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Stablecoin-based yield strategies remain a core component of modern digital asset treasury management. In May 2025, market conditions favored conservative and risk-adjusted lending strategies, particularly across Ethereum and Base. Real-world asset platforms also sustained institutional attention due to their structured underwriting and relatively stable returns.
Brava continues to monitor on-chain yield opportunities with a focus on protocol maturity, liquidity depth, and consistency of return. Below is our selection of the top-performing on-chain stablecoin yield strategies in May 2025.
Selection criteria:
- Yield performance over the last 30 days
- Protocol credibility and governance track record
- Total Value Locked (TVL) to assess liquidity depth
The Top 10 On-Chain Stablecoin Yields as of May 2025
1. Aave - Multi-Stablecoin Lending (5-9.9% APY)
Aave continues to lead the stablecoin yield space with consistent returns across USDC, USDT, USDS, and DAI. The protocol's battle-tested lending mechanics provide organic yield through borrower demand rather than artificial incentives. With substantial TVL and proven risk management, Aave represents the gold standard for sustainable stablecoin yields.
Risk Profile: Low to moderate. Established protocol with strong governance and risk parameters.
2. Spark Protocol - Sky Ecosystem Integration (6-8% APY)
As a key subDAO within the Sky Protocol ecosystem (formerly MakerDAO), Spark has emerged as a central hub for DeFi lending. The protocol benefits from the stability of the Sky ecosystem while offering competitive yields on major stablecoins. The integration with USDS provides additional utility for Sky token holders.
Risk Profile: Low to moderate. Backed by the established MakerDAO/Sky ecosystem.
3. Morpho - Self-Custody Compatible (5-9.9% APY)
Morpho's recent integration with Ledger Live marks a significant milestone for self-custody yield solutions. Users can now earn competitive yields while maintaining full control of their assets through hardware wallet custody. This represents the future of DeFi yield—secure, non-custodial, and user-controlled.
Risk Profile: Low. Self-custody with hardware wallet integration reduces counterparty risk.
4. Compound - Legacy Protocol Reliability (4-7% APY)
Compound remains a cornerstone of DeFi lending, offering steady yields through its time-tested governance token incentive system. While APYs may be lower than newer protocols, Compound's long track record and conservative risk management make it attractive for risk-averse users. The Ledger Live integration adds an extra layer of security.
Risk Profile: Low. One of the oldest and most established DeFi protocols.
5. Sky Protocol (USDS/sDAI) - Stablecoin Innovation (5-8% APY)
The rebranded MakerDAO ecosystem continues to innovate with USDS and the yield-bearing sDAI. With $116.98M in TVL, sDAI represents one of the most liquid yield-bearing stablecoins. The protocol's backing by real-world assets and conservative collateral ratios provide stability in volatile markets.
Risk Profile: Low to moderate. Strong fundamentals with RWA backing.
6. sUSDe - Ethena Protocol (8-12% APY)
Leading the synthetic stablecoin category, sUSDe has shown impressive performance with $282.57M in recent activity and $3.66M in the last 7 days alone. Ethena's delta-neutral strategy provides yield through perpetual funding rates, though this introduces complexity and potential risks during market stress.
Risk Profile: Moderate to high. Synthetic mechanisms and delta-neutral strategies carry additional complexity.
7. sUSDS - Sky Synthetic Yield (6-10% APY)
The synthetic version of USDS has gained traction with $75.95M in recent activity. This represents Sky Protocol's foray into more advanced yield strategies while maintaining the stability of their core stablecoin ecosystem. The yield comes from a combination of lending activities and protocol incentives.
Risk Profile: Moderate. Benefits from Sky's stability but adds synthetic complexity.
8. Ledger Live Yields - Hardware Wallet Integration (Up to 9.9% APY)
Ledger's April 29, 2025 announcement of integrated stablecoin yield features represents a paradigm shift. Users can now earn up to 9.9% APY on USDT, USDC, USDS, and DAI while maintaining full custody through their hardware wallets. This integration with established protocols like Aave and Morpho provides institutional-grade security for retail users.
Risk Profile: Low. Hardware wallet custody with established protocol integration.
9. Convex Finance - Curve Amplification (7-11% APY)
Convex continues to leverage rewards for Curve.fi liquidity providers, offering amplified yields through CVX token incentives. While the protocol has a solid track record, yields remain dependent on CVX emissions and Curve's underlying performance. The complexity of the Curve-Convex relationship requires careful consideration.
Risk Profile: Moderate. Dependent on multiple protocol interactions and token incentives.
10. USDY (Ondo Finance) - Real-World Asset Backing (4-6% APY)
Ondo Finance's USDY represents the growing trend toward real-world asset (RWA) backed stablecoins. With $471.39K in recent activity, while smaller than other entries, USDY offers exposure to traditional financial instruments through blockchain infrastructure. The yield comes from underlying treasury and bond investments.
Risk Profile: Low to moderate. RWA backing provides stability but regulatory risks exist.
Insights
May 2025 represents a maturation point for stablecoin yields. The focus has shifted from chasing the highest APY to seeking sustainable, secure yield sources. The integration of hardware wallet custody with DeFi yields represents a significant step toward mainstream adoption.
The key takeaway remains: not all yield is created equal. A 15% APY backed by volatile token incentives may look attractive, but a 7% yield from established lending protocols with hardware wallet custody may provide better risk-adjusted returns.
As the space continues to evolve, we expect further integration between traditional security practices and DeFi innovation. The future of stablecoin yields lies not in maximizing APY, but in optimizing the balance between return, security, and sustainability.
We'll be back next month with the June update, tracking how these trends develop and identifying new opportunities in the evolving stablecoin yield landscape.
This analysis is based on data available as of May 30, 2025, and reflects current market conditions. Yields and protocols can change rapidly in the DeFi space. Users should conduct their own research and consider their risk tolerance before participating in any yield-generating activities.
Disclaimer: This content is for informational purposes only and does not constitute financial advice. DeFi protocols carry inherent risks including smart contract vulnerabilities, regulatory changes, and market volatility. Users should assess their own financial circumstances and risk tolerance before participating in any DeFi activities.
About Brava
Brava is a high-yield cash allocation platform that gives professional investors access to blockchain-based stablecoin credit markets. By routing capital into hundreds of secure, overcollateralised lending pools, Brava delivers automated, transparent, and risk-adjusted yield. Users retain full control of their assets through non-custodial smart vaults. Built for capital allocators, Brava combines institutional-grade infrastructure with next-generation financial access.
