Yield-bearing stablecoins now represent 4.5 % of the entire $245 billion stablecoin universe, expanding from $1.5 billion just five months ago to $11 billion today.
Driving the boom is a growing desire among investors to monetize idle dollar-pegged assets at a time when the Federal Reserve’s benchmark rate hovers near 4.3 %.
Pendle, a DeFi protocol that lets users lock in fixed returns or speculate on variable rates, has emerged as the clear winner, capturing roughly $3 billion in total value locked—about 30 % of the niche.
The platform says stablecoins now make up 83 % of its $4 billion TVL, a seismic shift from mid-2024 when Ether accounted for nearly 90 %.
Regulatory clarity removes a hurdle
February’s decision by the US Securities and Exchange Commission to label yield-bearing stablecoins as “certificates” rather than banning them outright proved pivotal.
Under the certificate model, issuers must register and provide disclosures but can continue to pass interest to holders—something legacy coins like USDT and USDC cannot do.
Proposed bills such as STABLE and GENIUS would further codify oversight, and the industry views both as baseline bipartisan compromises.
Pendle plots multi-chain expansion
While Ethena’s USDe currently dominates Pendle’s stablecoin pools, newer issuers like Open Eden and Falcon lifted the non-USDe share from 1 % to 26 % in 12 months.
Pendle plans to extend support to Solana, integrate with Aave, and plug into Ethena’s forthcoming Converge blockchain, betting that cross-chain liquidity will draw more institutional capital.
The protocol also sees the overall stablecoin market doubling to $500 billion within two years, with yield-bearing variants grabbing at least a 15 % slice—or $75 billion—in the same window.
Franklin’s recent launch of “Payroll Treasury Yield,” a service that channels corporate payroll floats into on-chain lending, typifies how mainstream firms are chasing crypto yield products as rates stay elevated.