Generating profit in the crypto market is challenging, despite what some may claim. With crypto’s high volatility and extreme emotional swings, many investors seek safer alternatives. For those looking to avoid wild price movements, stablecoin yield farming offers a promising opportunity.

Understanding Stablecoins

Stablecoins are digital assets pegged to stable assets such as U.S. dollar savings accounts and treasury bonds. This backing ensures their value remains relatively constant. Popular examples include USDC, USDT, and PYUSD (PayPal’s stablecoin).

In the Philippines, Coins.ph launched a local stablecoin called PHPC, backed by peso-denominated savings accounts in top universal banks such as UnionBank of the Philippines and Security Bank. PHPC is subject to strict reporting with Coins.ph submitting a monthly attestation to its proof of reserves.

Stablecoins’ stability makes them ideal for investors looking to capitalize on crypto returns but with low volatility.

What is Stablecoin Yield Farming?

Stablecoin yield farming has become popular by combining low risk with attractive returns. It’s been so popular that the stablecoin market capitalization has reached an all-time high of over $240 billion, notable since the total crypto market cap hasn’t yet recovered to its peak.

In traditional finance, storing cash in low-risk assets like bank savings accounts and treasury bonds yields around 4%. In comparison, stablecoin farming can offer returns from 4% to over 15% APY, drawing both retail and institutional investors.

Stablecoin yield farming involves lending or staking crypto assets in decentralized finance protocols to earn rewards. These platforms generate returns either by lending out assets (similar to banks) or by offering high yields to attract deposits. Some platforms also use the crypto for liquidity pools that enable trading.

Best Stablecoin Yield Platforms

We’ve listed below some of the high-yielding stablecoin platforms. We’ve compiled a list of both centralized and decentralized platforms.

Philippine Digital Asset Exchange (PDAX)

PDAX is a locally registered virtual asset service provider (VASP) and crypto exchange. It’s Hold and Earn offers users 10% annual percentage yield (APY) on stablecoins such as USDT and USDC.

To qualify for the program, you must be a Level 2 verified user and make a qualifying transaction such as Buy/Sell Crypto, Buy/Sell Bonds, and filled limit order transactions.

Coins.ph

Coins.ph is one of the longest running VASPs in the Philippines with over 18 million users. The local exchange is currently operating its PHPC earn campaign where users can earn 8% p.a. on their PHPC. This is the only local currency-denominated stablecoin yield program.

There is a maximum cap of PHP100,000 for each user. Any PHPC amount exceeding the limit will not earn interest.

Hyperliquid

Hyperliquid is a high-performance Layer 1 blockchain and decentralized trading platform, specifically built for decentralized finance (DeFi). It focuses on on-chain perpetuals trading with a fully on-chain order book.

The Hyperliquidity Provider (HLP) vault runs market making strategies for the platform’s trading. You can participate in HLP by depositing USDC. The current rate is 10% p.a.

Hydration

Hydration is an emerging DeFi platform on Polkadot. Users can trade and borrow cryptocurrency from the platform.

Its stablecoin liquidity pool (2-Pool) consisting of USDT and USDC offers 18.93% p.a. paid out in Polkadot (DOT) and Hydration (HDX) tokens.

Morpho

Morpho is a rising open infrastructure for onchain loans, operating on Ethereum and Base networks. The platform has gathered USD4.2 billion in crypto deposits.

The platform’s USDC stablecoin vaults offer 4% to 8% per annum.

Risk Disclaimer

While stablecoin programs’ high returns are attractive, remember that stablecoin investments carry more risk than traditional financial products.

Unlike traditional bank deposits, the government does not regulate DeFi platforms. Stablecoins are held in platforms that do not support depositor insurance such as the PHP1 million protection from the Philippine Deposit Insurance Corporation (PDIC). The DeFi platform can disappear overnight and you may not recover any funds.