These are the new types of stablecoin to make the most of the interest rate

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These are the new types of stablecoin to make the most of the interest rate

Although inflation has been slowing, interest rates are still at an all-time high.

This is painful for several reasons, but for Crypto bros, it basically means risk-on assets like Bitcoin and Dogecoin aren't as attractive as, say, conservative bonds issued by the U.S. government.

The DeFi industry, which is specifically stablecoin providers, is trying to make the most of the current high-interest rate environment, with a unique approach to make the most of it.

It's the return of the interest-bearing stablecoin, he said. It is now that things are looking a whole lot different than Terra's anchor protocol.

The industry is being crowded, from Maker's DAI to Frax Finance's sFRAX, with different flavors of this new variety of stablecoin.

Both sDAI and sFRAX generate their yield from T-Bills and other real-world asset investments, such as corporate debt.

And with that 'Safe' yield of as much as 5% on those idle U.S. dollars, investors are pouring in.

The project that powers maker's sDAI push, Spark Protocol, announced that the token had reached 1 billion in total circulation.

The euro-pegged stablecoins, such as Angle Protocol's, are also entering the game, with the euro-pitched stablecoins also playing an important role. Angle's agEUR is harvesting a 4% yield from its bag of real-world assets.

Is it still suspicious of anything yield-related in crypto?

The agEUR is generating its yield from a tokenized representation of a European government bond. While some other stablecoins are generating that yield via staked ETH, Veyrat says he's not a fan.

Some alternatives-specifically those that don't depend on interest rates-may enjoy an uptick once the Fed starts lowering rates.

Although it's not the most powerful central bank in the world, this product is currently enjoying quite the high from one of the world's most powerful central banks.

Of course, the irony of this entire niche, of course, is that the industry appears to be profiting from centralized governments and their financial policieas, a dynamic from which Bitcoin fans sought separation.

The unstable currency system poses a significant risk to future changes in monetary regimes, resulting in many of these stablecoins being vulnerable to any changes in monetary regimes.

Crypto is emerging as a rather dynamic new tool for making money better and more transparent no matter what the market environment is.

It's far from conclusive, of course.