If you are looking for the best place to earn interest on stable coins like USDC, USDT, DAI and more, this guide has you covered. Our research team has sifted through the best lending protocol's and DEX's across Layer 1 and Layer 2 applications to find the best yields for depositors and stakers.
The 4 best platforms to earn high interest rates on stablecoin deposits are:
- AAVE - Overall best and safest.
- Curve Finance - Best for advanced DeFi users.
- Stargate Finance - Easiest to use.
- Convex Finance - Best for Curve Finance users.
Best Overall Stablecoin Farm
Platform Highlights
- Trusted DeFi protocol with $12 Billion in value locked.
- Earn up to 5% APY on top stablecoins like USDC, DAI and USDT.
- Deployed across 8 EVM-compatible Layer 1 and Layer 2 networks.
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1. AAVE
AAVE is the best stablecoin farm because they offer the highest yields, lowest borrowing rates and a wide range of tokens like USDC, USDT, DAI and FRAX. You can access AAVE from a variety of networks including Ethereum, Avalanche, Optimism, Polygon and more. Their platform is the most secure and has the most Total Value Locked compared to other protocols.
AAVE currently has over $17B in liquidity locked on their money market earning yield.
- USD APY: 3-5%
- Chains: ETH, AVAX, MATIC, Arbitrum, Fantom, Harmony
- Tokens: DAI, USDC, USDT and FRAX
2. Curve Finance
Curve Finance is a great platform for advanced crypto users looking to earn slightly higher rewards with some added complexity. With this platform, investors need to deposit or supply liquidity to a two, or three-sided pool with various stablecoins. A pool example would be USDC/UST/MIM.
This creates a pool of liquidity for traders to be able to swap between the stablecoins for low fees and low slippage. Users who deposit stablecoins to this liquidity pool can earn high rewards from swap fees.
It is important to also note that we would only recommend Curve Finance for advanced users and DeFi natives. It can get quite complicated and requires active management and attention.
- USD APY: 5-8%
- Chains: ETH, AVAX, Arbitrum, Polygon
- Tokens: USDC, UST, DAI, MIM, FRAX, LUSD, BUSD
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3. Stargate Finance
Stargate Finance is a platform that enables cross-chain swaps for stablecoins like USDC, USDT and DAI. Investors can provide liquidity to the pools that enable these swaps to earn high yields. This stablecoin swap exchange is also backed by some of the largest names in the space like Alameda Research, FTX, Naval and others.
The Stargate Finance token rewards are mainly paid out in STG (their native token). This plarform is growing very quickly so it could be a great way to earn STG tokens to invest for free by providing stablecoin liquidity.
- USD APY: 3-4%
- Chains: ETH, AVAX, Arbitrum, Polygon, Binance Smart Chain
- Tokens: USDC, USDT and BUSD
4. Convex Finance
Convex Finance is another way to earn high interest rates on stablecoin deposits. This protocol is compatible with Curve Finance and allows users to take their stake USD stablecoins from Curve, then deposit them on Convex for boosted yield.
The Convex protocol is one of the largest DeFi protocols by Total Value Locked (TVL) with over $4.5 billion in deposits. The best stablecoin farm on Convex is currently the FRAX/USDC pool that yields 3% and has over $800 million in deposits.
- USD APY: 3-16% (long-tail risky stablecoins available)
- Chains: Ethereum only
- Tokens: USDC, USDT, BUSD, FRAX, MIM, LUSD, TUSD, DAI, cUSD and more
Fantom Stablecoin Yield Farms
If you are looking for good stablecoin yields on alternative EVM chains like Fantom, we recommend that you check out SpookySwap. This is a popular DEX on the FTM Opera Network that provides safe and reasonable yields for USDC, USDT, DAI, MIM and FRAX deposits.
Are Stablecoins Safe?
The safety of the stablecoin varies depending on it's underlying design. Our research has found that fully-collateralized stablecoins like USDC and USDT are the most safe, which is why they have been around for the longest. If you are looking to earn yield in DeFi, we recommend you stick to these two coins.
Uncollateralized stablecoins like UST (by Terra Labs) and Magic Internet Money (MIM) have proven to have a weak $1 peg that has broken several times in the past. We would recommend avoiding these types of stablecoins on any chain.
Is Stablecoin Farming Safe?
Stablecoin farming refers to the practice of earning yield on stablecoin deposits. It is a way for users to earn interest on their stablecoin holdings by depositing them in a protocol or platform that offers yield on stablecoin deposits. The safety of stablecoin farming depends on a number of factors, including the specific platform or protocol being used, the stability of the underlying stablecoin, and the risks associated with the particular yield-generating strategy being employed.
As with any financial activity, it is important to carefully research and evaluate the risks before engaging in stablecoin farming. It may be advisable to consult with a financial advisor or other professional before deciding whether stablecoin farming is a suitable investment strategy for you.
Final Thoughts
To summarize, users looking to earn interest on stablecoin deposits have multiple options to choose from, including AAVE, Curve Finance, Stargate Finance, and Convex Finance. AAVE offers the highest yields, lowest borrowing rates, and the most secure platform, while Curve Finance is best for advanced DeFi users. Stargate Finance is the easiest to use, and Convex Finance is best for Curve Finance users.
It is important to note that the safety of stablecoins varies, with fully-collateralized stablecoins like USDC and USDT being the safest. Users should also carefully research and evaluate the risks before engaging in stablecoin farming.
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Author
Dylan Matthews is the Co-Founder and head of operations at Buy Bitcoin Bank, with a background in engineering and experience as a Prop Trader. He has leveraged his knowledge and skills to build and scale the platform, providing users with a seamless experience for buying and selling cryptocurrency.
