Investing in stablecoins or Solana’s native Liquidity stake Token may not be as exciting as looking for the next groundbreaking Token, but it can provide a reliable way to make money.

Stablecoins provide price stability, while LST allows you to earn basic stake rewards while maintaining Liquidity. Through Decentralized Finance platforms such as Kamino, Drift, and Save (formerly known as Solend), you can use stablecoins and LST to increase your earnings through Yield Farming strategies.

Whether you prefer passive low-risk returns or are willing to take on higher risks for greater rewards, this article will break down the best opportunities for leading stablecoins like USDC and PYUSD, as well as Solana’s leading LST, to help you find the best match for your risk profile.

US Dollar Stablecoin

Stablecoins on Solana have experienced explosive rise in this market cycle. While USDC dominates on-chain, which is a unique phenomenon compared to Tether’s USDT, Paypal’s PYUSD has experienced explosive rise after its recent launch, thanks to the rewards from the Decentralized Finance protocol.

These stablecoins provide a relatively low-risk option for Yield Farming in Decentralized Finance protocols such as Kamino, Drift, and Save (formerly known as Solend). Whether you are looking for stable returns or higher risk-reward schemes, these assets are essential choices for those looking to hedge market fluctuations and achieve stable returns.

USDC

Kamino

Kamino Finance provides a variety of income options for USDC holders. Its main pool treasury currently offers an annual interest rate of about 3.5%, lower than its historical range of 6-9%, but still reliable, providing passive, low-risk returns. For higher returns, Kamino’s altcoin pool offers an annual USDC interest rate of about 7.5%, while the JLP (Jupiter Liquidity Provider) pool offers an annual interest rate of about 6.6%. Its concentrated Liquidity strategy makes it an ideal choice for users looking to balance risk and higher returns.

Drift

The trading protocol Drift also allows users to earn income by lending USDC. Although the yield here is moderate, about 3-4%, far below the previous high point, they provide a stable, low-risk opportunity for those not seeking aggressive risk. In addition, the income provided by Drift’s insurance fund is much higher, currently about 15%, coming from trading, borrowing, and liquidation fees, but with greater risk as it serves as the protocol’s backstop for solvency.

Save

The Algorithm lending platform Save offers an annual interest rate of 4-5% for USDC loans in its main pool. The platform also has other permissionless pools that are not deployed by the protocol, such as its JLP/SOL/USDC pool, which currently offers an annual interest rate of 8.5% for those willing to participate in higher-risk Liquidity strategies.

PYUSD

Kamino

PYUSD is a newcomer to the Solana ecosystem, but it has gained momentum due to Kamino’s active yield strategy. Although the initial yield was as high as 30%, the subsequent yield has stabilized at around 7%, making it the highest among Kamino’s stable treasury pools. Kamino has also just added PYUSD to the JLP (Jupiter Liquidity Provider) pool, with a yield higher than its main treasury, at around 8.5%.

Drift

The yield of the Drift lending treasury is slightly higher, around 10%, making it an attractive option for PYUSD. Additionally, Drift offers an annual interest rate of approximately 18.5% in its insurance fund, but please remember that this comes with higher risks.

Save

The PYUSD main pool yield of Save is currently about 12%, and it seems to have increased recently, while the yields of Drift and Kamino are decreasing. If this trend continues, Save may be the best platform for users who want to use PYUSD without taking on additional risk.

LST Yield

Liquiditystake token (LST) is an important part of Solana’s stake economy, allowing users to stake SOL while retaining Liquidity for use in a wider range of Decentralized Finance ecosystems. The three largest LSTs by market capitalization on Solana - Jito’s JitoSOL, mSOL from well-known Marinade Finance, and JupSOL provided by Jupiter exchange in partnership with Sanctum - offer basic yield rewards for staking at around 7.5%, 8.12%, and 8% respectively, with additional opportunities to amplify these returns through Decentralized Finance (especially on Kamino).

For each of these LSTs, additional returns can be obtained through Kamino’s primary treasury or leverage strategy. The primary treasury provides passive rewards on top of basic stake rewards, while the leverage strategy offers higher returns for those willing to take on more risk.

JitoSOL

Main Treasury Income:

Kamino provides a moderate yield of 0.04% for the primary insurance pool provided by JitoSOL, which adds passive income to the basic stake rewards. This option is suitable for those seeking stable, low-maintenance returns.

Leverage Earnings:

For users looking to maximize returns, Kamino offers leveraged yield options for JitoSOL, which can provide higher returns, currently up to 10.5%. This strategy uses leverage to amplify returns, but if these derivative assets depeg, the risk will increase compared to holding LST alone.

mSOL

Main Treasury Income:

Kamino’s mSOL main treasury offers a 0.11% yield, slightly enhancing the basic stake rewards through passive Decentralized Finance returns. This treasury is ideal for earning additional income while holding mSOL for the long term.

Leverage Earnings:

For those who are not afraid of risks and want to increase returns, the Kamino leveraged stake strategy for mSOL can push the yield to as high as about 14.5%.

JupSOL

Main Treasury Income:

The main vault yield of JupSOL on Kamino is 0.02%, providing a small additional return on top of the basic stake rewards. Although the yield is low, it provides a stable passive income source for JupSOL holders who want to sleep soundly at night.

Leverage Earnings:

The leverage JupSOL pool on Kamino has the highest yield, approximately 14.7%. By leveraging stake in Decentralized Finance, users can obtain substantial returns. This strategy is particularly suitable for those who wish to maximize stake earnings while taking on higher risks.

Summary

In conclusion, stablecoins and LST on Solana provide various Yield Farming opportunities, allowing users to increase the most mature or stable assets according to their risk tolerance.

PYUSD currently offers the highest yield opportunities among stablecoins, especially on platforms like Drift, with an APY of up to about 18%. In terms of liquidity stake, JupSOL and mSOL currently have the highest leverage yield of about 15%, providing substantial returns for those willing to take on the risks of leveraging strategies. However, it is important to monitor these vaults as their yields may fluctuate periodically.

Whether you choose the lower risk Stable Coin vault or the higher risk LST farming strategy, there are plenty of opportunities to get your assets involved in Solana’s Decentralized Finance ecosystem.

Original link