Stablecoin Market Surpasses $290 Billion, Yet Yields Often Trail U.S. Treasuries

The on-chain stablecoin market has exceeded $290 billion, with investors increasingly utilizing lending protocols like Aave and Morpho to generate yield. However, research by Coin Metrics indicates that stablecoin lending often fails to outperform one-year U.S. Treasury yields. Data shows a 159-basis-point yield discrepancy for USDC across different protocols, highlighting that DeFi yields do not always adequately compensate for risks such as smart contract vulnerabilities, oracle manipulation, and potential de-pegging. While tokenized Treasuries like those