Top Solana Protocols for Passive Stablecoin Income, Part 2

This is Part 2 of a 2-part series about passive stablecoin income strategies on Solana. We covered 3 strategies in Part 1. We also looked at the risks for each strategy. 

Here’s Part 2 about passive stablecoin income on Solana.

Hylo

Hylo is a new DeFi protocol on Solana. It offers a product suite that consists of various assets. For example, with $hyUSD you can get sustainable $USD Yield. It also offers $xSOL, this offers non-liquidatable leverage with zero funding cost. So, that looks very promising, but it’s still all in Beta. You need to get a code on their X or Telegram account to access the Beta site.

Hylo offers their $hyUSD stablecoin. The current APY for staking is 11.6% in its Stability Pool. Hylo’s docs explain how this works. There’s also the potential of an airdrop for their token.

The risk. It’s a new platform, still in Beta. So, be careful with depositing any funds.

Source: Hylo

Huma Finance

Huma Finance is another DeFi app on Solana. A great option for passive stablecoin income. It targets both retail and institutions. The current APY is 10% on $USDC in its ‘Classic Mode’ option. There’s no need to lock up your stablecoins. In other words, you can withdraw your funds at any time. Furthermore, you can earn ‘Feathers’. These are points that can count towards future airdrops. However, if you decide to lock up your deposited $USDC, your ‘Feathers’ get a multiplier. You can lock up your assets for 3 or 6 months. The respective multipliers are 2.98x and 4.9x.

• Go to the Huma app.
• Connect your Solana wallet.
• Deposit $USDC in ‘Classic’ mode for passive stablecoin income.
• You have the option to lock your deposit for 3 or 6 months. This will boost your airdrop points.
• You can switch between yield and points modes at any time

The Risk. Huma bases its yields on real-world payment flows. So, that’s good. It’s better sustainable compared to most other DeFi protocols. This leaves you with smart contract and protocol risks.

Source: Huma Finance

Loopscale Looping

We covered Loopscale already in Part 1. That was for its $USDC vault. However, Loopscale also offers looping. This is when you repeatedly borrow and deposit assets. Thus, boosting your potential returns. In other words, you create a ‘loop’ by keeping borrowing and lending. To clarify this even more, you deposit a collateral, and you borrow against it. You swap the borrowed asset for the original asset. Now you redeposit this asset and repeat the process. 

The current yield on Loopscale can be as high as 50%. This is how it works.

• Go to Jupiter and get $PST. That’s because Huma’s Pools are full. 1 $PST is the same as 1 $USDC or 1 $USDT.
• Go to the Loopscale app and visit the ‘Loop’s page.
• Go the $PST-$USDC looping option.
• Now buy PT-PST-2507 on RateX. Go to Points -> Choose PST -> Buy PT-PST-2507. Here’s an explanation of what PT tokens are on RateX.
• Go back to the PST looping option on Loopscale and deposit the PT-PST-2507. 
• Choose your preferred leverage. The higher your leverage, the higher your yield. However, higher leverage also increases your liquidation risk.
• Optional settings are ‘slippage tolerance’ and ‘fixed-rate duration’. 
• Confirm the transaction in your wallet.

The risk. There’s a liquidation risk when using leverage. Increasing leverage also increases your liquidation risk. However, PT-PST-2507 pegs to the $USDC. This does reduce your liquidation risk but doesn’t exclude it. We covered Loopscale’s recent exploit in Part 1.

Source: Loopscale

Conclusion

This is Part 2 of how to find passive stablecoin income on Solana. In each of the 2 articles, we cover three different passive stablecoin income options. Here’s a link to Part 1.

Disclaimer

The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment and informational purposes only. Any information or strategies are thoughts and opinions relevant to accepted levels of risk tolerance of the writer/reviewers, and their risk tolerance may be different from yours.

We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments, so please do your due diligence.

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