Many crypto platforms allow users to stake USDT, USDC, and dollars with an interest rate of 5-15%, without the risk of crypto market downturns.
Though some platforms might term their stablecoin passive income schemes as "staking", it often doesn't have a direct connection to the traditional staking concept. Typically, USDT and other stablecoins can be farmed on decentralized exchanges. In some cases, they can be used to provide liquidity and earn a portion of the trading fees generated by the platform.
Today, we will review 7 crypto platforms that promise enticing annual yields for farming stablecoins and traditional US dollars.
Dodo
Dodo is an aggregator for decentralized exchanges across a range of blockchains, particularly those compatible with EVM, including BSC, Avalanche, Ethereum, Polygon, and others. Before depositing funds in any of these networks, it's wise to review the total liquidity of stablecoin trading pools and the potential yields they offer.
On BNBChain, for example, you can stake BUSD and USDT with an expected annual return of 8%. This approach offers flexible farming, allowing withdrawals at any time. On the Arbitrum network, Dodo suggests a 6% yield for staking USDT and USDC, which is quite attractive.
It's worth noting that these rates can change, so monitoring the platform's yield trends can be beneficial.
Stablecoin farming on Dodo. Source: app.dodoex.io
Syncswap
Syncswap is a decentralized exchange operating on blockchains such as zkSync, Linea, Ethereum, and several test networks. Within the zkSync network, the trading pair USDC/USDT can yield up to 4%. However, if paired with ETH, the potential yield can climb to 9%.
Farming with the BUSD/USDC pair allows for a potential 5% annual return. The platform also supports various algorithmic stablecoins and other DeFi project stablecoins, which might offer higher returns.
Stablecoin farming on Syncswap. Source: syncswap.xyz
Maverick Protocol
A service comparable to the one previously mentioned, Maverick Protocol operates across the Base, BNB Chain, Ethereum, and zkSync networks. The total assets locked in the protocol amount to $30 million, and it sees a daily trade volume of around $78 million.
Maverick offers attractive returns for farming stablecoins. In the USDT/USDC trading pair, investors can expect an annual yield of 11%. Meanwhile, DAI/USDT offers up to 5%, and farming LUSD/USDC can yield as much as 9% per annum.
These rates are specific to the zkSync network at the time this piece was written; rates on other blockchains may vary.
Stablecoin farming on Maverick. Source: app.mav.xyz
Trader Joe
Trader Joe is a DeFi platform functioning on the Avalanche and Arbitrum blockchains. We've previously provided an in-depth review of this platform. Trader Joe boasts a diverse selection of farming pools, including options with algorithmic stablecoins.
For instance, the USDt/USDC pair can generate up to 7% annually, while the USDT.e/USDC pair offers 18% yield. Tokens with suffixes like ".e", ".t", or ".a" represent specific stablecoins from various DeFi applications, tailored for certain liquidity pools.
These assets are considered synthetic, carrying a higher degree of risk, but they also promise greater returns.
Stablecoin farming on Trader Joe. Source: traderjoexyz.com
PancakeSwap
A decentralized exchange compatible with multiple EVM networks, PancakeSwap was primarily developed on the BNB Chain. The yield from farming activities displays stark contrasts across different blockchains. For instance, on the zkSync network, investors can potentially see up to 19% annual returns when farming the BUSD/USDC pair and as much as 11% with the USDT/USDC pair.
On the BNB Chain, engaging with the TUSD/USDT pair might yield an 11% annual return, while the BUSD/USDT pair can go up to 8%. Additionally, PancakeSwap hosts pools that deal with various algorithmic stablecoins, one of which is axlUSDC.
Notably, on the Arbitrum network, when you stake ETH with USDT, you might get 37% in returns, but be advised, this rate can fluctuate significantly.
Stablecoin farming on Pancake Swap. Source: pancakeswap.finance
Ferro Protocol
Distinguished as a specialized DeFi protocol, the Ferro Protocol allows its users to augment their profits by allocating their NFTs for staking. Operating seamlessly on the Cronos blockchain, the protocol's trading pools, which include stalwarts like DAI, USDT, and USDC, offer a profitability spectrum ranging from a modest 4% to an enticing 11%.
It's worth noting that the more liquid a trading pair is on the Ferro Protocol, the more conservative the returns. This is because an extensive pool of farming participants would necessitate an even distribution of profits derived from transactions.
Stablecoin farming on Ferro Protocol. Source: ferroprotocol.com
THORSwap
THORSwap is a large decentralized platform operating on multiple blockchains, including Bitcoin, Ethereum, and Cosmos. While a portion of user funds is channeled into liquidity pools, another segment supports the Thor lending protocol.
With THORSwap, staking USDC can yield an annual return of 14%. Similarly, staking BUSD can generate up to 13%, while USDT offers as much as 14%. Beyond stablecoins, the platform also offers staking of cryptocurrencies such as ETH, BTC, BNB, LTC, and ATOM.
Stablecoin farming on THORSwap. Source: app.thorswap.finance
Other Services
The aforementioned platforms are just a subset of the myriad services that offer returns on stablecoin farming. Both decentralized and centralized crypto exchanges frequently introduce programs where users can earn interest on their USD holdings. However, CEXs typically provide slightly lower annual interest rates.
For an extensive list of trading platforms and exchanges, one can consult analytical websites such as CoinGecko and CoinMarketCap, particularly their “Exchanges” section.
Final Words
While stablecoin farming provides a way to potentially maintain the dollar value of one's investments, it's not devoid of risks. These risks encompass the uncertainties of the DeFi sector, potential security breaches of platforms, scams, unintended software exploits, and coin depreciation, among others.
Hence, before diving into any investment, it's imperative to diligently assess the inherent risks and ensure they align with your investment strategy.
