Yield-bearing stablecoins have soared to $11 billion in circulation, representing 4.5% of the overall stablecoin market, a steep climb from simply $1.5 billion and a 1% market share initially of 2024.
One of many greatest winners is Pendle, a decentralized protocol that allows customers to lock in fastened yields or speculate on variable rates of interest. Pendle now accounts for 30% of all yield-bearing stablecoin whole worth locked (TVL), roughly $3 billion, the agency stated in a report shared with Cointelegraph.
Pendle famous that stablecoins make up 83% of its $4 billion whole worth locked, a pointy rise from lower than 20% only a 12 months in the past. In distinction, property resembling Ether (ETH), which traditionally contributed 80%–90% of Pendle’s TVL, have shrunk to lower than 10%.
Conventional stablecoins like USDt (USDT) and USDC (USDC) don’t go on curiosity to holders. With over $200 billion in circulation and US Federal Reserve rates of interest at 4.3%, Pendle estimates that stablecoin holders are lacking out on greater than $9 billion in annual yield.
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Rising regulatory readability advantages stablecoins
The rise in yield-bearing stablecoins comes amid growing regulatory readability below US President Donald Trump’s administration.
In February, the US Securities and Alternate Fee approved yield-bearing stablecoins as “certificates” topic to securities regulation, moderately than banning them. The approval permits yield-bearing stablecoins to function below particular guidelines, together with registration, disclosure necessities and investor protections.
Proposed payments like the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) and the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) sign a good route.
In the meantime, Pendle stated it expects stablecoin issuance to double to $500 billion within the subsequent 18 to 24 months. The agency additionally anticipates yield-bearing stablecoins to seize 15% of this market with $75 billion in issuance (7x development from $11 billion).
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Pendle shifts focus to yield market
Initially centered on airdrop farming, Pendle has shifted towards serving as an infrastructure layer for decentralized finance yield markets.
Ethena’s USDe stablecoin presently accounts for about 75% of Pendle’s stablecoin TVL. Nonetheless, newer entrants resembling Open Eden, Reserve and Falcon have elevated the share of non-USDe property from 1% to 26% over the previous 12 months.
Pendle can be increasing past Ethereum, with plans to help networks like Solana and to combine with Aave and Ethena’s upcoming Converge blockchain.
Curiosity in yield-generating strategies within the cryptocurrency sector has surged in recent times, pushed by each retail and institutional buyers searching for to maximise returns on their digital property.
On Might 19, Franklin, a hybrid money and crypto payroll supplier, announced the launch of Payroll Treasury Yield, which makes use of blockchain lending protocols to assist companies earn returns on payroll funds.
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