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.
Two failures that belong in every file
Maple Finance is the case that shows why the source classification is the whole job. Its pools screened near 5%, a modest premium over collateralized lending. The premium was credit compensation: Maple lends to trading firms on reputation, not against posted collateral. In December 2022 one borrower, Orthogonal Trading, defaulted on $36M across eight loans, about 30% of all active loans at the time, and lenders in the worst-hit pool lost roughly 80% of their capital. The borrower had understated its exchange exposure to lenders weeks earlier. Borrower honesty is not observable on-chain, and no dashboard priced it. The rejection is published in full.
Usual's USD0++ shows the other failure mode: the terms themselves. In January 2025 the issuer changed the redemption terms of a token holders believed redeemable 1:1, introducing a floor price of $0.87 by decision. No exploit, no oracle failure, no bad debt. The token repriced to about $0.90, and leveraged holders elsewhere were liquidated by the cascade. A redeemable token is worth its redemption terms, and the terms are a governance variable unless they are immutable. That memo is published too.
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