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
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
Top 3 Stablecoin Farms Compared
The chart below shows a high-level comparison of the key features of the top 3 stablecoins featured on our list. This will help you get an understanding of each DeFi protocol at a glance to start earning interest quickly.
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.
Stablecoin farming has become an increasingly popular way for users to earn passive income with their crypto holdings. Whether you are looking for high-yield interest rates on USDT or USDC, or more risky long-tail yield options like FRAX and MIM, there is a range of DeFi protocols available to choose from.
Before deciding to engage in stablecoin farming, it is important to research the specific platform or protocol being used and evaluate the risks associated with the yield-generating strategy. It may also be advisable to consult with a financial advisor or other professional for advice on whether this is a suitable investment strategy for you. With proper caution and due diligence, stablecoin farming can be a profitable way to earn yield on your crypto holdings.