Yield-Bearing Stablecoins Surge to $11B, Grabbing 4.5% of Market Share

The yield-bearing stablecoin market has experienced explosive growth in 2024, reaching $11 billion in circulation — a massive jump from just $1.5 billion at the start of the year. This segment now represents 4.5% of the total stablecoin market, up from 1% in January.

Among the key players, Pendle has emerged as a market leader, accounting for 30% of the yield-bearing stablecoin total value locked (TVL), which translates to roughly $3 billion. The decentralized protocol allows users to earn fixed yields or trade on variable interest rates, offering new dimensions in DeFi-based income generation.

Pendle’s stablecoin TVL has grown to dominate its platform, now representing 83% of its $4 billion in TVL, up dramatically from less than 20% a year ago. In contrast, assets like Ether (ETH), which once formed 80%–90% of Pendle’s TVL, now account for less than 10%.

The growth is fueled by a notable gap in returns. Traditional stablecoins like USDT and USDC, which collectively hold over $200 billion in circulation, do not pass interest on to users. With U.S. interest rates around 4.3%, Pendle estimates holders of these stablecoins are missing out on more than $9 billion in potential annual yield.

Pendle TVL share by assets. Source: Pendle

Regulatory Clarity Drives Innovation and Growth

The rapid rise of yield-bearing stablecoins also aligns with increasing regulatory support. Under the administration of U.S. President Donald Trump, the SEC approved yield-bearing stablecoins as regulated certificates earlier this year — a move that provided clarity without a ban. These stablecoins are now subject to registration, disclosure, and investor protection requirements.

Pending legislation like the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act and the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act suggest a favorable regulatory landscape for the sector going forward.

Pendle projects even stronger growth ahead, estimating that total stablecoin issuance could double to $500 billion in the next 18–24 months, with yield-bearing coins expected to command 15% of that — equivalent to $75 billion, or a sevenfold increase from today.

Pendle Evolves into Yield Market Infrastructure

Originally centered around airdrop farming, Pendle is now positioning itself as a foundational infrastructure for the DeFi yield economy. Currently, Ethena’s USDe makes up about 75% of Pendle’s stablecoin TVL. But the platform is seeing diversification, with protocols like Open Eden, Reserve, and Falcon growing non-USDe assets from 1% to 26% over the past year.

Yield-bearing stablecoins issuance. Source: Pendle

Pendle also plans to expand beyond Ethereum, aiming to support other blockchain ecosystems such as Solana and integrate with Aave and Ethena’s upcoming Converge blockchain.

Traditional Finance Joins the Yield Curve

The interest in yield-bearing crypto assets isn’t limited to DeFi natives. On May 19, Franklin, a payroll and treasury platform bridging fiat and crypto, launched Payroll Treasury Yield — a solution that enables companies to earn interest on payroll reserves through blockchain lending.

As both institutional and retail players seek better returns on idle funds, yield-bearing stablecoins are emerging as one of the most promising innovations in the digital asset space.