Where to Park Stablecoins Between Trades

The honest range on reputable venues is 3.5% to 7%. Above that you are being compensated for something. Ethena pays 10% to 15% because you are short perpetual funding. Pendle pays a fixed rate because you accepted duration. Neither is a scam and neither is a savings account.

Where the yield comes from, in every case

There are only four sources of stablecoin yield. Every product here is one of them or a repackaging of one, and knowing which tells you exactly what breaks it.

• Overcollateralised borrowing. Someone posts $150 of ETH to borrow $100 of USDC and pays interest. That interest is your yield. It rises when leverage demand rises and falls when it does not. This is Aave and Morpho. It breaks if the collateral gaps down faster than liquidators can act.
• Treasury bills. Real-world short-term government debt, tokenised. This underpins much of the Sky savings rate. It breaks essentially never, but it caps your yield at whatever the risk-free rate is, minus a spread.
• Funding rates. Long spot, short perp, collect the funding longs pay shorts. This is Ethena. It breaks when funding goes negative, which happens in sustained bear markets.
• Someone else's expectations. Pendle splits a yield-bearing asset into principal and future yield, so you can sell your yield for cash now or buy someone else's at a discount. It does not create yield, it prices it. It breaks if the underlying breaks, plus you have taken duration risk.

If you cannot place a product into one of those four boxes, that is a finding. Yield with no identifiable source is usually someone else's deposits.

What the difference is actually worth

Chasing yield has a cost in attention, gas and risk, and it is worth knowing what you are chasing before you spend an afternoon on it.

The full comparison

Aave

The benchmark, and the correct default for most people. Aave is an overcollateralised lending market with the longest live operating record in DeFi, extensive audits, transparent risk parameters set by public governance, and deep liquidity across chains. Supply USDC or USDT, earn 3.6% to 5.4% depending on utilisation, withdraw whenever the pool has liquidity.

Its real value is as a reference rate. If a protocol pays substantially more than Aave for what looks like the same exposure, the difference is the risk you are being paid to take, and you should be able to say what it is. That framing will save you more money over time than any individual allocation decision.

Two genuine risks. Smart contract risk never reaches zero, however long the record. And in periods of extreme borrowing demand, utilisation can approach 100%, at which point withdrawals queue until borrowers repay. That resolves quickly in practice and it resolves slowly in exactly the market conditions where you want your money.

Sky and Spark

Sky, the protocol formerly known as MakerDAO, runs a savings rate on USDS backed substantially by tokenised treasury bills. Spark is the front end most people should use to access it. The distinction matters less than the exposure: you are earning a governance-set rate on an asset backed largely by short-term government debt.

This is the closest thing on-chain to a boring deposit account, and boring is a compliment here. Liquidity is instant, the mechanism is comprehensible, and the rate is stable rather than swinging with leverage demand. The rate being a governance decision cuts both ways: it will not spike when borrowing demand does, and it will not collapse either.

The risks are the USDS peg and governance itself. A token-voted rate is a political process, and the protocol's long lineage through MakerDAO includes both impressive crisis management and contentious governance episodes. Worth ten minutes of reading if you are allocating seriously.

Morpho

Morpho restructures lending into independent, curated vaults rather than one pooled market. A curator decides which collateral a vault accepts and at what loan-to-value, and depositors get whatever that market yields. Typical stablecoin vaults run 4.2% to 7.1%, so roughly 50 to 150 basis points over Aave.

That premium is not free efficiency, it is a different risk shape. Each vault is a separate smart contract and a separate bet on one curator's judgement about collateral quality. A vault accepting a long-tail token as collateral at aggressive parameters will pay more and will be the one that has a bad day. The curator's identity, track record and published parameters are the thing to evaluate, and Morpho does publish them.

Used well, this is the best yield-per-unit-risk on the page. Used by clicking the highest number on the list, it is how people find out what collateral tail risk means.

