What Is a Yield-Bearing Stablecoin?
A yield-bearing stablecoin is a dollar-pegged token that tries to pay you while you hold it. The yield might come from Treasury bills behind an RWA wrapper, from lending, or from incentives printed by the protocol. The costume is a savings account. The insides are a fund, a loan book, or a farm.
How It Actually Works
- Some tokens rebase: your balance ticks up. Some stay at one token and grow a price or an exchange rate, like an LST. The tax lot behavior can differ; do not guess. See the tax guide.
- The only adult question is still the who-pays question. T-bill yield is one answer. Borrower demand is another. Newly minted points are a third, and they are not the first two.
- U.S. payment-stablecoin rules (the GENIUS Act territory in my securities guide) drew a brighter line around reserved payment coins. Yield products tend to sit on the investment side of that line, which is information, not a blessing.
Risks and Common Mistakes
- Not a bank deposit. No FDIC or NCUA. A depeg or a failed wrapper is your loss. Insurance guide.
- Peg plus yield plus smart contract is three risks wearing one ticker. People add them up as if they cancelled.
- Looking at APY before redemption rules. If you cannot exit at a dollar during stress, the yield was a rental fee on an exit that vanished.
When It Matters
Parking dry powder. If you want a dollar, use a reserved payment stable and accept zero yield. If you want yield, you bought a risk product. Size it like one on the Portfolio page.
Related Terms
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