Stablecoins aren’t just for parking crypto profits and hedging volatility anymore: they’re now yield machines powering this year’s booming DeFi landscape. With the sector exploding to a $15B market cap for yield-bearing stables, savvy farmers are stacking APYs from synthetic dollar protocols that utilize delta-neutral strategies to source yield from tokenized Treasuries, ETH staking, and arbitrage.
But seeking the highest returns means picking protocols that score highly for liquidity and security coupled with sustainable yields that will deliver steady returns whatever the market outlook. Based on total value locked (TVL) and supply metrics, the following five protocols deliver high stablecoin APYs. These leaders offer yields you can layer by utilizing their respective staking tokens to claim even more rewards through activities such as staking, LP’ing, and locking into dedicated stablecoin vaults.
Falcon Finance (USDf)
Falcon’s dual-token system (mint USDf with stables or crypto collateral, then stake for sUSDf) has propelled it to $1.5B TVL in staked assets. Yield available for staking USDf currently stands at a very respectable 8% APY sourced from basis spread arbitrage and funding rates, while upcoming RWA integrations such as T-bills and gold should further boost this number.
Falcon is an attractive option for high stablecoin APY, on account of its multi-collateral flexibility (more than a dozen tokens supported) and plans for L2 expansion to Arbitrum and Solana. Farmers love looping sUSDf into Morpho or Pendle for yield boosts, while the ability to deposit stables such as USDT and USDC enables maximum borrowing without liquidation risk. Falcon has emerged seemingly out of nowhere in 2025 to become a dominant synthetic stablecoin player as users take their fill of its high yield and enjoy its wide DeFi integrations.
Ethena (USDe)
Despite facing stiff competition from the likes of Falcon, Ethena remains the market leader – for now at least – with its USDe stablecoin boasting a $12.6B market cap. By staking USDe, you get sUSDe – a liquid token that accrues value from short perpetual futures funding rates and staked ETH yields. Base APY currently sits at around 5.5%, but there are opportunities to increase this through utilizing sUSDe within other DeFi protocols.
sUSDe’s composability means it can be deposited into Morpho for extra lending rewards or Pendle vaults for leveraged plays. Recent expansions to Avalanche and TON have supercharged adoption, resulting in USDe and its yield-bearing sUSDe counterpart becoming DeFi staples. Ethena has written the playbook that other synthetic dollar protocols have followed and its shadow still looms large over the sector.
Sky (USDS)
Formerly MakerDAO, Sky’s rebrand unlocked USDS minting from ETH or stables, with sUSDS staking via the Sky Savings Rate (SSR) delivering an attractive APY compounding seamlessly in your wallet. With a market cap that exceeds $5B, USDS boasts deep liquidity and governance perks such as SKY token rewards for stakers.
Sky’s DeFi protocol is battle-tested in terms of security – its dev team are some of the best in the biz – while instant redemptions make USDS a good option if you’re wanting to stack yield but might also want your capital back in a hurry should a better opportunity materialize elsewhere. While sUSDS yields are lower than those of some of the protocols profiled here, its flexibility and versatility make Sky a stablecoin solution you can rely on whatever the weather.
Ondo Finance (USDY)
Ondo’s USDY tokenizes U.S. Treasuries for an APY that currently stands at 4%, backed by short-term bonds and deployed across 10 chains with $1.5B TVL. There’s no delta hedging here: just steady TradFi yields with DeFi composability. Recent Stellar and Sei launches have enabled cross-border payments with yield baked in, making it perfect for global treasury management.
USDY holders can supply to stablecoin vaults for layered APY or use as collateral on lending protocols. Its low-risk appeal draws institutions, but the APY caps below crypto-native plays. Still, it’s great for diversified, sleep-easy farming and attainable yield should increase as more RWA sources are plugged in.
Elixir (deUSD)
Elixir’s deUSD, a fully collateralized synthetic dollar, has a modest $114M market cap but it’s growing steadily and is already integrated into stablecoin AMMs such as Curve, where it can be paired with USDC to earn LPs some of that all-important yield. Elixir is intent on bringing institutional-grade liquidity to real world assets, allowing deUSD stakers able to earn a generous APY of over 7%.
With support from major institutional players such as BlackRock and Hamilton Lane, Elixir is destined for great things, fueled by the mixture of treasuries and funding yield that accrues to its yield-bearing stablecoin. Unsurprisingly, the vast majority of deUSD is staked to take full advantage of the yield that’s further sweetened by a 2x potions boost. Once more DeFi integrations are implemented, there’s every prospect of deUSD giving the sector leaders a run for their money, luring institutions and retail users alike.
Mint ‘n’ Stake
The relative simplicity of synthetic dollar protocols – deposit collateral, mint stables, and stake them for yield with no volatility risk – accounts for why this DeFi vertical has grown so aggressively in 2025. Particularly when you can then take your staked tokens and pool them to compound yields.
While there is always a degree of risk in DeFi – just as there is in TradFi – the low-risk design of yield-bearing stables explains why they’ve become the preferred mechanism for onchain earning. Flexible, permissionless, and non-volatile, these dollar-pegged assets represent the present and future of yield farming.
Source: https://thenewscrypto.com/5-of-the-top-protocols-with-high-stablecoin-apy-in-2025/
