Stablecoin Yield Farming: The Most Profitable Platforms
Stablecoin farming continues to be one of the prime ways to generate passive income in the realm of cryptocurrencies.
Farming is a profitable strategy that involves providing liquidity for trading pairs on decentralized exchanges. Users can earn rewards from the platform and also receive a portion of the token swap fees. The popularity of farming stablecoins has grown due to the stable price of these tokens.
This article explores DEX platforms that offer the highest farming returns for USDT and other stablecoins.
PancakeSwap
This is the largest decentralized platform on the Binance Smart Chain (BSC). It facilitates the farming of stablecoins such as USDC, USDT, BUSD, and a few pegged stable coins.
On average, the Annual Percentage Rate (APR) for pairs involving stable coins hovers between 7-9%. Engaging in farming with the USDC-BUSD pair can yield users an annual return of 12.5%.
Earnings from stablecoin farming on PancakeSwap. Source: (pancakeswap.finance/farms)
Biswap
Biswap is the runner-up in popularity among DEX platforms on the Binance Smart Chain, following PancakeSwap. It allows for the integration of stablecoins into liquidity pools, alongside BTC, ETH, BNB, BSW, and other tokens.
In the context of USD-pegged stablecoins, the annual yield fluctuates between 4% and 6%.
Revenue from farming on the Biswap platform. Source: biswap.org/ru/farms/live
Quickswap
Quickswap is a DeFi protocol operating on Ethereum Polygon's Layer 2 blockchain. In the "Farm" section, filters can be applied to display pools that only pair with stablecoins. You can farm stablecoins like DAI, MAI, USDC, and USDT.
The annual yield ranges between 4% and 11%, contingent on the type of stablecoin and the volume of locked liquidity.
Proceeds from farming on the Quickswap platform. Source:quickswap.exchange
Trader Joe
Trader Joe is a decentralized platform operating on the Avalanche blockchain. This platform hosts numerous wrapped stablecoins like USDT and USDC.e, which find use in various staking pools and cross-chain operations. The annual return from farming these coins typically falls between 3-5%.
Camelot
Camelot is a decentralized exchange (DEX) on Ethereum's Layer 2 network, Arbitrum. It stands as one of the most substantial DEXs on Arbitrum, with many trading pairs boasting liquidity of over a million dollars.
On Camelot, stablecoins like USDC, USDT, and DAI can be farmed, offering an average annual percentage yield (APY) in the 6-20% range.
Income from farming on the Camelot platform. Source: app.camelot.exchange/pools
Syncswap
Syncswap, a fairly new platform, functions as a DEX on the zkSync Era network. Given the widespread anticipation of a retroactive airdrop, this network is heavily trafficked, resulting in a high volume of transactions on decentralized exchanges. This volume leads to significant swap fee revenues, which get distributed among liquidity providers.
Due to the platform's high popularity and limited liquidity, farming pools on Syncswap offer exceptionally high yields. Stablecoins such as UDT, USDC, BUSD, and USD+ can yield 6-20% annually.
Income from farming on the Syncswap platform. Source:syncswap.xyz/pools
Risks of Stablecoin Farming
Stablecoin farming isn't without its risks and downsides:
・A stablecoin, particularly an algorithmic one, may suffer value loss due to hacking, collateral issues, or other unexpected events.
・Decentralized exchanges might be scams or could be vulnerable to hacking, putting their liquidity at risk.
・At times, the fee for depositing funds into farming may surpass the potential income.
Hence, it's paramount to diversify your portfolio wisely and follow basic security guidelines when interacting with liquidity pools.
