# From Market Demand to Flawless Design: A Guide to Issuing Yield-Bearing Stablecoins

**Published by:** [Bitcoin Ecosystem](https://paragraph.com/@bitcoin-ecosystem/)
**Published on:** 2025-06-22
**Categories:** yield-bearing
**URL:** https://paragraph.com/@bitcoin-ecosystem/from-market-demand-to-flawless-design-a-guide-to-issuing-yield-bearing-stablecoins

## Content

On the surface, YBS appears deceptively simple—a 1:1 dollar peg ensuring enduring security. Yet beneath lies an intricately layered system.Prologue: The Banking MirageAs discussed earlier, the logic of yield-bearing stablecoins (YBS) mimics traditional banking—but only superficially. Critical challenges remain: sourcing user yields, distribution mechanisms, and sustaining long-term viability. While DeFi collapses are routine (see SBF’s imprisonment), incidents like Silicon Valley Bank’s meltdown signal systemic risks demanding Fed intervention.The Era of Excessive LeverageProfit-seeking is framed as "product thinking" in tech but labeled "speculation" in finance. Arbitrage thrives on price disparities, while long-term volatility necessitates hedging. Post-computerization, quantitative speculation evolved through three phases:Portfolio Insurance: Diversification to preserve value, quantifying and pricing risk.Leverage (LTCM Era): Amplifying marginal gains through borrowed capital.Credit Default Swaps (CDS): Once risk-management tools, now degenerate gambling.Today, spatial arbitrage (large price gaps across markets) has vanished. The norm is micropayments, fragmentation, and routine operations—mirrored in Web3 through on-chain MEV and off-CEX arbitrage. Temporal hedging is passé; leverage, extremism, and speculation dominate. "Hedging" itself becomes the endgame, with远期风险 deferred indefinitely. Against this backdrop, YBS projects face a paradox:Low APY/APR? Fails to attract capital and boost TVL.Overpromising yields? Inevitably spirals into Ponzi dynamics, exploding at TGE, funding, airdrop farming, or exchange listing.Hedging is arbitrage in disguise; momentum is inescapable.Stablecoin Taxonomy: Where YBS Fits(Image: Stablecoin factions. Source: @zuoyeweb3) Stablecoins bifurcate into three branches:Institutional Networks: Cross-border清算 systems (e.g., JPMorgan’s offerings), supplementing/replacing Visa/SWIFT.TradFi Dominance: USDT-alikes, including fiat-pegged and institutional experiments like USD1.Ethena Challengers: Including Resolv—our focus here.Markets exhibit "momentum": pumping relentlessly during rallies, probing deeper lows at troughs. YBS epitomizes this. Projects will battle Ethena, driving APYs to unsustainable highs before market consolidation crowns a winner. Eventually,对冲 and arbitrage converge indistinguishably.The YBS Launch Playbook(Image: YBS framework. Source: @zuoyeweb3) After dissecting 100+ YBS projects, we distill a template divided into product mechanics and market expansion.I. Product MechanicsCollateral AssetsMainstream Choice: USD/U.S. Treasuries. Direct replication of MakerDAO’s "buy Treasuries" model is crude. Emerging niches:Helping Web3 projects acquire real-world assets (e.g., SuperState’s USTB for compliant tokenized Treasuries).Bridging Web2 giants (e.g., Ondo’s Kaite Wheeler, ex-BlackRock, forging Wall Street ties).Four Collateral Types:Treasuries/cash (e.g., Sky’s USDS).On-chain blue chips (e.g., Resolv’s BTC/ETH-backed USR—still mostly USDC/T-bills in practice).USDT/USDC-backed (e.g., Level’s lvlUSD).Exotics: Like GAIB’s GPU算力 tokenization—"utility as collateral" for the AI era.Minting MechanismMost YBS projects claim 1:1 collateralization (unlike MakerDAO’s overcollateralized DAI). Reality often diverges.Non-collateralized models (credit-based) remain fringe this cycle.Yield SourcingCase Study: Ethena:Delta-neutral ETH spot + perpetual shorts maintain peg; funding rate arbitrage generates yield for sUSDe holders.stETH enhances yield capture.Redemption:sUSDe → USDe: 7-day unstaking cooldown.USDe → ETH: T+7 settlement (or swap via DEX/CEX).Yield DistributionPrice-Appreciating sTokens: Avalon, Falcon—sToken value rises over time.Quantity-Increasing sTokens: Resolv—more tokens issued at fixed 1:1 parity.Core Challenges:Reserve Buildup: Unlike DEXs relying on user liquidity, YBS demands deep reserves to inspire trust—favoring VC-backed players.Yield Origin: Early movers capture α; laggards compete via capital规模, risking systemic crises.II. Market Expansion: The Growth GrindPost-launch, attracting whales and retail requires balancing yield scalability with sustainability.Pool ProliferationFlywheel: More pools → deeper liquidity → stabler yields → more users.Key Infrastructure:Pendle (YBS’s "Coinbase for yield"), amplified via platforms like Equilibria (Pendle’s "Convex").Morpho’s peer-to-peer lending pools displacing Aave/Curve.Rewards SystemsPoints Warfare:Deposit longevity (e.g., USDf 6x multipliers).Staking (Falcon USDf 1x).Referrals.Cross-protocol integration (Resolv’s 19 partnerships).Caveat: Points ≠ guaranteed airdrops.Narrative ControlPlaybooks:KOLs/media (diminishing returns).Real-world endorsements (e.g., "USD1 backed by Trump").Celebrity背书 (Arthur Hayes for Ethena).Obfuscation TacticsAPR vs. APY: Vague metrics mask risks.Examples:Falcon’s off-chain yield calculations.Inconsistent reporting periods (7D vs. 1Y).Black-box CEX data.Epilogue: The Divine Simplicity"Less demand, closer to godhood." YBS’s 1:1 dollar facade belies its Byzantine underpinnings. Deposit-taking and lending are inherently socio-political—East or West. We’ve dissected YBS from the issuer’s lens, but survival odds remain bleak: How many of 100 YBS projects will endure?

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