According to Jinse, stablecoin yields can reach over 10% annually, prompting questions about the sources of such high returns. The article explains that stablecoins can generate returns through multiple channels, including partner referral rewards from issuers like Tether or Circle, interest from centralized and decentralized exchanges, lending and borrowing on-chain, liquidity provision on DEXs, DeFi yield farming, tokenized real-world assets like U.S. treasuries, and CeDeFi arbitrage strategies. These mechanisms allow stablecoins to offer high yields, though risks such as hacking and incentive decay exist. The article notes that while traditional institutions dominate the stablecoin yield space, retail investors can still benefit from the current yield subsidy competition.
Stablecoin Yields Exceed 10% Annually: Where Do High Returns Come From?
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