10 Platforms That Provide the Best Interest Rate on Stablecoins

Discussions concerning stablecoins interest rate are natural if you are in the crypto space for some steady passive income . A good stablecoin interest rate may not be as lucrative as trading, but it is a more reliable source of income. Stablecoin is an indispensable part of a crypto portfolio, so one may as well put them to good use.

We’ve listed the best stablecoin interest rates you can get on various platforms here. It’ll help you start generating passive income.

What are stablecoins?

First, let’s ensure you understand what kind of digital assets are stablecoins.

Stablecoins are cryptocurrencies that are “stable.” Unlike other cryptocurrencies, the value of stablecoins is determined by another asset, such as the U.S. dollar or gold.

Stablecoins can be issued by an entity that backs them up with reserve assets or can be completely decentralized, as in the case of DAI. A stablecoin could have $100 million in reserves and issue 100,000,000 coins at a fixed price of $1 each. Additionally, the reserve can be used to withdraw the actual money if the owner of a stablecoin wants to cash out the coins.

Many cryptocurrencies, including bitcoin, are digital assets that are not backed by any other digital or physical asset. But stablecoins are a middle ground. They are cryptocurrencies that lack volatility and that allow crypto users to reduce risks when trading.

Stablecoin types

There are a few different types of stablecoins. It all depends on the link or pegged to which they are linked:

• Fiat collateralized stablecoins: Fiat-collateralized stablecoins are the most widely used types. They can be pegged to fiat currencies such as the euro, U.S. dollar, or pound. Also, these stablecoins are typically pegged at a 1:1 ratio. In that case, one stablecoin equals one unit of currency. Coming to the examples, Tether (USDT) and the USD Coin (USDC) are two most popular fiat-based stablecoins.
• Crypto-collateralized stablecoins: These are stablecoins that are backed by other cryptocurrencies. DAI is an example. It’s issued by MakerDAO and is overcollateralized with ethereum.
• Commodity-collateralized stablecoins: These coins are pegged to assets like gold. These coins include DigixGold and PaxosGold.
• Algorithmic stablecoins: Algorithmic stablecoins use an algorithm to achieve price stability. The protocol issues more coins as the price goes up and buys them from the market when the price falls.

Top 10 platforms providing the best stablecoins interest rate

If you already know all about stablecoins and decided to play it safe and minimize the volatile cryptos in your portfolio, you might want to generate some stablecoin yield.

Note that these platforms are offering interest for all kinds of crypto assets, but we will be referring to stablecoin interest rates only. All the mentioned platforms can change rates over time, and they might be different at the moment you find this article and sign up on the platform. Usually, newer lending platforms have higher APYs to attract new users.

We’ve done some research and found some really impressive stablecoin yields on both CeFi and DeFi platforms. The main difference between the two types of platforms is the account type. For CeFi accounts, you will need to go through a KYC (Know Your Customer) process. This means that the platforms will ask for an ID and proof of address. DeFi platforms don’t require users to verify their identity and can be accessed by simply connecting your wallet. All the mentioned platforms support the MetaMask wallet.

Here are the top platforms to generate the best stablecoin interest rate.

1. Stargate

Stargate is a liquidity transit protocol. It allows users to exchange native assets cross-chain. But what attracted most of its DeFi users is the option to stake stablecoins and receive rewards in the platform’s native currency, STG.

If you’re looking for a DeFi platform to grant some of the best stablecoins interest rates, then check it out. Stargate has been rapidly rising TVL due to its high APYs on the stablecoin deposits, of up to 7.5% currently.

• TVL: $464 million
• Blockchain: Ethereum, BNB, Avalanche, Polygon, Optimism, Fantom
• Interest rate: 7.05% APY
• Supported stablecoins: BUSD, USDT, USDC

Finally, to get the best stablecoin interest rate on Stargate, stake your stablecoins for one year.

2. OKX

OKX is a crypto and derivative exchange known for its high liquidity spread and industry-leading low user fees. The exchange’s Earn platform offers low-risk deals & flexible terms for savers, as well as solid interest rates for stakers.

It can be tough to feel safe and secure using a centralized exchange in the current crypto market. Here, OKX differentiates itself from many of its competitors. The exchange maintains a 1:1 reserve of all customer assets on its platform, offering full transparency and visibility of its reserves and user funds. Users can verify on-chain wallet holdings and access the exchange’s proof-of-reserves audits.

• TVL: $7.25 billion
• Blockchain: Multiple
• Interest rate: 10% APY
• Supported stablecoins: DAI, TUSD, USDT, USDC

3. ZenGo

Zengo is one of the newer crypto interest account platforms on this list. You can earn up to 8% APY on your crypto deposits, all without any paperwork. There are two ways to earn interest on ZenGo, through a lending account or staking crypto.

