Editorial Notes (vol. 30) – Earn with stablecoins in DeFi
With markets looking grim, many are looking for shelter from the storm. One way to do so is by sticking to stablecoins and waiting for opportunities to arise. Luckily, the DeFi ecosystem offers endless possibilities to earn yield with stablecoins.
There is no need for you to keep the tokens in your wallet doing nothing. While they sit idly, you could be taking advantage of a plethora of projects that are building lending products, yield vaults to take advantage of various strategies, saving protocols like PoolTogether, and more.
If you are not sure where to start, this page might be a good reference to familiarize yourself with what is out there. Additionally, you can check out our in-app explore screen, where you’ll find all the major projects in DeFi no matter the chain, and access earning opportunities like Yearn yield vaults and AAVE lending without even having to leave your Omni wallet.
Now let’s check out some of the places where you can put your stables to work!
Earn on your deposits and borrow with AAVE.
Aave is a decentralized non-custodial liquidity market protocol where users can participate as depositors or borrowers. Depositors provide liquidity to the market to earn a passive income, while borrowers are able to borrow in an overcollateralized or undercollateralized (one-block liquidity) way.
Omni has recently integrated AAVE V3 into the wallet, allowing you to generate yield across all EVM-compatible chains in just a few taps, without having to leave the wallet.
Access higher yields with Maple by providing liquidity for undercollateralized loans.
Maple is a decentralized corporate credit market. It provides capital to institutional borrowers through globally accessible fixed-income yield opportunities. It allows funds to leverage their reputation to take undercollateralized loans without a constant fear of liquidation and margin calls while allowing the liquidity providers to access higher yields on their loaned assets to offset the risk.
Quickly access fixed interest rate loans or lend assets to get a reliably high yield on Notional.
Notional allows users to get fixed interest rate loans or to lend assets at a fixed interest. It offers several loan maturities from a period of one month to up to a year. For example, a 1-month $USDC deposit currently earns you almost 4% APY. This makes Notional one of the best platforms to get a reliably high yield.
Access the uncollateralized lending market on Goldfinch to earn high yields.
Goldfinch is a decentralized, accessible credit protocol, with a mission to bring the world’s credit activity on-chain while expanding access to capital and fostering financial inclusion. The protocol makes crypto loans without requiring crypto collateral by incorporating the principle of trust through consensus – a way for borrowers to show creditworthiness based on the collective assessment of other participants.
By utilizing the “Senior Pool” you get access to automatically diversified yields across all borrowers. You are able to supply only USDC and are able to earn an estimated 13% APY.
Yearn uses automated strategies to help maximize yield for users.
Yearn is a DeFi vault and yield aggregator that helps users generate the highest yield farming profits by providing easy access to complex strategies. When you deposit assets into Yearn products, you gain access to the best automated strategies for swapping funds between DeFi protocols.
Yearn further optimizes token lending by algorithmically finding the most profitable lending services and the highest yields, making farming accessible to the masses and giving new users access to advanced strategies. Essentially, Yearn vaults (which Omni has natively integrated) can best be described as actively managed mutual funds where the investment strategies are performed by Yearn's self-executing code.
Access sustainable yield using Ribbon’s structured products.
Ribbon uses financial engineering to create structured products that deliver sustainable yield. Ribbon's first product focuses on yield through automated options strategies. The protocol also allows developers to create arbitrary structured products by combining various DeFi derivatives. They have recently released two new products – Ribbon Earn and Ribbon Lend. The former offers users competitive yields by participating in delta-neutral strategies, while the Lend product allows users to lend USDC to institutional borrowers in order to earn up to 9% APY.
Save with PoolTogether and win prizes.
PoolTogether is a decentralized and open-source blockchain-based prize savings account. Replicating "no loss lotteries" and "prize savings accounts", all depositors are offered a chance to win prizes without needing to risk their deposited funds. This is possible because prizes are made up of the interest that accrues on all deposited funds.
Earn when others get liquidated with B.Protocol.
B.Protocol and its novel Backstop AMM (B.AMM) automate the rebalancing of integrated Stability Pools in order to maintain their strength – essentially, it democratizes access to liquidation systems and shifts MEV and bot profits to the protocol’s users.
One of the integrated protocols is Liquity. By using B.Protocol to deposit your LUSD (Liquity’s stablecoin) into Liquity Stability Pool, you can save the manual operation of selling your accumulated ETH back to LUSD every time a liquidation is taking place.
Maximize Convex APYs and earn yield in the best DeFi tokens with Concentrator.
Concentrator is a yield enhancer that boosts yields on Convex vaults. Users deposit Curve LP tokens, which are automatically staked in Convex vaults – if you don’t have an LP token, Concentrator allows you to zap into any position with select tokens. Rewards are periodically harvested, swapped to cvxCRV, and deposited in the Concentrator vault. The Concentrator vault stakes deposited cvxCRV on Convex, then auto-compounds the resulting rewards back to more cvxCRV.
You can find multiple opportunities with varying yields depending on which stablecoin you wish to utilize.
Homora V2 – a protocol for leveraging your position in yield farming and liquidity-providing pools.
A protocol for leveraging your position in yield farming and liquidity providing pools. In V2, lenders can earn a high lending interest rate on multiple assets. Yield farmers can get even higher farming APY and liquidity providers can get higher trading fees APY from taking on leveraged yield farming/liquidity providing positions.
Bet against all traders on the Pika Protocol by depositing USDC into their Liquidity Vault.
On Pika, you can trade multiple tokens with up to 50x leverage and very deep liquidity — the expected slippage for a $10k ETH-USD trade is 0.02%. The protocol is backed by liquidity providers and if you want to bet against all traders on the platform, you could supply USDC to their vault. The vault pays for trader profits and receives trader losses. When traders lose, the vault wins. The current APR is around 10%, which also includes OP token rewards.
What are stablecoins?
A stablecoin is a digital currency that is pegged to a “stable” asset such as the U.S. dollar. Stablecoins are designed to reduce volatility relative to unpegged cryptocurrencies like Bitcoin, Ether, and others. Some of the main stablecoins include USDT, USDC, DAI, and BUSD.
Can stablecoins depeg?
Yes, stablecoins can be depegged from the asset they are representing. An example is the depegging of Terra USD in the middle of 2022 which was an algorithmic stablecoin.