Yield Stablecoin: The New Darling of the Crypto Assets Market

Stablecoins are becoming a consensus in the Crypto Assets market. Recently, many projects are rapidly transitioning to the interest-bearing stablecoin (YBS) field, such as MakerDAO rebranding to Sky and entering the interest-bearing stablecoin space, while Pendle, Aave, and others are also actively laying out the USDC-PT/YT-USDe ecosystem.

Currently, YBS is still regarded as a type of stablecoin, and the market's understanding of the essential differences between YBS projects like USDe and traditional stablecoins like USDT is not yet clear enough. The YBS project attracts users by providing returns, distributing part of the asset income to users, and continues to earn asset income after completing the fundraising.

Unlike traditional stablecoins like USDT, YBS follows the on-chain banking logic of deposit-lending, deconstructing the power of asset issuance. Circle's creation of USDC requires government-business cooperation and exchange support, but the YBS project has shown explosive growth. The history of development in the Crypto Assets industry is essentially a history of innovation in asset issuance models, but this time it appears more moderate under the name of stability.

Earning stablecoins require both an earning mechanism and a stablecoin mechanism. Earning assets can come from on-chain ( such as staking assets like stETH or off-chain ) such as yield-bearing assets like US Treasury bonds (, and both can be used in combination. The ideal on-chain native earning stablecoin should fully utilize on-chain assets, hedge and distribute profits on-chain, but currently, there are no projects in the market that fully meet this standard.

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According to incomplete statistics, there are currently at least over 90 projects involving interest-bearing stablecoins in the market. However, considering that many projects have not yet launched or lack activity, the truly competitive projects may not exceed 50. Among these projects, in addition to the already dominant Ethena and Sky, there are also some emerging projects worth paying attention to, such as Resolv, Avalon, Falcon, Level, and Noon Capital.

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The challenges faced by yield stablecoin projects mainly include: the sustainability of returns, the impact of the price volatility of the protocol's main token on the stablecoin, and how to balance user returns with protocol profitability. Investors should focus on the protocol's sustainable profitability and profit-sharing ratio when paying attention to these projects.

Overall, interest-bearing stablecoins represent an important innovative direction in the Crypto Assets market. They are neither the same as traditional stablecoins nor can they be equated with speculative tokens. In the future, finding a balance between stability, profitability, and compliance will be the key factor determining the development prospects of this field.