Waterfall washing face: Which stablecoin yield pools are safe havens now?

2025.02.25

Waterfall washing face: Which stablecoin yield pools are safe havens now?

This article will introduce some risk-adjusted return opportunities worth paying attention to.

2025.02.25 - 06:44:29

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Navigating Web3 tides with focused insights

This article will introduce some risk-adjusted return opportunities worth paying attention to.

Author: Charlie

Translation: TechFlow

In the current market environment, earning yield with stablecoins is one of the effective ways to navigate challenges and achieve growth. This article outlines several risk-adjusted yield opportunities worth considering (in no particular order).

HLP (Hyperliquidity Provider)

Currently, Hyperliquid's Hyperliquidity Provider (HLP) vault offers an 18.61% yield, serving as a consistent source of returns. According to official documentation, HLP provides liquidity to Hyperliquid through various market-making strategies, executes liquidations, and accumulates platform trading fees.

It should be noted that HLP returns are typically uneven. Over extended periods, yields may remain flat or grow slightly, but during liquidation events, significant single-day returns often occur:

However, due to the relatively opaque operational mechanism of HLP, depositors are fully dependent on the expertise of the Hyperliquid team, introducing certain "black swan risks" (potential losses from extreme events). That said, it’s reassuring that data shows traders lose on average, suggesting the HLP vault could maintain profitability over time. Additionally, depositors should note that funds deposited into HLP are locked for four days before withdrawal.

Sky Money

Sky Money is MakerDAO's new brand, currently offering stablecoin depositors two options:

Earning 8.52% yield in the Rewards Vault, paid in SKY tokens.
Earning 6.5% yield in the Savings Vault, paid in USDS (which also serves as the new DAI savings rate).

Compared to the Savings Vault, the higher yield from the Rewards Vault is clearly more attractive, and both options carry similar risk levels. Depositors in the Rewards Vault can accumulate SKY tokens, which we believe are currently undervalued by the market. Holding and accumulating SKY instead of simply "farming and dumping" may provide additional upside potential beyond the nominal yield.

Ethereal

Ethereal is a decentralized perpetuals exchange closely associated with and supported by the Ethena team. It is expected to launch on the "Ethena Network," serving as a tool for the Ethena team to hedge their spot long positions, thereby reducing capital flow to centralized exchanges (CEX).

Currently, Ethereal is running a points campaign called "Season Zero," where users depositing USDe can earn Ethereal points and receive a 30x boost in Ethena rewards (exact benchmarks are unclear, but it’s reasonable to assume some $ENA tokens will be distributed to depositors).

The exact annual percentage rate (APR) for this opportunity is not yet clear; I estimate it could range between 15%-20%, depending on the eventual token price of Ethereal. Due to the lack of yield transparency, there may be some opportunity cost-related risks. Nevertheless, I believe this is a noteworthy addition to a stablecoin yield portfolio.

AO

AO remains a relatively low-profile project for many market participants. We actually covered it back in May 2024 in an article. AO has long operated a pre-deposit mining program, and now that the token generation event has concluded, its annualized yield has been confirmed:

1 DAI earns 0.004424 AO per year, equating to an APR of 14.37% at the current AO price ($32.49).

Similar to Sky and Ethereal, mining AO currently offers solid returns whether one chooses to "farm and sell," or hold the AO tokens. Holding AO could unlock greater appreciation potential, adding further upside to the current APR.

Berachain

Berachain's native DEX offers some interesting opportunities, such as the USDC.e/HONEY pool, which currently pays a 13.79% yield in BGT. BGT is a soulbound token (non-transferable), but can be burned 1:1 for BERA. Miners can choose to immediately sell BGT to realize the current APR, or accumulate BGT, betting on the future development of the Berachain ecosystem (which has recently been gaining momentum).

Sonic

Sonic is running a massive airdrop mining campaign, distributing hundreds of millions of dollars in S tokens to incentivize ecosystem growth. This creates unique opportunities for yield farmers, warranting further attention and research.

Shadow Exchange is a native decentralized exchange (DEX) within the ecosystem, offering several highly attractive stablecoin investment opportunities. Two stand out in particular:

USDC.e/scUSD: 28.9% annualized yield
USDC.e/USDT: 35.3% annualized yield

Navigator Exchange is a GMX fork that has launched a GLP/JLP-like product called NLP. It should be noted that because NLP’s portfolio includes exposure to S, BTC, and ETH, it carries certain price volatility risk (Delta risk). The current NLP returns are: