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Are you still afraid to hold large amounds in USDC ?

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What I mean is keeping my funds in USDC rather than in some other highly‌ volatile crypto. I’ve been reading a lot about DAI, some claim it’s the safest compared‍ to USDC and USDT, but I’m not completely sure.

The funds will be sitting still⁠ for a few months, and I need to be certain that the full amount is⁤ available when it's time to make the investment.
 
Deposit it into AAVE, have it wrapped, or use USDS (new DAI).

Depositing into AAVE‌ you generate yield, but also you hold a new token that represents the AAVE USDC‍ (aUSDC/avUSDC), which cannot be frozen, and the original USDC are pooled into the lending system.⁠

Having it wrapped pools the USDC with others and you have a token that represents⁤ the underlying asset, in this case, USDC, and it can't be frozen.

USDS is the⁣ new DAI, you can get it by depositing USDC at a 0% fee, and it⁢ cannot be frozen.
 
Wow, I’ve got to admit, I don’t understand a thing about what you’re explaining. I‌ get that you’re suggesting another crypto coin, but how all of that is supposed to‍ work is totally beyond me.
I think this definitely calls for a beginner friendly guide!⁠

For example, can what you’re suggesting be stored on a Ledger or Trezor wallet? That’s⁤ what I personally use.....
 
First, AAVE is a decentralized lending⁣ protocol that as of right now has around $20B worth of coins on it (collateral,⁢ deposits, etc), that's why I said this one and not another one. You can deposit︀ your USDC on it, which gives you a new token called avUSDC (may vary depending︁ on blockchain), which is a yield bearing token of the USDC you originally deposited and︂ can be swapped back to USDC at any time. avUSDC cannot be locked/frozen, and the︃ underlying USDC is pooled/lent out, so while it can be frozen, it makes no sense︄ to freeze as it'd freeze the whole protocol. So doing this you protect your USDC︅ from being frozen, but at the same time you risk it by lending it out,︆ possible protocol vulnerabilities, etc.

USDS is a token that is backed by other assets such︇ as BTC, ETH, USDT, USDC, etc, generally stable assets as well as some real world︈ assets like bonds. It has a value of $1 and it has a whole system︉ behind it to keep it there, however, there's always risk of failure although it is︊ very unlikely. You can swap your USDC for USDS at 0% fee (just gas fees)︋ using their website, and USDS as far as I know cannot be frozen. It can︌ be swapped back to USDC at any time too, and even convert it to sUSDS︍ which is made by the same people and yields 4.5%.

Ledger's and Trezor's just store︎ a key, you can store any token on them, maybe not natively on their own️ applications, but using Metamask or Rabby, you can add anything.
 
That was an absolutely fantastic and detailed explanation, really helpful and something I can actually‌ work with.

I’ll see if I can figure out how to store my tokens on‍ one of these devices using MetaMask.
Honestly, I used to think they were some kind⁠ of scam.
 
Be really careful with what you do though,⁤ a single wrong contract interaction or malicious signature can make you lose pretty much everything⁣ you have on that wallet. I'd usually fully go against doing this (for safety reasons),⁢ but if you need help, DM me. Whatever you may ask me, confirm with others︀ before/after, and use google too just in case
 
Here an up-to-date‌ (?) list of the yield generating stable coins (and the yield sources).
Nevertheless, don't forget‍ what happened with LUNA. Stuff like that will happen again.

1.Ethena Labs (USDe / sUSDe)⁠

Ethena maintains the value of its stablecoin and generates income through delta-neutral hedging.

USDe is⁤ minted by depositing staked ETH (stETH) into the Ethena protocol. Subsequently, this ETH position is⁣ hedged through shorting.

In addition to the yield from stETH (currently an annual interest rate⁢ of 2.76%), the positive funding rate from shorting also generates income, which Ethena distributes to︀ those who stake USDe for sUSDe (annual interest rate of 5%).

2.Spark (sDAI)

sDAI is generated by depositing︄ DAI into Maker's DAI Savings Rate (DSR) contract. The current annualized return is 3.25%.

Earnings are accumulated through the interest of the DSR (interest rate determined by MakerDAO). sDAI can︅ also be traded or used in DeFi like other stablecoins.

3.Ondo Finance (USDY)

Ondo issues︆ USDY with USDC deposits. The deposited assets are used to purchase low-risk assets such as︇ treasury bills (approximately 4 - 5% annual interest rate), most of the interest is shared︈ with USDY holders.

The yield of USDY is set monthly and remains stable throughout the︉ month. This month's annualized return is 4.25%.

Note: The yield of USDY is reflected in︊ the token price, not in quantity. This is why USDY is always above 1 dollar.︋

4.BlackRock (BUIDL)

BUIDL stablecoins represent ownership of tokenized money market funds (MMF) managed by BlackRock.︌

The fund invests in cash and other instruments, such as short-term treasury bills and repurchase︍ agreements, and allocates interest to BUIDL holders.

The fund's yield is calculated daily but distributed︎ monthly to BUIDL holders.

5.Figure Markets (YLDS)

YLDS is the first yield-generating stablecoin registered as️ a public security with the U.S. SEC.

Figure Markets earns income by investing in the‌ same securities held by high-quality money market funds (MMF), which carry higher risks than tokenized‍ government-supported money market funds (MMF).

YLDS offers an annual interest rate of 3.79%. Interest accumulates⁠ daily and is paid monthly in USD or YLDS tokens.

6.Sky (USDS / sUSDS)

USDS is a renamed version of DAI, which can be minted by depositing eligible assets through⁤ the Sky Protocol.

It can be used in DeFi and can also earn income through⁣ the Sky Savings Rate (SSR) contract from the Sky Protocol. sUSDS is issued based on⁢ USDS deposits with an annual interest rate of 4.5%.

7.Usual (USD0)

USD0 is entirely backed︀ by real-world assets (RWAs) such as treasury bills and is minted by depositing USDC or︁ eligible RWAs as collateral on the Usual platform.

Users can also stake USD0 on Curve︂ to obtain USD0++ (annual interest rate of 0.08%). USD0++ can be used in DeFi, and︃ yields are distributed in USUAL tokens (annual interest rate of 13%).

Note: To earn USD0++︄ yields, a staking period of 4 years is required.

8.Mountain Protocol (USDM)

Mountain Protocol generates︅ income by investing in short-term U.S. Treasuries, but USDM is specifically for non-U.S. users.

The income from these U.S. Treasuries is allocated to USDM holders through a daily adjustment system,︆ so the balance automatically reflects the earned income.

USDM currently offers an annualized return of︇ 3.8%.

9.Origin Protocol (OUSD)

OUSD is minted by depositing stablecoins such as USDC, USDT, and︈ DAI on the Origin Protocol.

Origin deploys collateral into low-risk DeFi strategies, generating income through︉ lending, liquidity provision, and trading fees. These earnings are automatically adjusted and distributed to OUSD︊ holders.

OUSD is backed by stablecoins with an annual interest rate of 3.67%.

10.Prisma Finance︋ (mkUSD)

mkUSD is supported by liquidity staking derivatives. Earnings are generated through rewards from the︌ underlying staked assets (2.5% - 7% variable annual interest rate) and distributed among mkUSD holders.︍

mkUSD can be used for liquidity mining on platforms like Curve and can also be︎ staked in Prisma's stable pool to earn PRISMA and ETH rewards from liquidations.

11.Noble (USDN)️

USDN is supported by short-term treasuries. Income comes from interest on short-term government securities and‌ is allocated to USDN holders (annual interest rate of 4.2%).

Users can earn base income‍ by depositing USDN into a flexible vault or earn Noble points by depositing it into⁠ a USDN lockup vault (maximum lockup of 4 months).

12.Frax Finance (sfrxUSD)

frxUSD is backed⁤ by assets from BlackRock's BUIDL, generating income through leveraging its underlying assets (such as treasury⁣ bills) and participating in DeFi.

The yield strategy is managed by the Benchmark Yield Strategy⁢ (BYS), which dynamically allocates staked frxUSD to the highest-yielding sources, allowing sfrxUSD holders to obtain︀ maximum yields.

13.Level (lvlUSD)

lvlUSD is minted by depositing and staking USDC or USDT. These︁ collaterals are deployed in blue-chip lending protocols such as Aave and Morpho.

Users can stake︂ IvIUSD in exchange for sIvIUSD to enjoy the benefits brought by DeFi strategies.

The annual︃ interest rate is 9.28%.

14.Davos (DUSD)

DUSD is a cross-chain stablecoin that can be minted︄ using sDAI and other liquid collateral. It generates income through re-staking derivatives and distributes the︅ earnings from the underlying assets to DUSD holders.

DUSD can be deposited into liquidity pools︆ or vaults, or staked on Davos for an annual interest rate of 7-9% and lending︇ interest income.

15.Reserve (USD3)

USD3 is minted by depositing PYUSD on Aave v3, depositing DAI︈ on Spark Finance, or depositing USDC on Compound v3.

The income generated by allocating collateral︉ to leading DeFi lending platforms will be distributed to USD3 holders (annual interest rate of︊ about 5%).

The Reserve Protocol provides over-collateralization for USD3 to prevent depegging.

16.Angle (USDA /︋ stUSD)

USDA is minted by depositing USDC. The income from USDA is generated through DeFi︌ lending, treasury bills, and tokenized securities trading.

USDA can be deposited into Angle's savings solution︍ to obtain stUSD. stUSD holders can earn income generated by USDA (annual interest rate of︎ 6.38%).

17.Paxos (USDL)

USDL is the first stablecoin to provide daily yields under a regulatory️ framework. Its income comes from short-term U.S. securities held in the Paxos reserve, with a‌ yield of about 5%, and USDL holders automatically receive USDL's earnings.

18.YieldFi (yUSD)

yUSD is‍ backed by stablecoins and can be minted by depositing USDC or USDT on YieldFi (annual⁠ interest rate of 11.34%).

YieldFi generates income by deploying collateral through delta-neutral strategies, while yUSD⁤ can be used in DeFi strategies such as lending and providing liquidity on protocols like⁣ Origin Protocol.

19.OpenEden (USDO)

USDO is backed by tokenized U.S. Treasuries and money market funds⁢ (such as OpenEden's TBILL).

Its underlying assets are invested through on-chain and off-chain strategies to︀ generate yields. Returns are distributed to USDO holders through a daily rebase mechanism.

The underlying︁ assets are invested through on-chain and off-chain strategies to generate income. This income is distributed︂ daily to USDO holders.

20.Elixir (deUSD / sdeUSD)

Similar to Ethena's USDe, deUSD's yield comes︃ from its investments in traditional assets like U.S. Treasuries, as well as the funding rates︄ generated from lending within the Elixir protocol.

Users who stake deUSD for sdeUSD can earn︅ an annual return of 4.39% and double potion rewards.
 
I already mentioned it several times. KRAKEN still give you 6.5% on your USD (fiat)‌ if you lock them for 30days. Otherwise 4.25%.
 
Theres a risk⁣ since you already have funds in a CEX.
That money isnt yours. If you dont⁢ maintain a wallet with your passphrases, youre not the real owner of these cryptocurrencies.

In any case, bankruptcy or theft of funds from the exchange directly affects you, if those︀ coins have been involved in chains of other types of transactions that dont directly involve︁ you, but are funds from any illicit activity, they can freeze them.

USDC is a︂ digital dollar managed by Coinbase, which in turn is a CEX, a centralized exchange.
They can block USDC without any explanation or timely reason. This isn't unique to Coinbase. Kraken,︃ Binance, and all centralized exchanges, as you are not the real owner of the funds,︄ they have the legitimacy to block or freeze them.

Coinbase, in particular, is governed by︅ US regulations in all its aspects, and USDC is specifically backed "supposedly 1 to 1︆ with the US dollar" in assets, bonds, and public funds certified by renowned accounting firms.︇

If Coinbase did not follow the US governments dictates, it would not be permitted to︈ license these types of products in US

USDT, on the other hand, is not regulated︉ and currently has the possibility of restrictions on its use in the US in the︊ future.
It is under investigation and the US Congress is considering the possibility of restricting︋ its use in the country, it is all about interests.
This is also happening with︌ USDT in Europe, because it is not regulated in Europe specifically because it does not︍ comply with MiCA legislation in Europe
 
Why US Vpn? just yes, since‍ MICA, you have to be 'outside' EU countries. but no need US VPN or US⁠ residency.
 
Oh really? How‌ do you explain that 1% of USDT supply is frozen while 1.7% of USDC supply‍ is currently frozen?
(That makes even Wise and Revolut look safer! At least they give⁠ back your money after having them frozen...)

This is even worse than just holding USDC.

Exactly, the whole protocol can︃ be frozen. Coinbase wouldn't be interested in this at all, as this Protocol lending system︄ is not a competitor for them. Oh wait, they are!
 
and what do you suggest as an good alternative for people not so techy as‌ most here?
 
It is really hard to find a good‍ solution. Everyone needs to decide what is best for his own situation. Bitcoin is the⁠ only thing that cannot be frozen but if you believe crypto will fall in the⁤ next 12 months you probably need to make a sub optimal solution with diversification.

But to just claim things like DAI or some protocols are a better solution is dangerous⁣ and shows lack of knowledge. In my opinion they increase the risks. Be aware of⁢ the risks with USDC and USDT and consider other solutions as well.
 
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