rewards for Curve LP providers, and this pool likely benefits from CRV and CVX emissions. While the APY is strong, part of it comes from governance token rewards, which can be volatile.
10. Venus Core Pool – USDC (13.06% APY, $16.8M TVL)
Chain: BSC
Venus is a lending protocol on BSC, and the USDC pool offers moderate stablecoin yields. However, as seen in past market cycles, lending yields can drop significantly when borrowing demand declines.
Final Thoughts
Stablecoin yields in DeFi remain attractive, but users must carefully analyze their sources. Pools with excessive token emissions may offer high short-term APYs but can quickly decline in value. Sustainable stablecoin yields typically come from lending markets, trading fees, and real yield mechanisms. As the DeFi landscape evolves, diversifying across trusted protocols with strong risk management is key to long-term stability.
About Brava
Brava is an automated stablecoin yield management platform designed to simplify access to yield opportunities in decentralized finance (DeFi). By leveraging risk-adjusted strategies and automation, Brava empowers users to optimize their yield strategies while maintaining full control of their assets.
Disclaimer: Brava does not provide financial advice or guarantee investment performance. Users should assess their own financial circumstances and risk tolerance before using the platform. Brava operates in compliance with applicable regulations and does not manage or hold client funds. Users remain in control of their assets at all times.
