$290 billion Stablecoin, Aave USDC Yield Falls Below 1-Year Treasury

The stablecoin market has surpassed $290 billion, but the yield on DeFi loans has consistently failed to exceed the yield on 1-year U.S. Treasuries. According to a report by CoinMetrics, the stablecoins deposited in Aave v3 and Morpho exceeded $8.6 billion. Aave's USDC yield was on average 31 basis points lower than the yield on 1-year U.S. Treasuries, with 78% of the time in 2026, Aave's USDC annualized yield fell below that of 1-year U.S. Treasuries. In contrast, the median yield of USDC in Morpho v2 vaults was on average 65 basis points higher than that of 1-year U.S. Treasuries. The yield difference between the two protocols stems from the design of the lending market, as Morpho operates a separate lending market while Aave applies interest rates through a shared pool. The yield differences among stablecoins arise from the supply and borrowing amounts of each asset, with the median yield of USDC vaults over the past 90 days being 4.79%. While stablecoin lending has shown relatively stable income flows, it carries inherent risks of DeFi, and when comparing yields, volatility, liquidity, and protocol structure must also be considered.

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