CashboardGlossary · Stablecoins
What is a yield-bearing stablecoin?
A yield-bearing stablecoin is a dollar token that passes income from its backing, such as Treasury interest or perp funding, on to the holder.
How does a yield-bearing stablecoin work?
USDT and USDC keep the interest earned on their reserves. That is the business. Yield-bearing stablecoins hand some of it to holders. Ondo's USDY passes through what its Treasuries and bank deposits earn, and Sky's sUSDS pays whatever savings rate the protocol sets on wrapped USDS. Ethena's sUSDe works differently. It earns from shorting perps against the crypto it holds, plus staking rewards.
The yield usually shows up as a rising price rather than a growing balance. A token that starts at $1.00 might redeem for $1.05 a year later. So these behave more like a money market fund share than a dollar, and any protocol that values one at a flat $1 has it wrong.
Each source of yield breaks differently. Treasury designs lean on custody and redemption terms. Funding designs need perp funding to stay positive; when it flips negative for weeks, the hedge starts costing money and a reserve fund has to absorb it. In the US, the GENIUS Act bars payment stablecoin issuers from paying interest to holders, so yield products there have to be structured as something else. USDY, for one, is not offered to US persons.
Suppose two tokens both pay 8 percent. One gets it from Treasury bills plus a protocol subsidy, the other from BTC and ETH funding. Three weeks of negative funding later, the second yield can be near zero while the first has barely moved.
Also called: interest-bearing stablecoin, savings stablecoin.
Where does a yield-bearing stablecoin show up in Cashboard?
Stablecoin risk has a Yield column, but read it carefully: it is the APY of the largest DefiLlama pool by TVL for that token outside credit projects, so it shows what depositing the coin somewhere earns, not a yield built into the coin. If a coin earns from funding, Perps risk shows what BTC, ETH and SOL funding pays right now on three on-chain perp venues. Ethena hedges mostly on centralized exchanges such as Binance and Bybit, which Cashboard does not track, so treat those funding rates as a read on direction, not as Ethena's actual income.
Frequently asked questions
Where does the yield on a yield-bearing stablecoin come from?
Usually from one of three places: interest on Treasury bills, interest paid by borrowers against crypto collateral, or funding collected by a short perp position held against crypto. sUSDS pays a rate Sky sets, funded mainly by the first two. Check which one it is before comparing rates, because a Treasury yield and a funding yield fail in very different markets.
Related terms
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