New Trend in Wealth Management: The Rise of On-chain Stablecoin Investment

In recent years, the yields of traditional financial products have continued to decline, and many investors have found it difficult to find investment options that can outperform inflation. Against this backdrop, a new emerging investment method has begun to attract attention—on-chain investment based on stablecoin.

Stablecoins, as a type of digital asset pegged to fiat currency, function similarly to "digital cash." Investing in stablecoins allows users to utilize idle funds for on-chain lending, staking, or protocol investments, thereby earning corresponding annualized returns. Although this model sounds innovative, its core logic is similar to traditional banking operations, only achieving greater transparency and efficiency within the blockchain environment.

Currently, the annualized interest rates for USDT/USDC in mainstream decentralized finance (DeFi) lending protocols typically fluctuate between 2.5% and 4%. Some DeFi platforms may offer total annualized returns of up to 8% through additional incentive mechanisms, but this often comes with higher risks and locking requirements. In contrast, fixed-income products, while not yielding the highest returns, show stable overall performance and an upward trend, with annualized returns reaching approximately 5%. These products have become a favored on-chain investment choice for many users due to their stability and lower thresholds.

The user experience of stablecoin investment products is being rapidly optimized. Users can easily choose platforms and products and complete investments with one click, simply by holding stablecoins. Many platforms support flexible deposits and withdrawals with daily interest calculations, providing convenience comparable to popular mobile payment investment products, while offering yields close to certain countries' national bonds. At the same time, it has the stability of a fixed deposit but without penalties for early redemption, truly achieving a "flexibility within stability" investment experience.

Compared to traditional fixed income products, investing in stablecoins not only has advantages in terms of yield but also excels in flexibility and transparency. Most platforms allow users to deposit and withdraw funds at any time, with interest calculated daily, without a fixed lock-up period. In addition, platforms typically disclose the sources of returns, risk explanations, and fund flows, and some even verify fund safety through real-time on-chain data. More importantly, this model allows users to obtain a more equitable distribution of returns, as the platform no longer earns excessive interest spreads, but instead proportionally returns actual earnings to investors.

The returns on stablecoin investments mainly come from three aspects: on-chain lending interest, staking rewards or node income, and profit distribution from participating in specific financial strategies. For users, as long as the platform's product structure is transparent and asset management is secure, these investments can be regarded as on-chain quasi-fixed income products.

Although there are no clear statistical data, the scale of users participating in stablecoin investments is rapidly expanding based on on-chain activity and capital inflow. Especially in regions where local currencies are unstable or financial systems are inadequate, stablecoins have become an important way for residents to obtain returns on dollar assets. It is worth noting that institutional investors have also begun to incorporate stablecoin investments into their asset management strategies, which has driven the platform's continuous upgrades in risk control, transparency, and compliance.

For ordinary investors, investing in stablecoins is not a quick way to get rich, but it can become one of the most stable sources of return in asset allocation. It resembles a "digital cash asset" in the portfolio, with yields higher than regular savings and lower volatility than stocks, making it suitable for seeking certainty in uncertain market environments. As regulatory frameworks for stablecoins gradually improve in various regions worldwide, users will have more safe, compliant, and transparently profitable investment options.

However, as an emerging field, investing in stablecoins still carries risks. Certain stablecoins may experience depegging risks for various reasons, and the security of smart contracts is also a factor to consider. Therefore, it is recommended that investors choose products from well-known platforms or regulated institutions, prioritize investment methods with clear yield structures and support for flexible redemptions, and maintain a cautious attitude towards products that claim high returns. Stability, transparency, and compliance should be the fundamental principles for long-term participation.

In the current low-interest-rate environment, stablecoin investments offer investors a new robust financial management option. While it is not necessary to fully embrace the world of cryptocurrencies, through stablecoins, investors can have a transparent, relatively safe "digital savings account" with an annual yield of about 5%, seeking certain returns in an uncertain market.