New Investment Choice: On-chain Stablecoin Investment Returns Up to 5%

In recent years, the yields of traditional financial products have continued to decline, and many investors have found that the interest from bank deposits and money market funds cannot even keep up with inflation. Against this backdrop, a new investment method has begun to attract attention—on-chain wealth management based on stablecoins.

A stablecoin is a digital asset linked to a fiat currency, characterized by price stability. Stablecoin wealth management refers to the practice of lending, staking, or investing idle stablecoins on blockchain networks or platforms to obtain annualized returns. This method is similar to banks using deposits for lending, but in the blockchain world, the distribution of profits is more transparent and equitable.

Currently, the annualized interest rates for USDT/USDC in mainstream decentralized finance lending protocols are mostly between 2.5% and 4%. Some platforms might offer total annualized returns exceeding 8% through additional incentive mechanisms, but this usually comes with higher volatility and lock-up requirements. In contrast, fixed income products, although not offering the highest yields, are overall stable and show an upward trend, reaching up to about 5%. These products have become the preferred choice for many users due to their stability and lower entry thresholds.

The convenience of operating stablecoin financial products is constantly improving. Users only need to hold stablecoins to easily choose platforms and products, with one-click subscription. Some platforms even support on-demand deposits and withdrawals, with daily interest calculations, offering the convenience of money market funds while achieving returns close to U.S. Treasury bonds; it combines the stability of fixed deposits without the penalty for early redemption.

Compared to traditional fixed-income products, stablecoin wealth management not only has an advantage in yield but also offers greater flexibility and transparency. Most products support deposits and withdrawals at any time, accrue interest daily, and have no lock-up period, truly achieving "no idle funds." At the same time, many platforms publicly disclose sources of returns, risk descriptions, and fund flows; some even validate fund security through real-time on-chain data. More importantly, this model allows users to obtain a fairer distribution of returns, reflecting the concept of blockchain finance "value returning to users."

The returns from stablecoin wealth management primarily come from three channels: on-chain lending interest, staking rewards or node income, and profit distribution from participating in options or yield tiering strategies. For users, as long as the platform's product structure is transparent and asset custody is secure, it can be regarded as an "on-chain quasi-fixed income product."

It is worth noting that institutional investors are also beginning to incorporate stablecoin wealth management into their liquidity management tools. Institutions such as insurance companies, family offices, and funds are treating it as part of their dollar asset allocation, which has driven continuous upgrades in the platform's risk control, transparency, and compliance, providing individual users with a more mature product environment and service experience.

For ordinary investors, while stablecoin wealth management may not be a quick way to get rich, it can become one of the most stable sources of returns in asset allocation. It is like a "digital cash-like asset" in the wealth management puzzle, with returns higher than demand deposits and lower volatility than stocks, suitable for seeking certainty in uncertain environments.

However, as an emerging field, there are still risks associated with stablecoin wealth management. Some stablecoins may experience de-pegging risks for various reasons, and the security of smart contracts and the platform's risk control measures can also affect the safety of funds. Therefore, it is recommended that users choose products from well-known platforms or those regulated by authorities, prioritizing those with clear yield structures and flexible redemption options, and remain cautious of high-yield products. Stability, transparency, and compliance are key for long-term participation.

In the current low interest rate environment, stablecoin wealth management offers investors a new option. While there is no need to fully embrace the world of cryptocurrency, one can obtain a transparent, secure "digital savings account" with an annualized return of approximately 5% through stablecoins, seeking certain returns amidst uncertainty.