Latest Trends in Stablecoin Investment Strategies

The current US dollar index is operating at a high level, and risk assets are performing poorly, making it a wise choice to hold dollar-denominated assets. It is worth noting that top DeFi projects are actively seeking ways to generate returns from idle dollar assets. Recently, MakerDAO's MIP 81 proposal was approved, which will transfer up to $1.6 billion of USDC to a certain custodial service to achieve an annualized yield of 1.5%. This article will introduce the latest developments in several stablecoin investment strategies.

USDD+3Crv Strategy

USDD is a stablecoin managed by the reserve institution of a certain blockchain ecosystem. As of October 27, the issuance of USDD is 725 million, with collateral valued at 2.23 billion USD and a collateralization ratio of over 300%. Among them, the amount of USDC collateral reaches 990 million, far exceeding the issuance of USDD, indicating a lower risk coefficient. Recently, a certain trading platform delisted HUSD while listing multiple USDD trading pairs and waived the transaction fees for the related trading pairs, which has positively contributed to the development of USDD.

A certain DEX platform shows that the APR for the USDD+3Crv pool is 19.66%, while the APR for USDD+FRAXBP is 21.18%. The former includes four stablecoins: USDD, DAI, USDT, and USDC, while the latter includes three stablecoins: USDD, FRAX, and USDC. Investors can first deposit supported stablecoins into the relevant pools and then stake the LP tokens on the platform to earn rewards.

In the ecosystem of USDD issuers, the use of USDD is more widespread. For example, the APY for the USDD-USDT trading pair on a certain DeFi platform can reach as high as 41.9% (requiring the locking and staking of platform tokens), while the deposit APY for USDD on another lending platform is 9.52%.

Canto: USDT+NOTE Strategy

Canto is an EVM-compatible DeFi public chain in the Cosmos ecosystem, featuring DEX, lending, and stablecoin NOTE functions. Currently, Canto's total locked value is approximately 100 million USD.

Canto's lending platform shows an APR of 32.14% for NOTE/USDT LP and 29.47% for NOTE/USDC LP. NOTE is a stablecoin minted through over-collateralization in Canto, and there will be no liquidation when the collateral is USDC and USDT. Currently, the price of NOTE is $1.04, and it is recommended to use a portion of USDT to mint NOTE, then provide liquidity with NOTE and the remaining USDT, and finally stake the LP tokens on the lending platform.

It is important to note that Canto's cross-chain operations are relatively complex, and investors need to assess carefully.

Velodrome: sUSD+LUSD Strategy

Velodrome is a DEX on Optimism, currently with a TVL of $82 million, surpassing the scale of some well-known DEXs on the network. sUSD and LUSD are two relatively secure stablecoin projects. Currently, the APR for liquidity mining on the sUSD/LUSD trading pair in Velodrome is 16.12%.

Helio: HAY+BUSD Strategy

Helio Protocol is a liquidity staking and lending protocol on a certain public chain. Users can over-collateralize to borrow the decentralized stablecoin HAY within Helio, while the staked tokens will be used for liquidity staking. Currently, Helio's TVL is $92 million, with approximately $20 million staked in a certain DEX HAY/BUSD Stable LP.

Investors can provide liquidity for the HAY/BUSD stablecoin trading pair in a certain DEX, and then stake the LP tokens in Helio. Currently, the APR for HAY/BUSD Stable LP is 19.77%.

Wombat Exchange Ecosystem: Multi-Coin Strategy

Wombat Exchange is a stablecoin exchange DEX on a certain public blockchain, featuring low slippage, shared liquidity, and the ability to stake using a single token, among other characteristics. The transaction fee ratio for stablecoin trading is only 0.01%. This project has received investment support from several well-known institutions.

Currently, the Main Pool of Wombat shows that the median APR for USDC, USDT, DAI, and BUSD are 11.44%, 11.14%, 10.85%, and 7.57%, respectively, including the acceleration of locked WOM and holding veWOM. If there is no locked WOM, the returns will be lower.

Similar applications around Wombat have also emerged, such as Wombex Finance and Magpie. These platforms offer users higher yield options.

It is important to note that the overall risk of the cryptocurrency market is higher than that of traditional financial markets, with frequent security incidents. Investors should diversify their risks and thoroughly understand the specific risk points before investing, conducting their own research.