The latest report by Gate Research, titled “In-Depth Analysis of Stablecoin Alpha — Capture Logic and High-Yield Execution Paths“ , which systematically examines the mechanism design and user yield pathways of yield-bearing stablecoins. By analyzing representative projects such as USDe, USDS, and USDY, the report distills the core logic and strategic framework behind stablecoin Alpha in the current market environment, helping investors identify high-quality opportunities with risk-adjusted return potential. It emphasizes that stablecoin Alpha is not simply about high yields, but rather a structured, sustainable, and incentive-driven return system. Yield sources span on-chain arbitrage, off-chain assets, mechanism innovation, and ecosystem incentives. The report also underscores the importance of managing key risks—such as liquidation, liquidity constraints, and protocol security—while pursuing enhanced returns.

Key Takeaways:

• Diversified Yield Models: Yield-bearing stablecoins generate returns through a variety of mechanisms, broadly categorized into eight strategies across different risk levels. These include low-risk options like U.S. Treasury-backed RWAs (4%–5.5% APY), medium-risk lending protocols (2%–8% APY), and high-risk market-neutral arbitrage strategies (5%–20%+ APY).
• USDe (Ethena Labs) Yield Strategy: Ethena’s sUSDe generates yield through a Delta hedging mechanism, which involves shorting perpetual futures to hedge spot long positions. The current sUSDe APY is approximately 7.39% (with a volatility range of 5%-25%). When combined with ENA airdrop rewards (3%-5%), the overall integrated APY can reach 9%-11%. Users can earn yield by utilizing the Ethena Earn module, participating in cross-chain liquidity pools (up to 18% APY), or by awaiting airdrops.
• USDS (Sky Protocol) Yield Strategy: As an upgraded version of DAI, USDS features built-in native rewards. Users can deposit USDS into the Sky Savings Rate (SSR) to mint sUSDS, earning a current APY of 4.5%. Staking the SKY token further unlocks rewards in USDS of up to 14.91% APY. When combined with Spark Protocol missions and point farming, users can optimize their exposure to future SPK airdrops.
• USDY (Ondo Finance) Yield Strategy: USDY is a yield-bearing stablecoin fully backed by short-term U.S. Treasuries and bank deposits. It currently offers a base APY of 4.29%. Users can boost returns by depositing USDY into DeFi platforms such as Scallop Protocol or NAVI Protocol, where APYs can reach up to 13%. Advanced strategies in the Sui ecosystem, such as lending and reinvesting loops, can push yields even higher—between 12% and 17% APY.
• Other Innovative Alpha Strategies: Falcon Finance’s USDf offers on-chain arbitrage yields based on digital asset collateral. Lista DAO achieves high-yield lending and liquid staking on BSC through a Pendle+Lista combination, while Hyper EVM provides continuous returns from stablecoin market-making. These initiatives significantly enrich the stablecoin alpha strategy landscape.
• Core Logic of Stablecoin Alpha: Stablecoin alpha is not solely about high yields—it represents structural, sustainable, and differentiated excess returns. Key sources include mechanism innovation, leveraged loop strategies, RWA yield integration, and incentive/airdrop mechanisms.
• Risk Identification and Mitigation: While the yield potential is significant, stablecoin alpha strategies carry risks, including volatility in mechanisms, liquidation exposure, liquidity constraints, and protocol security vulnerabilities. To mitigate risks, users should prioritize RWA-backed assets, implement liquidation buffers, monitor on-chain liquidity, and choose audited and reputable projects.

Gate Research is a comprehensive blockchain and cryptocurrency research platform that provides readers with in-depth content, including technical analysis, trending insights, market reviews, industry research, trend forecasts, and macroeconomic policy analysis.

Disclaimer
Investing in the cryptocurrency market involves high risk. Users are advised to conduct independent research and fully understand the nature of the assets and products before making any investment decisions. Gate is not responsible for any losses or damages arising from such investment decisions.

Gate Team
Jun 18th, 2025

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