Yield-bearing stablecoins have soared to $11 billion in circulation, representing 4.5% of the entire 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 permits customers to lock in fastened yields or speculate on variable rates of interest. Pendle now accounts for 30% of all yield-bearing stablecoin complete worth locked (TVL), roughly $3 billion, the agency mentioned in a report shared with Cointelegraph.
Pendle famous that stablecoins make up 83% of its $4 billion complete worth locked, a pointy rise from lower than 20% only a yr 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 rising regulatory readability beneath US President Donald Trump’s administration.
In February, the US Securities and Trade Fee accredited yield-bearing stablecoins as “certificates” topic to securities regulation, reasonably than banning them. The approval permits yield-bearing stablecoins to function beneath particular guidelines, together with registration, disclosure necessities and investor protections.
Proposed payments just like the Stablecoin Transparency and Accountability for a Higher Ledger Economic system (STABLE) and the Guiding and Establishing Nationwide Innovation for US Stablecoins (GENIUS) sign a good course.
In the meantime, Pendle mentioned 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 progress 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 at present 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 yr.
Pendle can also 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 methods inside the cryptocurrency sector has surged lately, pushed by each retail and institutional buyers looking for to maximise returns on their digital property.
On Might 19, Franklin, a hybrid money and crypto payroll supplier, introduced 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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