When you lend crypto on ZenGo, it happens through their partner Nexo, with the interest calculated and added to your wallet on a daily basis. There is no lockup period, and you can withdraw any time. For staking, you can do so with Tezos (XTZ) via ZenGo’s partner Chorus One.

• Blockchain: Multiple
• Interest rate: ∼8% APY
• Stablecoins supported: Bitcoin (BTC), ethereum (ETH), USD Coin (USDC), tether (USDT), dai (DAI), trueUSD (TUSD), nexo (NEXO), tezos (XTZ), and chainlink (LINK).

4. Nexo

Nexo is the first platform to offer instant cryptocurrency-backed loans and aims to solve inefficiencies in the lending market. You can consider this platform to be a crypto savings account.

To manage loans, the automated lending process uses smart contracts and an Oracle on Ethereum. The oracle creates a loan by transferring cryptocurrency to a Nexo wallet. Consequently, the users receive the funds immediately. When the borrower deposits the funds back, the oracle records the transaction and returns the cryptocurrency to the user.

The platform has a native token, NEXO, which grants special benefits to holders.

• Total assets: $15 billion
• Blockchain: BlockFi is a centralized platform, and there is no need to worry about having your assets on different blockchains or gas fees.
• Interest rate: 10% APY (or 12% APY when the interest is paid in NEXO)
• Supported stablecoins: USDC, USDT, UST, DAI, USDP, TUSD, USDX, EURX, and GBPX

Additionally, to get the best stablecoin interest rate on Nexo, you can use the Nexo interest calculator to simulate your potential earnings for up to three years. Plus, the Interest accrues daily.

5. Balancer

Balancer is an AMM DEX and one of the top DeFi apps on the Ethereum blockchain. The platform allows users to deposit tokens in any of the available investment pools.

Note that you don’t need to have all the assets of the pool to invest in it. Holding only one of the assets is enough. Depending on the pool, the APY varies from 5% to 30%. However, depositing all the assets of the pool in equal values will result in the maximum APY.

After you connect your wallet and choose an investment pool, Balancer will give you an estimate of the potential weekly stablecoin yield based on the last 24 hours.

• TVL: $1.4 billion
• Blockchain: Ethereum, Polygon, Arbitrum
• Stablecoin Interest rate: 6.1% APY
• Supported stablecoins: BUSD, USDT, USDC

You get the highest stablecoins interest rate or APY on Balancer if you stake for one year or more.

6. Crypto.com

Crypto.com is a well-known cryptocurrency exchange that supports a wide range of crypto assets. The company also offers the option to earn a passive income from your stablecoins. However, the stablecoin yield depends on the chosen coin and the type of your deposit.

For instance, Crypto.com app allows users to make a flexible deposit, which has the lowest interest or lock their funds for one or three months.

If you want to benefit from the best stablecoins interest rate, you will have to choose the locked deposits and have over a certain amount of crypto. Deposits of $4,000 or more have the highest stablecoin yield (10%). There are special tiers that generate more rewards.

• Blockchain: Crypto.com is a CeFi platform and users do not have to worry about gas fees.
• Stablecoin Interest rate: 10% APY
• Supported stablecoins: BUSD, USDT, USDC

Choose the 3-month fixed term to get the maximum APY for your stablecoins.

7. Curve

Curve Finance is an automated market-maker protocol that allows stablecoin swapping with low fees and slippage. It is a decentralized liquidity aggregator that allows anyone to provide digital assets as liquidity and earn rewards and fees.

Curve’s pricing algorithm makes it possible to swap tokens within a similar price range. It’s great for trading between stablecoins and different tokenized versions. Curve allows you to switch between different tokenized Bitcoin versions, including WBTC and renBTC.

• TVL: $5.7 billion
• Blockchain: Ethereum, Avalanche, Fantom, Polygon, Optimism, Gnosis, Arbitrum, Harmony, MoonBeam
• Stablecoin Interest rate: 6.5% APY
• Supported stablecoins: USDT, USDC, DAI, GUSD, BUSD, UST, EURS, and sUSD.

Each asset has its own APY, and it evolves, depending on the market’s demand.

8. Compound

Compound Finance is a DeFi lending protocol. Users can deposit cryptocurrency and earn interest or borrow crypto assets against it. Compound utilizes smart contracts to automate the management and storage of cryptocurrency capital provided by users.

What makes Compound special, is the fact that it is a tool that enables suppliers and borrowers to work together in terms of negotiating the terms. The protocol handles collateral and interest rates, while both parties interact directly with it.

Any crypto and stablecoins interest rate on Compound are calculated algorithmically. The protocol adjusts these interest rates automatically based on demand and supply. In addition, COMP token holders can adjust interest rates.

