Hi folks, its been a great start to 2023 with a huge pump in the overall crypto market, and in turn, there’s been a pretty significant pump in stablecoin yields as well. Rates were even higher in mid-January, especially in the Optimism ecosystem, but they’ve flattened out a bit since then, albeit still relatively high.

It must still be building season because half of these strategies are relatively new, and it will be exciting to see what else is in store as we go forward in 2023. As usual, I’m including the usual set of criteria I’ve laid out for my list, which include:

1. No algo-backed stablecoins: After the Terra death spiral, it will be some time before I trust anything that’s linked algorithmically again.
2. No lock-up periods: If you’re looking into earning into the 20%+ APY range, I highly recommend that you check out my previous articles on platforms such as Haru Invest where you can earn significantly more if you agree to lock-up your funds for 30+ days, but a word for the wise — there’s no such thing as a free lunch.
3. The protocol pays out in the native asset (stablecoins, not in alts): I know there’s some great returns that can be had with platforms like echnida or platypus finance, but the rewards are all in altcoins, which may have high volatility especially in a bear market.
4. And lastly, No CeFi platforms/exchanges: The general consensus is that DeFi platforms are safer because you have control over your crypto, but please remember that DeFi protocols might still be subject to smart contract hacks/exploitations

Pain.finance on Fantom — 18.5% APY using $DAI

If you’ve read my previous post on $OATH you’ll know that I’m a big fan of the Byte Masons team, and their multi-strategy crypt on Pain.finance is no exception. And this is a bit short notice, but if you have at least $50 or more in any of the multi-strategies on Pain.finance, they’re taking a snapshot on February 1st, giving away 5 users $100 worth of $OATH.

Pros: Fantom offers very cheap gas fees, and the multi-strategy vaults have been audited which you can read here.

Cons: Perhaps the most significant downside to this strategy is that there is a deposit cap — only a total of 10,000 $DAI can be deposited and to-date, there’s already almost 7000 $DAI already in there. Therefore, this strategy won’t be highly scalable.

Reaper.farm on Optimism — 16.88% APY using $sUSD

Once again, this is another strategy from the Byte Masons, but this time using a strategy utilizing sonne.finance. If you’re unfamiliar with $sUSD, it’s a native stablecoin of the Synthetix ecosystem that’s overcollateralized by $SNX. Typically $sUSD is backed by 3–4 times the value worth in $SNX.

Pros: I’m a huge fan of the Optimism ecosystem, for it has the security of Ethereum with super cheap gas fees.

Cons: I think the main downside here is that $sUSD is backed by $SNX, as opposed to something that I’d have more faith in (for instance $DAI, which is backed by a host of different things including USDC/ETH/BTC).

Beefy.finance on BSC — 17.74% APY using $HAY/USD+

Once again we have another Beefy vault on the list, but this one employs a relatively new token pair including $HAY and $USD+. You might recognize USD+, as I’ve written an article in the past about how I was a victim in a smart contract exploit, but that was on the Avalanche chain (now deprecated), and this particular strategy is on BSC. The $HAY token I’ve only recently heard about a few weeks ago, but to my understanding it’s the native stablecoin to Helio.money, a platform similar to Liquity, where you can mint $HAY by putting up $BNB or $BUSD up as collateral.

Beefy builds this vault on top of another recently launched protocol, Thena.fi, but in typical Beefy fashion, utilizing the Beefy Vault instead of the one directly on Thena.fi allows the depositor to single exposure to only stablecoins, as opposed to Thena.fi’s native token $THE.

Pros: The liquidity locked up in this strategy is pretty large, coming in around $3.44 million total staked. On an added note if you’re bullish on the Thena ecosystem, you could utilize the strategy directly on Thena.fi at a slightly higher APR of 18.25%

Cons: As you can see in the graphic above, the APR on this vault used to be around 27%, but just in the past week has melted down to its current 17% range. I would imagine like the other major stablecoin LP’s on Thena.fi, that if the pool grows another million or so, you’ll most likely see it go down to around the 13% range.

Autofarm on Cronos — 20.62% APY using $TUSD/USDC

I’ve brought up this same pool a few months back, but since then, the APY’s have gotten even better, and the returns have been hovering in the 20% range all the way back since late November last year. If you’re unfamiliar with $TUSD, it’s the native stablecoin of the TrueFi platform, which is a no-lockup lending platform.

Pros: If you’re a Cronos maxi, I don’t think there’s anywhere else that you can get solid returns on your stablecoins. Also gas fees are relatively cheap, and the base rate itself is 20.52%, meaning if there’s increased trading activity, this rate could easily go higher.

Cons: As I’ve noted in the past, last October there was a defaulted Truefi loan by Blockwater of $3.4 million $BUSD which may have raised some alarms, but it appears that TrueFi was able to create a manageable payment plan with Blockwater in order to weather the storm.

Conclusion

Despite all the building that’s taking place, I still remain a bit skeptical about this recent pump and I imagine that we still have at least another leg of this bear market to ride out. But with all that being said, I’m still greatly excited for all the new opportunities popping up for stablecoins in the crypto-landscape, and I can only imagine how this list might change in the future.

Hopefully you’ve discovered a new protocol to capitalize off of and if you’ve heard of any others that aren’t listed here, please drop me a comment below because I’d love to check it out. If you’re interested in digging for more stablecoin opportunities with disregard to my low risk parameters (no algos, no lock-ups, no altcoins) I’d recommend checking out stable.fish — a great compiled list of any LP involving any stablecoin out there. They don’t have their stats updated in real time, but it will give you a really good picture of what’s possible.

And as always, thanks for taking the time to read this and be sure to follow me on twitter (https://twitter.com/CryptosWith) to get all my latest updates. Also, looking for a gift for your Crypto-loving/hating friend? Give them a REKT journal to cheer them up!

Disclaimer: And as a final reminder, this is not financial advice and this is for educational and entertainment purposes only. Please as always, do your own research and find what investments are best for you. Cheers everyone!