Stablecoin Investment Strategy Analysis: Diversified Choices and Risk Management

In the current economic environment, USD assets have become a safe haven for many investors. Some leading decentralized finance ( DeFi ) projects have also started to utilize idle USD assets to generate returns. This article will explore several stablecoin investment strategies to provide readers with diversified options.

Convex: USDD+3Crv Strategy

USDD is an algorithmic stablecoin managed by the TRON ecosystem. As of October 27, the issuance of USDD is 725 million, with collateral valued at 2.23 billion, and a collateralization ratio exceeding 300%. Among this, the USDC collateral alone amounts to 990 million, far exceeding the issuance of USDD, indicating a relatively low risk coefficient.

Listing multiple USDD trading pairs on a certain trading platform and waiving transaction fees also brings benefits to USDD. The Convex platform shows that the annualized yield of the USDD+3Crv pool is 19.66%, and the APR of USDD+FRAXBP is 21.18%. When operating, one can first deposit stablecoins into Curve, and then stake the LP tokens into Convex.

In the TRON ecosystem, the use of USDD is more widespread. The deposit APY for USDD on a certain lending platform is 9.52%.

Canto:USDT+NOTE Strategy

Canto is a DeFi public chain compatible with the Ethereum Virtual Machine (EVM) in the Cosmos ecosystem, featuring decentralized exchanges, lending, and stablecoin NOTE. Currently, Canto's total value locked (TVL) is approximately $100 million.

The Canto platform shows that the APR for the NOTE/USDT LP is 32.14%, and the APR for the NOTE/USDC LP is 29.47%. NOTE is a stablecoin minted through over-collateralization in Canto, and liquidation will not occur when the collateral is USDC and USDT. It is recommended to use part of the USDT as collateral to mint NOTE, then provide liquidity with the remaining USDT, and finally stake the LP tokens on the lending platform.

It should be noted that Canto's cross-chain operations are relatively complex and require multiple steps to enter and exit.

Velodrome:sUSD+LUSD Strategy

Velodrome is a decentralized exchange on Optimism, with a current TVL of $82 million. sUSD and LUSD are stablecoins from Synthetix and Liquity, respectively, and are relatively safe.

The liquidity mining APR for the sUSD/LUSD trading pair on the Velodrome platform is 16.12%.

Helio:HAY+BUSD Strategy

Helio Protocol is a liquidity staking and lending protocol on the BNB chain. Users can over-collateralize to borrow HAY stablecoin, and the collateralized BNB will be used for liquidity staking. Currently, Helio's TVL is $92 million.

You can provide HAY/BUSD liquidity on a certain DEX platform, and then stake the LP tokens to Helio, where its Farming page shows that the APR for HAY/BUSD Stable LP is 19.77%.

Wombat Exchange Ecosystem Strategy

Wombat Exchange is a stablecoin trading platform on the BNB chain, characterized by low slippage and shared liquidity. Currently, the median APR for USDC, USDT, DAI, and BUSD in its main pool are 11.44%, 11.14%, 10.85%, and 7.57% respectively, including accelerated earnings from locking WOM tokens.

Applications similar to Convex have also emerged around Wombat, such as Wombex Finance and Magpie, which can provide users with higher returns.

When investing in the cryptocurrency market, be sure to understand the relevant risks, and make proper asset allocation and risk management. This article is for reference only and does not constitute investment advice.