Pendle

Pendle splits a yield-bearing asset into a principal token and a yield token, which lets you buy the principal at a discount and hold to maturity for a fixed, known return. Stablecoin PTs typically price at 5.8% to 9.2% to maturity. It is the only way to lock a fixed rate on-chain, and for anyone who wants certainty rather than a floating number, that is genuinely valuable.

Two things people miss. First, buying a PT means taking every risk of the underlying protocol, because you are ultimately exposed to whatever generates that yield. A PT on a risky vault is a risky position wearing a fixed-rate label. Second, you have taken duration: the PT is tradeable before maturity but at a market price, so exiting early can cost you. The fixed rate is fixed only if you hold to the end.

Ethena

sUSDe pays 10% to 15%, sometimes more, and it is worth being precise about why. Ethena runs a delta-neutral basis trade: long spot collateral, short an equivalent perpetual futures position, collecting the funding that longs pay shorts. Add staking yield on the collateral and that is the whole engine.

If you trade perps, you already understand this position, and you already know its failure mode. Funding is positive most of the time in a market where people want leverage long. In a sustained bear market funding goes negative, and a short-funding position pays out instead of collecting. The yield does not just fall, it can invert. Our explainer on perpetual futures and the funding rates guide cover the mechanism, and you can watch live funding across every Hyperliquid market on the funding page to see what the trade is currently earning.

There is a second risk that is easy to overlook. The short leg sits on centralised exchanges via custodians, so you are exposed to exchange and custodian failure as well as to funding. This is not hidden, it is documented, and it is a real dependency on the least decentralised part of the stack.

The liquidity trap nobody prices

Every venue here quotes liquidity as instant or near-instant, and every one of them has friction that appears exactly when you least want it.

Lending markets queue withdrawals when utilisation spikes, and utilisation spikes when the market is moving, because that is when everyone wants leverage. Staked positions have cooldowns. Pendle PTs are tradeable but at a price that moves against you when everyone is selling. All three of these bite during volatility, which is the same moment you would want capital available to add margin or buy a dislocation.

The practical rule is simple and worth more than any yield comparison: keep your working trading margin liquid and unencumbered, and only put genuinely idle capital to work. If you would be in trouble waiting six hours for a withdrawal, that money should not be earning yield. Deciding this in advance is much easier than deciding it during a liquidation cascade.

A reasonable allocation

Most people over-engineer this. A defensible structure for idle capital, offered as an example rather than advice:

• Working margin, kept liquid. Whatever you might need within a day, sitting as plain stablecoin in your own wallet or on the venue you trade. Earning nothing, and that is the point.
• A base layer. The bulk of idle capital in Aave or the Sky rate via Spark. Boring, proven, instant.
• A smaller risk-on slice. A Morpho vault whose curator and parameters you have actually read, or an Ethena position you are sizing as the funding trade it is. This is where the extra yield lives and where the losses live.

Splitting across two or three venues is normal and sensible: it caps the damage from any single smart contract failure. Splitting across eight is not diversification, it is eight smart contract exposures and a spreadsheet.

What we could not verify

• Rates move constantly. Every APY here is a range observed on the verification date. Lending rates track utilisation hour by hour and Ethena's yield tracks funding. Check the live number before allocating.
• Individual Morpho vaults. The range given is across typical stablecoin vaults. Any specific vault has its own curator, collateral set and risk profile, and we have not assessed them individually.
• Audit quality. "Audited" is a fact about a document, not a guarantee about code. Every protocol here has been audited and audited protocols have still been exploited.

Choosing, in one paragraph

Put the bulk in Aave, or in the Sky rate through Spark if you prefer treasury backing to lending demand. Add Morpho for an extra one percent only if your position is large enough to justify reading vault parameters, and pick the curator rather than the APY. Use Pendle if you specifically want a fixed rate and can hold to maturity. Use Ethena only if you would take the short-funding trade on its own merits, and size it accordingly. Keep your working margin out of all of them.