Hello everyone, welcome to my December update to the best places I’ve found to stack stablecoins, all earning yields of at least 13% APY or more. There’s been and overall drawdown in most strategies since I last did my last list in November, and I imagine that the next time I do an update, the landscape will continue to change just as fast as the cryptocurrency market does. There were few changes that caught my attention in the last couple of months in regards to dollar-saving — the recent of a flashloan attack on Overnight.fi’s AVAX chain which exploited 219K worth of USD+ earlier in the month, and a bit of possible FUD with Coinbase asking users to switch their USDT to USDC. I don’t place a whole lot of weight on Coinbase’s decision seeing as how they are partnered with Circle, who runs USDC, but of course, DYOR. (for safety’s sake, you’ll notice that none of these strategies except for Midas involve USDT)

As I have in months past, let me reiterate the criteria that I’ve set out for all of these strategies that are on this list, plus an additional new one:

1. No solely algorithmically-backed stablecoins: I know that there are some great algo-backed stables out there generating some crazy returns, but 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.
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 from staking are all in altcoins, which are too volatile in price, especially in a bear market.
4. Larger TVL: This is a new criteria I’ve added because having done this for several months now, I’ve noticed that there’s simply too much volatility in smaller TVL LP’s. A great example is Autofarm’s TUSD-USDC LP which I wrote about last month— the interest rate went up to a nice 20% APY, but that’s probably only due to the fact that there has been almost a 90% drop in TVL! I’m not saying this is no longer a good stablecoin play, but only that the rates probably won’t last very long and it’s most likely not scalable.

With these factors in play, I will breakdown the following protocols and try my best to identify the pros and cons of each so that you hopefully might be able to make a better decision for where you want to park your stables as you’re waiting this bear market out. In no particular order we have:

Beethoven on Optimism using USDC/DAI: 16.59% APR

This strategy involves using USDC and DAI, where these stables are wrapped up in wUSD+ and wDAI+ utilizing Overnight.fi. If you’re not familiar with USD+, it’s the native stable coin of Overnight.fi, which I'll go into more detail a bit later. The interest that’s accrued is in USD+, which once you claim, will automatically earn rebases via Overnight.fi’s platform at currently 10.7% (last week-to-date) APY. So although this strategy technically doesn’t auto-compound, you’ll still be able to earn stablecoin interest off your claimed rewards.

Pros: If you’re already a fan of Overnight.fi, Beethoven’s strategy gives you a bit of extra added interest, and of course since it’s on Optimism, getting in or out of your position is relatively cheap. In addition the pool has over $1 million in TVL and still generating solid returns, which is normally a very good sign.

Cons: Although the Optimism strategy is fundamentally different than the Avalanche strategy on Overnight.fi, as I mentioned before it is important to note that there was a contract exploit on the Avax chain strategy which you can read more about here.

Beefy on Arbitrum using MIM/USDC: 18.40% APY

This Beefy strategy utilizes $MIM (which is overcollateralized stablecoin) and USDC pool via swapfish.fi. You technically don’t have to go through beefy.finance to take advantage of this strategy and instead can go straight onto swapfish, but just note that if you go through swapfish, instead of auto-compounding your stables, you’ll earn $FISH instead, which as a newer altcoin is subject to increased price volatility:

You’ll notice on the beefy graphic too that the historical returns have been MUCH higher than 18.42% and have been dropping steadily — my guess mostly due to the dramatic increase in TVL for this particular pool. There’s a few considerations that you should take when using Beefy:

1. Beefy provides the historical rate of returns to track volatility. There are some pools that might look great, but the pool itself could just be experiencing a temporary spike in activity.
2. Each pool has a “safety score,” and Beefy will help you breakdown where the APY’s and also outline whether or not the contract(s) are audited.

Pros: Similar to Beethoven’s DAI/USDC pool, this LP is also on a layer-2 which means gas fees to enter and exit are very cheap. In addition, according to Beefy, this pool has a safety score of 9.5 which is pretty awesome.