• TVL: $2.8 billion
• Blockchain: Ethereum
• Stablecoin Interest rate: 3.26% APY
• Supported stablecoins: DAI, TUSD, USDC, USDP, USDT

So, how do you get the best stablecoins interest rate on Compound? Each asset has its own APY. The longer you keep your funds locked, the higher the rewards.

9. Aave

Aave is a DeFi protocol that allows people to lend and borrow cryptocurrency from anyone without the need for a central intermediary. Moreover, users earn interest when they lend and the borrower pays interest.

Aave is built on top of the Ethereum network. To process transactions, all tokens on the network use the Ethereum Blockchain. While there is no minimum amount for deposits, the transaction fees on Ethereum might be too high if you want to make a small deposit. Aave is easy to use, even if you haven’t used a DApp before.

• TVL: $6.1 billion
• Blockchain: Ethereum, Avalanche, Polygon
• Stablecoin Interest rate: 3.5% APY
• Supported stablecoins: BUSD, DAI, sUSD, TUSD, USDC, USDP, USDT, UST

Like Compound, each asset has its own APY, and it depends on the period of time the assets are on the platform. This means even on AAVE, the stablecoins interest rate is a function of time.

10. BlockFi

BlockFi is one of the oldest CeFi platforms for lending and borrowing cryptocurrency. It has a reputation as a simple and secure platform. BlockFi has gained a good reputation over the years, and it is often the first platform that people who are new to the crypto space.

BlockFi offers an 8.6% annualized yield on stablecoin deposits. You can see an estimation of your stablecoin interest rate using the BlockFi interest calculator. Although the yield is not the highest, it’s still one of the best stablecoin interest rates, and it has an extremely user-friendly interface.

• Blockchain: BlockFi is a centralized platform, and there is no need to worry about having your assets on different blockchains or gas fees.
• Stablecoin Interest rate: 8.6% APY
• Supported stablecoins: USDC, USDT, GUSD, USDP, and BUSD

So, how do you get the best stablecoins interest rate on BlockFi? You can use the interest calculator to simulate your potential earnings for up to 30 years. The longer you keep your funds locked on the platform, the higher the stablecoin yield will be. The interest is accruing daily, and it is paid monthly in the user’s account.

Why are stablecoin investments safe?

Stablecoin investments are much safer than other crypto investments. However, they are not great investments. Stablecoins are more suitable for in-between trades. Also, they are used for transactions to preserve the value of the portfolio as an alternative to converting digital assets to fiat money.

To secure profits, it is quicker, cheaper, and more convenient to exchange back to stablecoins during crypto trading. Just so you know, you can convert most digital assets to USDT or other stablecoins.

Stablecoins seem like a good option for those who are keen to invest in cryptocurrency but don’t want to deal with volatility. However, you should know the most important aspects of stablecoin investments.

Stablecoins can generate yield courtesy of interest rate

Do not expect stablecoin investments to make a profit. In fact, they are designed to be stable, and their prices don’t fluctuate much. While you can earn a decent stablecoin interest rate by holding your stablecoins long-term, this approach is riskier than saving money.

Even so, you can also make money by lending or staking stablecoins on specialized decentralized finance (DeFi) platforms. You can lend your stablecoins by depositing them on a lending and borrowing platform. The borrower pays a fixed rate per the stablecoin’s interest rate, and you receive the amount of interest corresponding to the period of time you held your stablecoins.

You also can stake your coins and earn the rewards issued by the blockchain, as it uses your funds to keep the network secure. Moreover, any of these earnings are passive income, and it can increase as you increase the amount you want to deposit to the platform.

To generate stablecoin yield, you must borrow and stake your cryptocurrency. However, they require a few extra steps than simply purchasing and holding your investment.

Secondly, as with all cryptocurrencies, stablecoins present some risks. They are not regulated, and the crypto industry has already been involved in lawsuits with financial authorities. For instance, Tether’s executives have been investigated by the U.S Department of Justice for bank fraud.

Can stablecoins interest rate generate steady yield?

CeFi and DeFi platforms with good interest rates can generate a decent amount of yield. If you want to keep a part of your crypto portfolio in stablecoins, then start to think about providing liquidity to one of these lending platforms. Think of these platforms as the new generation of financial institutions that offer a similar service to a bank account.

In conclusion, stablecoins are a great option if you’re looking for a cryptocurrency that can be used as a payment method without extreme volatility. But they are not the best option in terms of an investment. Stablecoins cannot fluctuate in value. However, stablecoins can also be used to make money if you are willing to lend your coins or stake them. Check out any of the aforementioned platforms to start generating some stablecoin yield — via the best stablecoins interest rate options.

The basics of stablecoins rates are fairly easy to understand, but like with all things crypto, the deeper you go, the more there is to process. Learn everything you need to know at the BeInCrypto Telegram group.

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