What are the main sources of stablecoin yield?
Stablecoin yield is the return a holder earns by putting stablecoins to work. Each source pays it from a different place, and that place decides most of the risk.
A tokenized Treasury fund holds short-term US government debt, such as Treasury bills, and passes the interest on that debt through to token holders after fees. The yield tracks short-term US interest rates, so it moves with dollar benchmarks such as SOFR. Buying the token usually means subscribing to the fund, often with stablecoins, and many funds admit only approved holders.
Onchain lending pays interest from borrowers. A depositor supplies stablecoins to a lending market, and borrowers who post crypto collateral pay interest that rises when demand to borrow is high and falls when it is low. In a passive lending market the depositor takes the market's terms as they come. A curated vault adds a vault curator, a team that chooses which markets the vault lends into, sets limits on each and charges a fee for that work.
A private credit vault earns interest on offchain loans, such as financing for invoices, royalties or equipment. A fund makes or buys the loans, and the vault token gives holders a claim on the fund's returns. The interest comes from businesses outside crypto, so returns usually do not move with crypto prices, and withdrawals usually wait for loans to repay or for a scheduled redemption window.
Reward programs pay on top of a base yield. A protocol or an issuer adds tokens or cash to attract deposits for a set period. Rewards can be large while they last, but they end, and when they do only the base yield remains.
How do the sources compare?
| Source | What pays the yield | How quickly capital can leave | Moves with crypto prices? | Main risks | Who can hold it |
|---|---|---|---|---|---|
| Tokenized Treasury fund | Interest on short-term US government debt, after fund fees | Through the fund's redemption process, on the fund's own schedule | Rarely | Fund operations, the issuer and the token's transfer rules | Holders the fund approves, often after identity checks |
| Passive onchain lending | Interest paid by borrowers who post crypto collateral | Usually at once, while the market has cash that is not lent out | Yes | Smart contracts, collateral prices, oracles and a busy market running short of cash | Any wallet the market accepts |
| Curated vault | Interest from the lending markets a curator picks, after the curator's fee | Usually at once, limited by the cash left in the markets the vault uses | Yes, through the collateral | The curator's choices, the markets underneath, oracles and fee changes | Any wallet, unless the vault keeps an allowlist |
| Private credit vault | Interest on offchain loans to businesses | At scheduled redemption windows or as loans repay | Usually not | Borrower defaults, the originator, valuation and the legal claim on the loans | Holders who pass identity checks and sit on an allowlist |
| Reward program | A budget a protocol or an issuer sets aside to attract deposits | Ends on the program's end date, or sooner if the budget runs out | Depends on the token paid | Expiry, changes to the terms and the value of the reward token | Whoever holds the qualifying deposit |
The Key facts box at the top of this page gives current figures for the benchmark rate and for tokenized Treasury and private credit markets, each with its date and source.
The liquidity column matters most under stress. In the curated USDG lending vault examined on 22 September 2026, depositors could take out about $50.3 million the same day, 10.2% of assets, while the ten largest holders held 1.15 times that amount. O2O Vault Brief, Issue 1 sets out the full liquidity picture. In the curated USDC lending vault examined on 9 October 2026, about $10.7 million, 31% of the vault, could not be withdrawn the same day. O2O Vault Brief, Issue 2 shows where that money sat.
What is the difference between base yield and incentive yield?
Base yield is what the underlying activity pays: interest from borrowers, or income from the assets a fund holds, after fees. Incentive yield is paid on top, usually in tokens or stablecoins, from a budget that a protocol, an issuer or a distributor sets aside to attract deposits. The two add up to the headline rate a dashboard shows.
The difference matters because the two parts last for different lengths of time. Base yield lasts as long as the activity behind it. Incentive yield lasts as long as its budget and its end date, and a headline rate can fall sharply on the day a program ends even when nothing else changes.
