We totally understand - the choice is dizzying and the differences confusing. Stablecoins today have evolved far beyond simple 1:1 fiat pegs.

They now power entire ecosystems, from on-chain settlements and collateralized lending, to yield strategies and synthetic hedging mechanisms. Understanding their structure, backing, and yield potential is essential for any investor navigating DeFi in 2025.

Check out our quick rundown of your options here:

You can also view the full table here.

These are the “regular” stablecoins most people know — like USDT, USDC, DAI, or USDe.

• You simply hold them in your wallet or exchange account.

• Their value stays around $1 (or the pegged currency).

• They don’t earn yield automatically; they’re meant to be stable, liquid, and easy to move around.

• If you want yield, you need to lend, farm, or stake them somewhere else, like a DeFi pool or savings vault.

Think of them like cash in your bank account - safe, but not earning unless you put it in a fixed deposit.

These are newer types of stablecoins that earn yield automatically just by holding them.

They work like this:

• You “stake” or deposit your normal stablecoin (e.g. DAI, USDe, USDS) into a protocol.

• In return, you get a staked version - like sDAI, sUSDe, or sUSDS.

• This staked version slowly appreciates over time because it’s backed by yield-generating assets (such as real-world Treasury bills, DeFi lending, or hedging strategies).

Think of it like an interest-paying savings account; your balance may stay the same in units, but each token becomes worth more over time.

• Some protocols offer both staked and unstaked versions of their stablecoins.

• For example, Ethena’s USDe can be staked to earn delta-neutral yield, while the unstaked version simply tracks the dollar.

• Staked stablecoins usually generate yield through DeFi mechanisms such as futures contracts, lending protocols, or liquidity pools.

• Unstaked stablecoins are fully collateralized and maintain a 1:1 peg without yield, but can be lent out externally for earnings.

Algorithmic or hybrid stablecoins like Frax and Ethena USDe combine collateral and hedging mechanisms for both stability and yield.

Demether provides frictionless access to yield opportunities on real world assets. We are backed by Web3 native investors and founded by a team hailing from JPMorgan, Goldman Sachs, Bank of America-Merill Lynch, Animoca Brands, HSBC, Rocket Internet and Google.

Our webapp and native mobile apps will be launching soon. Sign up for our waitlist at https//:demether.io and follow us on X.com/DemetherDefi for the latest news.

We totally understand - the choice is dizzying and the differences confusing. Stablecoins today have evolved far beyond simple 1:1 fiat pegs.

They now power entire ecosystems, from on-chain settlements and collateralized lending, to yield strategies and synthetic hedging mechanisms. Understanding their structure, backing, and yield potential is essential for any investor navigating DeFi in 2025.

Check out our quick rundown of your options here:

You can also view the full table here.

These are the “regular” stablecoins most people know — like USDT, USDC, DAI, or USDe.

• You simply hold them in your wallet or exchange account.

• Their value stays around $1 (or the pegged currency).

• They don’t earn yield automatically; they’re meant to be stable, liquid, and easy to move around.

• If you want yield, you need to lend, farm, or stake them somewhere else, like a DeFi pool or savings vault.

Think of them like cash in your bank account - safe, but not earning unless you put it in a fixed deposit.

These are newer types of stablecoins that earn yield automatically just by holding them.

They work like this:

• You “stake” or deposit your normal stablecoin (e.g. DAI, USDe, USDS) into a protocol.

• In return, you get a staked version - like sDAI, sUSDe, or sUSDS.

• This staked version slowly appreciates over time because it’s backed by yield-generating assets (such as real-world Treasury bills, DeFi lending, or hedging strategies).

Think of it like an interest-paying savings account; your balance may stay the same in units, but each token becomes worth more over time.

• Some protocols offer both staked and unstaked versions of their stablecoins.

• For example, Ethena’s USDe can be staked to earn delta-neutral yield, while the unstaked version simply tracks the dollar.

• Staked stablecoins usually generate yield through DeFi mechanisms such as futures contracts, lending protocols, or liquidity pools.

• Unstaked stablecoins are fully collateralized and maintain a 1:1 peg without yield, but can be lent out externally for earnings.

Algorithmic or hybrid stablecoins like Frax and Ethena USDe combine collateral and hedging mechanisms for both stability and yield.

Demether provides frictionless access to yield opportunities on real world assets. We are backed by Web3 native investors and founded by a team hailing from JPMorgan, Goldman Sachs, Bank of America-Merill Lynch, Animoca Brands, HSBC, Rocket Internet and Google.

Our webapp and native mobile apps will be launching soon. Sign up for our waitlist at https//:demether.io and follow us on X.com/DemetherDefi for the latest news.