Yield Stablecoin: A New Round of Innovation in Cryptocurrency Issuance

Stablecoins are gradually becoming a market consensus. From the early fiat-backed stablecoins, to over-collateralized on-chain stablecoins, and now to interest-bearing stablecoins (YBS), the development history of stablecoins reflects the continuous innovation in the asset issuance model of the encryption industry.

Yield-bearing stablecoins combine yield mechanisms and stablecoin mechanisms to attract users by distributing part of the asset income. Compared to traditional stablecoins, YBS follows the on-chain banking logic of deposit-lending, deconstructing the power of asset issuance. Currently, there are nearly a hundred projects involving yield-bearing stablecoins in the market, but truly promising ones will not exceed five.

The core of the yield stablecoin project lies in its sustainable profitability and yield distribution mechanism. A complete yield stablecoin protocol typically includes stablecoins and their staking versions, as well as the protocol's main tokens and their staking versions. Currently, the revenue sources of mainstream projects include lending interest, trading fees, etc., and the yield is primarily distributed to users through the staking of stablecoins.

It is worth noting that interest-bearing stablecoin projects face some challenges: first, the durability of returns is questionable, and some projects may sacrifice profits to attract users; second, the price volatility of the protocol's main token may negatively impact the liquidity of the stablecoin, leading to a death spiral similar to UST. Therefore, it is crucial to pay attention to the ongoing profitability of the protocol.

Overall, interest-bearing stablecoins represent a new round of asset issuance innovation in the cryptocurrency sector. Although there are still some issues at present, they combine the advantages of traditional finance and encryption technology, with enormous potential for future development. Investors and users need to fully understand the mechanisms and risks of each project and participate cautiously in this emerging field.