Data table
| group | pools | tvl_usd_m | base_apy_pct_tvl_weighted | reward_apy_pct_tvl_weighted | total_apy_pct | reward_share_pct |
|---|---|---|---|---|---|---|
| Tokenized Treasury funds | 4 | 2119.6 | 3.52 | 0.0 | 3.52 | 0.0 |
| Passive lending markets | 4 | 1401.3 | 3.64 | 0.0 | 3.64 | 0.0 |
| Curated vaults | 4 | 1230.4 | 4.03 | 2.39 | 6.43 | 37.2 |
| Private credit | 3 | 3660.3 | 5.24 | 0.0 | 5.24 | 0.0 |
| Basis trade | 2 | 1268.3 | 4.93 | 0.0 | 4.93 | 0.0 |
A worked example: on 9 October 2026, a curated USDC lending vault paid depositors about 6.0%. About 4.2% came from lending after the curator's 10% fee, and about 1.8% came from a USDC reward scheduled to run until 31 October 2026, so about 30% of the headline rate had an end date. O2O Vault Brief, Issue 2 traces the split from borrower rates to the depositor.
A second example: on 22 September 2026, a curated USDG lending vault showed depositors roughly 7%. Of that, 4.06 points came from the vault's own lending book and 3.02 points from an incentive with a published end date of 1 July 2027. O2O Vault Brief, Issue 1 explains why borrowers could not pay the full rate on their own.
The mix varies across the market. Across curated vaults in a dataset pulled on 7 August 2026, 3.52 points of a 3.64% weighted APY came from base strategy yield and 0.12 points from token incentives. The August 2026 market structure report gives the method.
How do you benchmark stablecoin yield against SOFR?
SOFR, the Secured Overnight Financing Rate, is the cost of borrowing cash overnight against US Treasury securities. The Federal Reserve Bank of New York publishes it each business day, and it is the usual reference for what dollars earn with very little credit risk.
To benchmark a stablecoin yield, take its base yield after fees on a given date and set it beside SOFR for the same date. The difference, the spread, is what the holder earns for risks an overnight Treasury-backed loan does not carry: smart contract risk, collateral risk, liquidity risk and, for private credit, the risk that borrowers do not repay. A narrow spread means the holder takes those risks for little extra pay. A wide spread raises the question of which risk is being paid for.
Two dated examples show the method. On 22 September 2026, the curated USDG vault's own yield of 4.06% sat about 21 basis points above SOFR at 3.85%. Between 17 September and 9 October 2026, the curated USDC vault's lending yield after fees beat SOFR by about 20 basis points on average. O2O Vault Brief, Issue 1 and O2O Vault Brief, Issue 2 report these spreads.
Set SOFR beside the base yield after fees. A reward can make a thin spread look wide until the day it ends. The Key facts box shows the latest SOFR with its date and source (latest figure and source).
How does a treasury choose among the sources?
A treasury usually starts from what the cash is for, then picks the source whose way of paying fits that purpose:
- Cash that may be needed the same day suits passive lending markets and tokenized Treasury funds with fast redemptions, after checking how much can leave at once under stress.
- A spread over short-term rates, with risk that moves with crypto markets, points to curated vaults, after reading the curator's market list, limits and fees.
- Returns that do not move with crypto prices, with slower redemptions accepted in exchange, point to private credit vaults, after checking the loans, the redemption terms and who prices the token.
- A temporary boost points to reward programs, after checking each end date and what the base yield is without the reward.
Eligibility narrows the list before any of this. Tokenized Treasury funds and private credit vaults commonly admit only holders who pass identity checks and sit on an allowlist, and some limit which kinds of investor may hold the token at all. A treasury should confirm it can hold a token before comparing its yield.
Many treasuries split their cash: a liquid layer for operating needs and a second layer that can wait for redemptions in exchange for a different source of return. The split depends on how much cash the treasury expects to need, and how quickly.
What the comparison leaves out
A comparison by source is a starting point. Before committing cash, a treasury also looks at:
- Fees: management, performance and curator fees, and any cost to enter or leave. Compare yields after fees, and check whether fees can change without notice.
- Smart contract and oracle risk: a bug in the code, or a price feed that misprices collateral, can cause losses that no yield covers.
- Stablecoin risk: the stablecoin itself can lose its peg, and its issuer may be able to freeze it.
- The legal wrapper: what the token gives a claim to, who holds the assets behind it and what the holder can do if something goes wrong.
- Accounting: how the treasury records the token, its yield and any rewards.
For a checklist that walks through these points one vault at a time, see how to evaluate a yield vault.