9 Top DeFi Protocols for Stablecoin Yield

The largest DeFi lending protocol. Deposit stablecoins, earn variable interest paid by borrowers—rates move with pool utilization. Three independent audits and a $10M+ Immunefi bug bounty. Security score of 95 reflects its maturity and the depth of review it's received.

Six independent audits give it a 96 security score—the highest of any protocol tracked here. Uniswap v3 concentrated liquidity lets you specify a price range for your stablecoin LP position, which dramatically improves capital efficiency but requires active management. APY swings depending on pool, fee tier, and range width. Dominant venue for USDC/USDT and USDC/DAI volume.

Built specifically for stablecoin swaps. The StableSwap bonding curve concentrates liquidity around the peg, cutting slippage on like-kind trades (USDC/USDT, DAI/USDC) compared to general-purpose AMMs. LPs earn trading fees plus CRV token incentives. Locking CRV as veCRV boosts rewards up to 2.5x—this mechanic drives the "Curve wars" for governance control.

A layer on top of Curve. Deposit Curve LP tokens into Convex to get boosted CRV rewards without locking CRV yourself. You also earn CVX tokens. Convex holds a large share of veCRV voting power, which is why it matters for Curve governance. Extra smart contract layer means additional risk on top of Curve's own.

One of the original DeFi money markets. Compound pioneered the utilization-based interest rate curve that most lending protocols now copy. Five audit firms. Compound v3 (Comet) simplified the design to single-asset borrowing, which reduces risk surface compared to the older multi-asset model.

AMM with customizable pool weightings—not just 50/50. Balancer's Stable Pools use StableSwap math similar to Curve for stablecoin pairs. Boosted Pools route idle liquidity to Aave for extra yield. More architectural flexibility than Curve, but also more complexity to evaluate as an LP.

Vertically integrated: FRAX (stablecoin), frxETH (liquid staking), Fraxlend (lending), and Fraxswap (AMM) under one protocol. Uses Algorithmic Market Operations to deploy protocol-owned liquidity. Four audits including a Code4rena competitive review. Frax v3 is shifting toward full collateralization backed by real-world assets.

Deposit stablecoins into Vaults and Yearn automatically allocates across lending protocols, LP positions, and farming strategies. Strategy writers compete to find the best risk-adjusted yields. The convenience comes at a cost: composed strategies stack smart contract risk across multiple protocols. Higher risk score (45) reflects that complexity.

Cross-chain stablecoin bridge built on LayerZero. Uses unified liquidity pools for native asset bridging—no wrapped tokens. LPs earn fees from cross-chain transfers. Risk score of 58 is the highest here, and for good reason: bridge protocols are the most-exploited category in DeFi, with over $2B in historical losses across the sector.