Stablecoins often have an annualized return of over 10%. Where do these high returns come from?

The stablecoin craze continues, and recently many prominent figures outside the industry have been asking me about stablecoins. Many of them have asked me this question: Previously, if companies had liquid funds, they would often make low-risk investments. Now, if they're using stablecoins, which themselves have no potential for appreciation, how can companies realize the value of their liquidity? In fact, many outside the industry are still stuck on issuing coins, unaware that the blockchain world has already established a comprehensive financial system combining CeFi and DeFi. Through the compatibility of CeFi and DeFi, stablecoins also offer numerous financial management channels, even offering annualized returns of up to 10%.

Why can stablecoin financial management achieve such high returns?

We can look at the eight major sources of stablecoin income on the market:

• Stablecoin issuers will give users disguised interest returns through channel promotion fees, such as Tether or Circle's partner rewards. To promote their products and attract user capital, trading platforms will also offer higher interest rates and compound interest products. Trading platforms can operate through lending markets, where users who borrow U will pay interest to those who lend U. On-chain lending platforms can facilitate the borrowing and lending of U through a decentralized approach. Providing liquidity to DEX liquidity pools earns a share of transaction fees. Some pools even offer token rewards, creating a double benefit. Participating in DeFi's liquidity mining or yield farming is a form of project subsidy, offering high returns but susceptible to hacking and incentive decay. Real-world income is moved on-chain, typically by putting US Treasury bonds on-chain. These can be packaged into yield-generating stablecoins, allowing ordinary users to enjoy US Treasury bond yields of around 4%. Yield-generating stablecoins allow project owners to profit from CeDeFi arbitrage, particularly the neutral strategies that have been popular in this cycle. These strategies can hedge against price volatility risks, but returns may be lower in a bear market.

After careful consideration, we can see that the high returns from stablecoin investment products are not groundless, but a reliable source of income.

The stablecoin craze continues. While the previously anticipated stablecoin war has yet to materialize, the stablecoin investment subsidy war has emerged.

This stablecoin craze is driven primarily by traditional financial institutions and traditional capital, making it difficult for ordinary retail investors to gain significant opportunities.

However, retail investors can also benefit from this boom, directly earning income through stablecoin investment products.

The stablecoin financial subsidy war benefits ordinary users like us, who can seize the dividends of this wave of stablecoin craze.