Reader objective
Understand stablecoin yield sources and failure modes.
Separate the stablecoin from the yield venue
The stablecoin has an issuer, reserve or collateral model, redemption path, blocklist policy, and depeg history. The venue adds borrower, smart-contract, oracle, governance, bridge, curator, and liquidity risks. Both must be approved. The chain is a third layer.
Classify the yield source
| Displayed yield | Actual source | Primary question |
|---|---|---|
| Lending rate | Borrower interest | Collateral and utilization |
| Tokenized cash yield | Reserve or fund income | Claim, fees, redemption |
| Private-credit token | Borrower credit spread | Default and recovery |
| Reward APY | Token emissions | Duration and sell pressure |
Why a high rate can be an exit warning
In utilization-based lending markets, supply rates commonly rise as borrowed liquidity consumes the pool. The same condition that produces the attractive rate can reduce what suppliers can withdraw. Record both the rate and currently available liquidity, then stress an exit larger than one client’s position.
Minimum monitoring record
- Base yield and reward yield shown separately
- Trailing period and observation timestamp
- Withdrawable liquidity and utilization
- Asset issuer and freeze authority
- Venue, oracle, bridge, and curator dependencies
- Depeg and redemption triggers
Continue with on-chain liquidity.
Primary and reference sources
- Crypto Assets — Investor.gov
- Crypto Assets — FINRA