Yield Bearing Stable Map

Mapping the stablecoin landscape

It is abundantly clear that stablecoins have clearly found product market fit in defi. With over $300 B floating across chains under various tickers set to go to $ 800-2000 B in the next 5 yrs we are all set for an explosion. In this scenario it is important to understand how the exisitng crop of stables are designed, their purpose and the kind of world they are building.

Of the $300B, less than 10% ($19B) are yield bearing with having distributed ~ $250 M to holders so far. Yield sources for these stables exist on a spectrum. Starting from tokenized US Treasuries to delta neutral strategies of liquid crypto assets to money market funds and now slowly RWAs like real estate loans, AI infra and energy infra.

Today majority of the yield from these stables is delivered either from US treasuries or from delta neutral positions of top crypto tokens. This makes the space highly dependant on the American economy, their president and the FED chair or the highly volatile/cyclical nature of crypto for a source of yield. Our thesis is that as the ecosystem grows, demand for a third source at scale will emerge. One that is neither dependant on US or on the cyclical nature of crypto, one that can scale and can provide consistent, high, uncorelated yields. As the landscape stands we can see loans against real estate (FIGURE) & AI infra (USDai) have started addressing this need.

We hope to provide a third option with K1 that is sourcing yield from projects generating & distrbuting energy across the world.

For a deeper dive into the stablecoin landscape we recommend going here - https://www.stablewatch.io/analytics/ybs-overview?categories=rwa-backed&categoryMode=OR&chainMode=OR