In 2025, yield-bearing stablecoins have gained immense popularity as they combine the stability of traditional stablecoins with the added benefit of earning passive income.
These financial tools appeal to both seasoned crypto investors and newcomers seeking steady returns.
Yield-bearing stablecoins leverage a range of mechanisms, from staking to real-world asset backing, to generate returns for their holders.
Below, we explore the top 5 stablecoins with the highest yield in 2025:
1. Angle Protocol Stablecoin
Key Features
The stUSD stablecoin offered by Angle Protocol is backed by a diverse mix of real-world assets, including U.S. Treasury bills and high-quality DeFi assets. This ensures a stable foundation for returns. The platform uses secure, audited smart contracts to manage funds transparently.
Angle Protocol focuses on minimizing risk while optimizing yields. The system is fully integrated with other DeFi platforms, ensuring ease of use for investors.
Yield Potential
The current annualized yield for stUSD ranges from 4-6%, distributed automatically to holders without requiring manual claiming processes.
How It Works
Angle Protocol uses a combination of on-chain transparency and optimized asset allocation strategies to ensure sustainable yields. Funds are allocated to a mix of real-world assets and DeFi pools, generating reliable returns for users.
Pros and Cons
- Pros: Low-risk yield generation, fully transparent mechanisms, seamless integration with DeFi platforms.
- Cons: Limited yield compared to riskier platforms, dependency on stable real-world asset performance.
2. MakerDAO Stablecoin
Key Features
MakerDAO’s sDAI is governed by the decentralized MakerDAO community, ensuring democratic control of its policies. It is backed by over-collateralized positions, offering high stability. The platform’s reliance on decentralized governance makes it resilient to centralized risks.
MakerDAO’s robust ecosystem supports various integrations, enhancing utility. The transparent collateralization process builds trust among users.
Yield Potential
The Dai Savings Rate (DSR) for sDAI currently offers a 3.5% annualized yield, compounded continuously for optimal returns.
How It Works
sDAI earns yields by allowing users to deposit DAI into the DSR contract. The decentralized system uses the deposited funds to generate returns through over-collateralized loans.
Pros and Cons
- Pros: Long-standing trust within the DeFi community, seamless integration with multiple platforms, transparent governance system.
- Cons: Relatively lower yields compared to other stablecoins, reliance on DAI liquidity.
3. Ethena Finance Stablecoin
Key Features
USDe, Ethena Finance’s stablecoin, employs delta-hedging strategies to minimize market risks. The platform integrates with top DeFi protocols to enhance staking returns. Ethena provides comprehensive risk metrics for all yield-generating activities, increasing transparency.
USDe supports scalability, allowing it to handle large transaction volumes efficiently. The system is designed for cautious investors seeking predictable returns.
Yield Potential
The platform provides yields ranging from 5-7%, with rates varying based on market conditions and strategy effectiveness.
How It Works
Ethena Finance uses delta-hedging techniques to balance market risks and generate stable yields. The platform collaborates with DeFi protocols to maximize returns through staking and liquidity pools.
Pros and Cons
- Pros: High yields for a stablecoin, robust risk assessment tools, innovative financial strategies.
- Cons: Complexity in its underlying strategies may deter less experienced users, yield variability depends on market performance.
4. Ondo Finance Stablecoin
Key Features
USDY is backed by U.S. Treasuries and high-quality bank demand deposits, providing unmatched stability. The platform focuses on real-time transparency, enabling users to verify the backing of their investments. Ondo uses a regulated asset-backed model to minimize risks.
Its structure caters to institutional and individual investors alike. The ecosystem supports integration with global payment systems for seamless use.
Yield Potential
USDY offers yields of 4-5%, primarily derived from interest on short-term U.S. Treasury bills.
How It Works
Ondo Finance pools user funds and allocates them into low-risk financial instruments such as U.S. Treasuries. These investments generate returns, which are distributed to USDY holders.
Pros and Cons
- Pros: Secure and low-risk yields, real-time transparency, ideal for conservative investors.
- Cons: Limited to lower-risk returns, potential delays in Treasury asset liquidity.
5. PayPal Stablecoin
Key Features
PYUSD is backed by regulated financial institutions, ensuring stability. The stablecoin integrates directly into PayPal’s payment ecosystem, providing unmatched accessibility. It allows users to earn yields passively without the complexities of DeFi.
The platform’s partnership with leading financial entities enhances its trustworthiness. PYUSD is designed for both traditional and crypto-savvy users.
Yield Potential
Yield rates for PYUSD range from 2-4%, depending on market conditions and institutional partnerships.
How It Works
PayPal partners with leading financial entities to generate passive income for PYUSD holders. The ecosystem allows users to earn yields without interacting with complex DeFi systems.
Pros and Cons
- Pros: Mainstream accessibility, low entry barrier, trusted infrastructure.
- Cons: Lower yields compared to crypto-native platforms, limited DeFi integration options.
Comparison Table
Platform | Stablecoin | Yield Rate | Backing Mechanism | Unique Features |
---|---|---|---|---|
Angle Protocol | stUSD | 4-6% | Real-world assets, DeFi | Automated yield distribution |
MakerDAO | sDAI | 3.5% | Over-collateralized | Trusted and widely adopted |
Ethena Finance | USDe | 5-7% | Delta-hedging, staking | Advanced risk strategies |
Ondo Finance | USDY | 4-5% | U.S. Treasuries, deposits | Institutional-grade security |
PayPal | PYUSD | 2-4% | Regulated financial assets | Mainstream accessibility |
Conclusion
Yield-bearing stablecoins have become an essential tool for investors in 2025, offering a blend of stability and passive income.
Platforms like Angle Protocol, MakerDAO, Ethena Finance, Ondo Finance, and PayPal cater to a wide range of user needs, from decentralized finance enthusiasts to traditional investors.
Evaluate your risk tolerance and investment goals to choose the platform that aligns with your needs and unlock the potential of yield-bearing stablecoins.
Read more about stablecoins
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