Yield-Bearing Stablecoins Generated Over $250M in 2025 – Ushering in a New Era of Passive Income

The year 2025 marked a turning point for yield-bearing stablecoins, which quietly evolved into one of the most prominent trends in decentralized finance. According to estimates, vaults containing these assets generated over $250 million in passive income over the past year. Investors who had previously speculated on volatile altcoins shifted en masse toward more stable and secure income opportunities.

Yield Vaults Became a Safe Haven as Altcoins Lost Appeal As crypto traders largely exited the altcoin markets, demand for yield-bearing stablecoins soared. Amidst a maturing market and increasing regulation, new DeFi vaults emerged, offering passive returns at varying risk levels. Alongside these products, a new niche of yield curators was born – experts helping users manage risk across protocols.

Paths to Passive Income: Lending, Liquidity Pools, and Tokenized Funds Yield-bearing stablecoins provide multiple avenues for generating yield: 🔹 Liquidity Pools

🔹 Lending Platforms

🔹 Custom Vaults Based on Risk Profiles These strategies now span over 110 blockchain networks, integrating with 495+ DeFi applications and encompassing thousands of individual tokenized assets. The stable-yield market has become incredibly diversified.

Top Ecosystems: Sky, Ethena, Maple Finance, and BUIDL Leading the pack are established protocols like Sky, Ethena, Maple Finance, and the tokenized BUIDL fund. At the same time, many smaller projects offering higher yields – though with higher risk – have entered the scene. Out of a total of $314 billion in stablecoins, yield-oriented tokens represent around $13 billion. Standout assets like sUSDS and USDE by Ethena have endured both bull and bear cycles, proving the robustness of their ecosystems.

Top Five Tokens Dominate, but Smaller Players Offer Bigger Rewards (and Risks) The competition is especially fierce at the top – five major yield-bearing stablecoins dominate total market capitalization. Smaller tokens lure investors with higher returns, but also come with greater risk, and as of 2025, no unified safety standard for DeFi protocols has been established. Still, most yield-bearing stablecoins have survived, with only a few losing their dollar peg. For instance, USDE by Ethena briefly crashed to $0.65 during a liquidation cascade on October 11, and USDX by Stables Labs was flagged for bad loans.

Returns Between 0.1% and 4%, Depending on Risk Level Most algorithmic or asset-backed stablecoins offer yields between 0.1% and 4% annually. Returns depend not only on the protocol but also on the specific vault and its risk strategy. Even conservative assets like USDC can deliver higher returns if allocated effectively. The continued development of the DeFi ecosystem and growing market maturity in 2025 have shown that the panic of 2022 is now in the rearview. Yield-bearing stablecoins now react more dynamically to market conditions, adjusting supply and payouts accordingly.

Stablecoins Poised for Greater Influence in 2026 Stablecoin supply in 2025 ranged between $306 billion and $314 billion, depending on the data source. Turnover was particularly high for Ethereum-based USDT and USDC. In 2026, VC fund a16z expects stablecoins to become a core part of the banking tech stack, as the internet itself begins to adopt banking functions. Current versions of USDT and USDC do not share yield from underlying assets with users, but tokenized bonds and next-generation stablecoins may provide low-risk passive income to retail and institutional holders alike.

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