The rapid growth of stablecoins is pushing investors to explore new ways to generate onchain cash flow. As real world assets (RWAs) continue to move into decentralized finance (DeFi), three categories dominate capital inflows: U.S. Treasuries, commodities, and private credit.
Investors are increasingly leveraging lower yield instruments such as U.S. Treasury tokens earning roughly 3.5% APR, gold backed tokens, and allocating the borrowed capital into onchain private credit markets, where yields typically range from 5% to 10%. More risk tolerant strategies now offer returns exceeding 10% APR, and when combined with leverage and looping strategies, total yields can approach 30% APY.
Below, we break down several stablecoin yield strategies, ordered from passive to active management, detailing where the yield comes from and the associated risk profiles.
Lending to Market Makers via Onchain Private Credit
Private credit has emerged as one of the fastest-growing RWA sectors in DeFi. Among decentralized platforms, Wildcat stands out as one of the few fully permissionless protocols allowing borrowers to bring bespoke credit deals onchain.
One notable example is an open-term USDC lending market for Wintermute, a leading crypto market maker. On Ethereum mainnet, lenders earn a fixed 10% APR on USDC. The structure resembles traditional private credit: fixed-rate returns in exchange for counterparty risk, but with transparent onchain settlement.
This strategy suits investors seeking predictable yield with limited active management, though it carries borrower and protocol risk.
Depositing USD Stablecoins into Beefy Vaults
For investors looking for higher yields with minimal hands-on management, Beefy Finance remains one of DeFi’s most established auto-compounding platforms. As of today, high-yield USD stablecoin vaults on Beefy offer APYs ranging from 10% to 22%, depending on the underlying strategy and protocol. Investors should assess the underlying stablecoin risk, smart contract exposure, and incentive sustainability before selecting a vault that aligns with their risk tolerance.
Locking in Fixed Yield via Pendle
Pendle enables investors to separate yield-bearing assets into principal tokens (PTs) and yield tokens (YTs), creating fixed-income opportunities onchain.
One notable asset is USDai, a stablecoin funding the expansion of AI data centers by issuing loans backed by high-end GPUs. Interest generated from these loans is distributed to sUSDai holders.
- Current floating APY: 7.4%
- Expected APY: 10.67%
- Fixed yield via Pendle:
13% APY at February 18, 2026 maturity on Arbitrum
11% APY at March 18, 2026 maturity on Plasma
Pendle’s market allows traders to speculate on future yield, while fixed-income investors can lock in predictable returns—mirroring traditional bond markets in a decentralized format.
Leveraging Pendle PTs for Enhanced Returns
More sophisticated investors can amplify returns by leveraging Pendle PTs. PTs can be used as collateral to borrow stablecoins, which are then reinvested, a strategy commonly referred to as looping. Using money markets such as Morpho, experienced users can push effective yields as high as 30%–40% APY. However, this approach introduces liquidation risk, smart contract exposure, and requires active monitoring. There is currently no one-click solution to maximize leverage, meaning execution is largely manual unless supported by custom tooling or developer resources.
How to Find High Yield Stablecoin Opportunities
The strategies above demonstrate how stablecoin yields can scale from 10% with passive management to 30% or more with active, leveraged strategies. My research process begins by defining a minimum acceptable yield. With most passive USD stablecoin strategies in DeFi now averaging 2%–6%, I set a 10% yield threshold to justify additional risk.
From there, I rely on several core research tools:
- Beefy Finance for yield aggregation
- DeFiLlama for protocol analytics and TVL data
- RWA.xyz for tracking real-world asset adoption onchain
As stablecoins and RWAs continue to converge, onchain fixed income is evolving rapidly offering investors a growing spectrum of yield, risk, and liquidity profiles previously unavailable outside traditional finance.
