Are you still afraid to hold large amounds in USDC ?

[brianK]

It’s been about a year since I read a thread here on OCT where some users mentioned that USDC could be frozen by authorities, and that the first several thousand wallets had already been frozen or seized.

However, I haven’t really been able to find anything recent or concrete about it.

Do you guys still consider it too risky to hold, say, $500K to $1M in USDC?

 

[void]

It’s been about a year since I read a thread here on OCT where some users mentioned that USDC could be frozen by authorities, and that the first several thousand wallets had already been frozen or seized.

However, I haven’t really been able to find anything recent or concrete about it.

Do you guys still consider it too risky to hold, say, $500K to $1M in USDC?

if "holding" means any period longer than necessary to process a transaction on stablecoin rails then it's risky - why would anyone do that?

 

[wellington]

It’s been about a year since I read a thread here on OCT where some users mentioned that USDC could be frozen by authorities, and that the first several thousand wallets had already been frozen or seized.

However, I haven’t really been able to find anything recent or concrete about it.

Do you guys still consider it too risky to hold, say, $500K to $1M in USDC?

USDC is less 'frozen' than say USDT, this is simply because Tether falls in line with Governments and doesn't challenge, they even have Feds with direct access to their systems and freezing capabilities.

Whereas USDC is a US Domestic company, and that means all freeze processes have to go through a due process and via a court order, not a phone call.

DAI is predominantly backed by USDC but isn't freezable perse on a individual basis.

However -> unless you are involved in a crime its likely not to be frozen - i even contacted Tether years ago after 50k was drained and converted to USDT and they were blase telling me to get a police report lol, by which point the funds would be gone, Tethers now changed its approach, Circle hasn't.

 

[brianK]

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.

 

[jorge]

keep it in DAI after reading OCT

 

[legrant]

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.

 

[plotoffshore]

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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.....

 

[legrant]

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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 deposit your USDC on it, which gives you a new token called avUSDC (may vary depending on blockchain), which is a yield bearing token of the USDC you originally deposited and can be swapped back to USDC at any time. avUSDC cannot be locked/frozen, and the underlying USDC is pooled/lent out, so while it can be frozen, it makes no sense to freeze as it'd freeze the whole protocol. So doing this you protect your USDC 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 such as BTC, ETH, USDT, USDC, etc, generally stable assets as well as some real world assets like bonds. It has a value of $1 and it has a whole system behind it to keep it there, however, there's always risk of failure although it is 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 can be swapped back to USDC at any time too, and even convert it to sUSDS which is made by the same people and yields 4.5%.

Ledger's and Trezor's just store a key, you can store any token on them, maybe not natively on their own applications, but using Metamask or Rabby, you can add anything.

 

[plotoffshore]

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.

 

[legrant]

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 others before/after, and use google too just in case

 

[W Fish]

which is a yield bearing token of the USDC you originally deposited and can be swapped back to USDC at any time.

Where does the yield come from?

 

[cryptofriendly]

Where does the yield come from?

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 to those who stake USDe for sUSDe (annual interest rate of 5%).

2.Spark (sDAI)

sDAI is generated by depositing 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 can also be traded or used in DeFi like other stablecoins.

3.Ondo Finance (USDY)

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

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

Note: The yield of USDY is reflected in 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 repurchase agreements, and allocates interest to BUIDL holders.

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

5.Figure Markets (YLDS)

YLDS is the first yield-generating stablecoin registered as 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 backed by real-world assets (RWAs) such as treasury bills and is minted by depositing USDC or eligible RWAs as collateral on the Usual platform.

Users can also stake USD0 on Curve to obtain USD0++ (annual interest rate of 0.08%). USD0++ can be used in DeFi, and 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 generates 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 of 3.8%.

9.Origin Protocol (OUSD)

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

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

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

10.Prisma Finance (mkUSD)

mkUSD is supported by liquidity staking derivatives. Earnings are generated through rewards from the 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 be 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 obtain maximum yields.

13.Level (lvlUSD)

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

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

The annual interest rate is 9.28%.

14.Davos (DUSD)

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

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

15.Reserve (USD3)

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

The income generated by allocating collateral to leading DeFi lending platforms will be distributed to USD3 holders (annual interest rate of 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 DeFi lending, treasury bills, and tokenized securities trading.

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

17.Paxos (USDL)

USDL is the first stablecoin to provide daily yields under a regulatory 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 to generate yields. Returns are distributed to USDO holders through a daily rebase mechanism.

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

20.Elixir (deUSD / sdeUSD)

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

Users who stake deUSD for sdeUSD can earn an annual return of 4.39% and double potion rewards.

 

[cryptofriendly]

BTW: The FIXED yields on Pendle in combination with the new stables look very lovely:

 

[toums]

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%.