In recent years, the decline in financial investment returns has made stablecoin financial management a new choice.

In the past two years, finding suitable financial products has become increasingly challenging. Bank interest rates have continued to decline, and the yields on government bonds and money market funds are even unable to outpace inflation. The expected returns on insurance financial products are also quietly decreasing. For investors hoping to achieve asset appreciation, the generally 1% return rate found in traditional financial management apps fails to ignite enthusiasm.

Although we seem to live in an era with an unprecedented variety of financial products, methods for achieving stable profits have become increasingly scarce. Against this backdrop, a new form of wealth management—on-chain wealth management based on stablecoins—is gradually coming into the view of more people.

The Appeal of Stablecoin Wealth Management

A stablecoin is a digital asset that is pegged to a fiat currency. Although it does not have the price volatility of Bitcoin, it primarily serves a function similar to "digital cash." Stablecoin wealth management refers to users lending, staking, or investing idle stablecoins on the blockchain or related platforms to obtain corresponding annualized returns.

The logic behind this investment method is not complex, similar to how banks use deposits to lend and earn interest spreads. The difference is that in the blockchain world, this "interest spread" is more transparent, and the distribution of returns is more reasonable. Currently, common stablecoin investment products mainly include lending, staking, and fixed income products.

According to statistics, in the first half of this year, the annualized interest rates of USDT/USDC in mainstream decentralized finance lending protocols mostly fluctuated between 2.5% and 4%. Some platforms offer total annualized returns that may exceed 8% through liquidity mining or reward mechanisms, but this usually comes with higher volatility and locking requirements. In contrast, fixed income products, although not the highest in yield, show a steady increase overall, with a maximum of around 5%. These products have become the first choice for many users in on-chain financial management due to their stable returns and lower thresholds.

What is even more noteworthy is that the flexibility and user experience of these products are rapidly improving. Users only need to hold stablecoins, choose the platform and product type, and they can subscribe with one click. Some platforms also support instant deposits and withdrawals, with interest calculated daily. This operational mode is as convenient as Yu'ebao, while also providing interest close to that of U.S. Treasury bonds; it is as stable as a fixed deposit, yet without early redemption penalties. This "stability with flexibility" experience is the ideal financial management state for many users.

Comparison of Stablecoin Financial Management and Traditional Fixed Income Products

Compared to fixed-income products in traditional financial markets, stablecoin wealth management has the following advantages:

1. Higher yield: The annualized return is usually between 3% and 5%, with some products even reaching over 8%.
2. High flexibility: Most products support deposit and withdrawal at any time, with interest calculated daily, without the need for lock-up or setting a yield period.
3. High transparency: Most platforms disclose the sources of income, risk descriptions, and the flow of funds, with some even verifying the safety of funds in real-time through on-chain data.
4. Reasonable profit distribution: The platform no longer "eats the interest spread", but instead distributes the actual lending or matching profits proportionally to the investors.

Sources of Stablecoin Financial Management Returns

The returns from stablecoin wealth management mainly come from three aspects:

1. On-chain lending interest: The platform lends the user's locked stablecoin to other users to generate income.
2. Staking rewards or node income: especially in Staking-type products.
3. Profit distribution for participating in options or yield layering strategies.

For users, as long as the platform's product structure is open and transparent, and asset custody is secure, it can be regarded as a "quasi-fixed income product" on the blockchain.

The Development Trend of Stablecoin Wealth Management

Currently, the on-chain active addresses of stablecoins continue to grow. Although there is no clear statistic on the number of users participating in stablecoin financial management, the scale is rapidly expanding based on on-chain activity and capital inflow. Especially in regions such as Southeast Asia, Latin America, and the Middle East, where local currencies are unstable and financial system coverage is insufficient, stablecoins have become an important means for residents to avoid local currency depreciation and obtain returns on dollar-denominated assets.

It is worth noting that institutional funds are also continuously entering this field. Insurance companies, family offices, and funds have included stablecoin management in their liquidity management tools as part of their dollar asset pools. This trend drives platforms to continuously upgrade in terms of risk control, transparency, and compliance, providing individual users with a more mature product environment and service experience.

Risk Warning

Although stablecoin investment has many advantages, risk identification remains crucial as an emerging field. Some stablecoins may face depegging risks due to issues such as liquidation mechanisms and anchor asset management. Additionally, factors such as smart contract audits and security measures can also affect fund safety.

For ordinary users, it is recommended to choose leading platforms or products from regulated institutions, prioritizing stablecoin financial management methods with clear yield structures and flexible redemption support. A cautious attitude should be maintained towards products with annualized returns exceeding 10%, avoiding blind pursuit of high yields. Stability, transparency, and compliance are key prerequisites for long-term participation.

Conclusion

In the current low interest rate environment, stablecoin wealth management provides users with more robust investment options. While it's not necessary to fully immerse oneself in the crypto world, through stablecoins, investors can have a transparent, secure "digital savings account" with an annualized return of about 5%. In times of uncertainty, this may be a certainty return method worth considering.