Tariff policies and the Fed's stance cause market turbulence, stablecoin yields become a safe haven

In April 2025, the global financial markets experienced significant fluctuations due to new tariff policies. On April 2, a "reciprocal tariff" policy was introduced targeting major trading partners, establishing a baseline tariff of 10% and imposing higher rates on certain countries. On April 5, the 10% baseline tariff officially took effect, exacerbating tensions in global supply chains. On April 9, high tariffs were suspended for 90 days for 75 countries that had not implemented retaliatory measures, but tariffs on China were further increased to 145%. The European Union announced the suspension of retaliatory tariffs on 21 billion euros of U.S. goods until July 14, seeking room for negotiation.

These policies have triggered a strong reaction in the market. The S&P 500 lost $5.8 trillion in market value within four days of the tariff announcement, marking the largest single-week loss since the 1950s. Bitcoin prices oscillated between $80,000 and $90,000. On April 17, the Fed chairman stated that tariffs could push up inflation and suppress growth, but the Fed would not intervene in the market by cutting interest rates, focusing instead on long-term data. Some large financial institutions have raised the probability of a recession in the U.S. to 20% and 45%, respectively.

In this market environment, how should investors respond? Low-risk stablecoin yield products in the DeFi space may be a good option, offering relatively stable returns during turbulent times. Below are four yield products based on stablecoins.

Spark Saving USDC (Ethereum)

Users can deposit USDC through the Spark platform to participate in the Savings USDC product. The earnings primarily come from the Sky Savings Rate (SSR), supported by income generated from cryptocurrency collateral loan fees, U.S. Treasury investments, and providing liquidity to DeFi platforms. USDC is exchanged for USDS at a 1:1 ratio through the Sky PSM and deposited into the SSR vault to earn returns, with the value of sUSDC tokens increasing as returns accumulate.

Risk Assessment: Low. USDC's stability is high, and multiple audits reduce the risk of smart contracts. However, attention should be paid to the potential impact of market volatility on liquidity.

Berachain BYUSD|HONEY (Berachain)

Users can provide liquidity for the BYUSD/HONEY liquidity pool on Berachain's native DEX. Earnings mainly come from BGT rewards (3.41% APR) and trading fees within the pool (0.01% APR). BGT is Berachain's non-transferable governance token, which can be burned 1:1 for BERA and share the revenue from core dApp fees.

Risk assessment: Low to moderate. BYUSD and HONEY are stablecoins with relatively stable prices. However, BGT rewards may fluctuate due to emission adjustments.

Provide Liquidity to Uniswap V4 USDC-USDT0 (Uniswap V4)

Users can provide liquidity to the USDC/USDT pool of Uniswap V4 through the Merkl platform. Uniswap V4 introduces a "hook" mechanism that allows developers to customize pool features, such as dynamic fee adjustments and automatic rebalancing, enhancing capital efficiency and yield potential.

Source of income: UNI token incentives.

Risk Assessment: Low to Moderate. The USDC/USDT pool is a stablecoin pair, with lower price volatility risk, but be aware of smart contract risks and the potential decrease in returns after the incentive period ends.

Echelon Market USDC (Aptos)

Users can deposit USDC into the liquidity pool of the Aptos mainnet through the Echelon Market platform to participate in supply. The earnings include USDC supply interest (5.35%) and Thala's thAPT rewards (3.66%). thAPT is Thala's deposit certificate, minted and redeemable for APT at a 1:1 ratio.

Risk Assessment: Low to Medium. The stability of USDC is high, but attention should be paid to the smart contract risks in the Aptos ecosystem and the impact of thAPT redemption fees on returns.

Summary

In the current turbulent market environment, these DeFi yield products based on stablecoins may provide a relatively safe option for investors. However, investors still need to carefully assess the risks and returns of each product and make informed investment decisions based on their own circumstances.