Cons: The TVL on this pool is more than $300k which isn’t that bad, but given how much this amount has grown in just the last few weeks, I imagine that if it continues on this track, the rates might drop as time goes on.

Midas Investments using DAI/USDC/USDT/BUSD: 13% APY

Out of all the strategies, Midas is the only one I’m listing that is CeFi, which I realize will deter a lot of people because if it’s not your keys, not your crypto. But as far as I’m concerned, Midas has become increasingly transparent offering regular investment reports as well as providing very consistent returns over a long period of time. Surviving now three bear markets, the Midas rates generally tend to change/update month-to-month, but the rates on stables for December they have relatively stayed the same:

To note, if you choose to earn your yields via $MIDAS rather than your stables, you can essentially earn up to 17.1% APY if you hold at least 20% of your portfolio in $MIDAS at the Diamond tier:

Obviously if you don’t want exposure into the $MIDAS token, I wouldn’t care about the Midas Boost, but even without it, 13% ain’t that bad. If you’re interested in learning more about Midas and the $MIDAS token, check out my articles (1, 2, 3, 4).

Pros: Out of all the strategies I’ve listed, Midas has definitely been around the longest and they’ve shown stellar results while at the same time pivoting responsibly through whatever the market condition may be, while having little negative impact on their yield rates.

Cons: Because it’s a CeFi platform, if it’s “not your keys, then it’s not your crypto.” That being said, I’ve scoured through different user reviews and no one over the past 4 years has ever had their funds locked up, and transparency about how they generate their yields has been increased as they are now regularly publishing monthly investment reports.

Sturdy.finance on Ethereum Mainnet using USDC: 12.85% APY

Last but not least we have the USDC pool on Study.finance, which if you’re not familiar, considers themselves as the “the first positive-sum lending protocol.” Sturdy has popped up on my radar in the past, but to be honest I’ve largely disregarded it because of it being on Ethereum Mainnet (#gasfeessuck).

That being said, it’s hard to ignore the historical returns that they’ve offered depositors for many of the major stables:

That and the crazy growth in TVL:

Pros: Looking at the historical returns on Sturdy’s lending vaults, it’s pretty amazing to see how consistent their returns are despite the market going through several crashes. And given the fact that we’re nearing the depths of our bear market, I would only expect Sturdy to gain more TVL, transactions, users, and subsequent increase in interest rates when we come out the other side.

Cons: As I mentioned before, the gas fees on mainnet can be pretty brutal, and if you’re considering borrowing and lending, make sure you know your liquidation risks before playing with fire.

Honorable Mentions: Liquity on Ethereum Mainnet using Chickenbonds and bLUSD: 27.12% APY

I’ve written multiple articles about Liquity and their Chickenbonds in the past, and given some of the impressive returns that are now being published on DeFiLlama, it’s a very lucrative stablecoin play that can’t be ignored:

I consider the Chickenbonds an “honorable mention” because although there’s technically no lock-up, if you decide to “Chicken out” before the Chickenbond’s maturity period, even though your initial capital is protected, you will lose your accrued bLUSD. A Chickenbond’s $bLUSD accrual rate is variable and a bit hard to calculate, because it changes depending on how long you wait:

As you can tell from the graphic above, the yield is relatively much higher at first but will decrease significantly as it reaches the $bLUSD cap. If you’re wanting to read further about Liquity, I highly recommend that you check out my previous articles on Liquity borrowing/liquidation mechanisms (1, 2, 3, 4) or if you’re interested in learning more about the Chicken Bonds, I highly recommend you checkout their website https://www.chickenbonds.org, especially their deep-dive article about the NFTs themselves and all their different attributes.

Pros: With a TVL of $55.73 million and climbing, it appears that the Liquity really has cracked the code here, creating a gamified way to earn high returns off of your stables.

Cons: Similar to Sturdy.finance, Liquity has been built on top of Ethereum Mainnet which means the gas fees may take a significant chunk out of your profits.

Conclusion

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 out there.

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.

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!