[2026 Latest Edition] DeFi’s Next Hegemony: A Thorough Comparison and Investment Strategy for Yield-Bearing Decentralized Stablecoins

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DeFi (Decentralized Finance) is undoubtedly the flagship product category in the current blockchain industry. In this DeFi market, the hottest attention is currently focused on “Yield-Bearing Decentralized Stablecoins.”

This article will thoroughly compare five major protocols in this emerging stablecoin market, which is rapidly growing against the backdrop of macro regulatory trends, and explain specific strategies on how retail investors should allocate their assets.

Why Decentralized Stablecoins Now? (Macro Background)

Until now, companies like Circle and Tether, which issue the market-leading USDC and USDT, have generated massive profits by investing fiat currency deposited by users in short-term US Treasury bills. Their strength lies in “collecting massive funds interest-free and investing them in high-yielding safe assets,” and these interest rates were secured as their own revenue, never being directly distributed to stablecoin holders.

However, with the “GENIUS Act” passed in the US in July 2025 and the “CLARITY Bill,” which is currently (April 2026) in its final stages, a regulatory environment has been solidified that explicitly prohibits issuers of fiat-backed stablecoins from directly providing yields to holders. This has completely closed off the competitive route for latecomer centralized stablecoins to grab market share using yields as a weapon.

This “prohibition of centralized yields” is exactly what serves as an overwhelming tailwind for “decentralized yield-bearing stablecoins” issued by DeFi protocols.

Since directly holding USDC/USDT yields no returns, funds and institutional investors have begun actively incorporating lending protocols like Aave and yield-bearing stablecoins into their portfolios. Meanwhile, conservative institutional investors are also driving a trend toward “tokenized MMFs (Money Market Funds).”

5 Noteworthy Stablecoin Protocols

Let’s look at the five protocols currently attracting high attention in the DeFi market and their characteristics.

• 1. sUSDe (Ethena): Currently boasts the largest market share and overwhelming name recognition in the yield-bearing stablecoin market. It achieves extremely high native yields through a “delta-neutral strategy” that combines Ethereum staking rewards (LST) with the “funding rate” obtained from perpetual futures short positions on CEXs (Centralized Exchanges). Particularly in a bull market, it functions as the most aggressive revenue engine in the current DeFi market, converting the frenzy of the derivatives market directly into yield.
• 2. Sky (sUSDS) *Formerly MakerDAO: The benchmark for yield in DeFi, rebranded under the “Endgame” strategy. It provides a hybrid of interest from over-collateralized crypto asset loans and yields from RWA (Real World Assets) such as short-term US Treasuries. It has a mechanism to decentrally pass through “RWA yields” — which USDC and others cannot distribute — to users, functioning as a receptacle for conservative funds.
• 3. f(x)Protocol (fUSD / fSAVE): A pure crypto-native stablecoin collateralized by Ethereum’s LST (Liquid Staking Token). It utilizes a model that tranches (separates) the price fluctuation risk of the collateral and disproportionately allocates LST staking rewards to holders. Because it does not rely on perpetual futures funding rates and sources its yield natively from the blockchain, it has low market dependency and low CEX counterparty risk, gaining support from those seeking true decentralization.
• 4. Usual (USD0 / USD0++): An emerging RWA stablecoin that directly disrupts the “issuer monopolizes profits” model of USDC and others. While backed by RWA, the issuer does not exploit the investment returns; instead, it redistributes them to holders as protocol revenue and governance tokens. It possesses the potential to aggressively siphon deposited assets from existing fiat-backed stablecoins.
• 5. Frax Finance (sFRAX): A stablecoin provided by Frax, which has been driving DeFi innovation. Benchmarking short-term US Treasuries and the Fed’s IORB, it operates in the most capital-efficient locations within the DeFi market through its unique AMO (Algorithmic Market Operations) controller to distribute returns. It has built its own financial infrastructure, such as its own L2 and DEX, establishing a robust, independent economic zone that is highly valued even by institutional investors.

[By Purpose] Thorough Comparison Table of Stablecoins

From the perspective of a retail investor executing asset management, we have precisely compared these across three evaluation axes. Please refer to the table that fits your investment style.

Evaluation Axis 1: [Revenue Model and Capacity]

Target: For “income gain-oriented” investors who want to stably operate large fund lots with high yields. Evaluates yield attractiveness, stability against market environments, scalability, and counterparty resistance.

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Analysis: Sky (sUSDS) and Usual (USD0++), which are backed by the US Treasury market and balance yield and scalability, score high. While Ethena offers high yields, its bottlenecks are the ceiling of the derivatives market and its dependence on CEXs.

Evaluation Axis 2: [Resilience and Redemption Structure]

Target: For “defensive” investors whose top priority is “asset defense capabilities” in emergencies, preventing principal loss. Evaluates whether one can reliably recover $1 equivalent on-chain when facing liquidity crunches or TradFi weekend closure risks.

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Analysis: RWA-dependent protocols lose points on weekend risks. As a result, f(x)Protocol, which is LST-backed and completed entirely on-chain, and Frax (sFRAX), which has deep liquidity breakwaters on DEXs, demonstrate robust survival capabilities.

Evaluation Axis 3: [Strategic Fit and Portfolio Characteristics]

Target: For “crypto-native” investors who want to hold as a hedge against macro shocks or for utility within the ecosystem. Evaluates collateral adoption, regulatory resistance, and decentralization.

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Analysis: f(x)Protocol, which is “pure crypto” detached from the fiat currency world and possesses ultimate decentralization and censorship resistance, holds an overwhelming advantage.

For Retail Investors: Stablecoin Core-Satellite Investment Plan

Based on the score analysis above, we propose three portfolios tailored to risk tolerance using the royal road of asset management, the “Core-Satellite Strategy” (a method of separating central defensive assets from aggressive peripheral assets).

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3 Practical Tips for Allocation

To succeed in your strategy, it is crucial to be mindful of the following operational rules:

• Core assets are “absolute trust”, satellites are “agility”: Assets positioned in the core should not be moved frequently, while satellite assets (such as USDe and fUSD) require dynamic management, gracefully evacuating to other stablecoins in response to changing market environments.
• Allocate so that “sources of yield” do not overlap: For example, by combining “USDe (CEX futures dependent)” and “fUSD (on-chain LST dependent)” in your satellites, you can expect a hedging effect where one offsets the risk if the other underperforms.
• Secure an “escape route” during Black Swans: During drastic macroeconomic changes, even with an aggressive portfolio, it is recommended to pre-determine a “cash dash” rule to temporarily return satellite funds to interest-free, highly liquid core assets like USDC.

The content of this report is for educational purposes only and does not guarantee any return on investment. Please make your final investment decisions at your own research and risk.

Thank you for reading!