Stablecoin Summer: The Tokens Riding the $250B Wave
"Stablecoin Summer" sounds like an event you would never want to attend, let's make no mistake. But while the name might be questionable, the trend it represents within the crypto industry is massive and in complete contrast to the stablecoins themselves, exciting.
Circle just pulled off one of the most successful IPOs in recent memory, going from being priced at $31 to opening at $69 and closing the first day at $83. That's a 168% gain, with traditional finance scrambling to understand what they'd been missing. The fun carried on the following day, too. Meanwhile, stablecoins quietly crossed $250 billion in market cap and processed more transaction volume than Visa and Mastercard combined last year.
Here's the thing, though—you can't exactly buy stablecoins to bet on this growth. Unironically buying 1 USDC = $1 (I mean, usually - but that's another topic). The real opportunity lies in the protocols that power this $250 billion ecosystem. Every swap, every loan, every yield optimization generates fees for someone, and those someones usually have tokens you can actually buy.
Living in the DeFi trenches with minimal sleep means it's easy to identify what tokens fit within the investable stablecoin category, and what are best positioned to catch the tailwinds of continued growth from the main centralised players (USDC & USDT). Some are established players within DeFi, some are emerging protocols, and all carry their own risk profiles. There have been many periods of time when stablecoins are, in fact, very unstable, and you should consider this when allocating essential amounts of money to these assets.
Let's explore what's out there, but first, a 10-second primer.
WTF is a Stablecoin?
Stablecoins are cryptocurrencies designed to maintain a stable value relative to a reference asset (typically the US dollar). Think of them as blockchain-native dollars—you can send them anywhere, instantly, without traditional banking intermediaries.
The big three—USDT, USDC, and USDS—achieve this stability through different mechanisms. USDT and USDC are backed by real dollars and treasuries sitting in bank accounts. USDS (Sky's stablecoin) maintains its dollar value through overcollateralized crypto loans and real-world asset backing. Beyond these are synthetic dollars like Ethena's USDe (backed by hedged crypto positions), algorithmic stablecoins, and even some backed by other commodities like gold.
While they might fluctuate by a few cents here and there, they generally hover around $1. The appeal is straightforward: they combine crypto's efficiency and accessibility with relative price stability. No more explaining why your portfolio swung 30% overnight. Just stable(ish), boring, incredibly useful digital dollars that are rapidly transforming how value moves globally.
Now, the DeFi projects that are best positioned to ride the stablecoin wave.
AAVE - The DeFi Banking Infrastructure
Market Cap: ~$4.7 billion
Risk Level: Low
Native Stablecoin: GHO
AAVE has essentially built the largest decentralized lending platform in crypto, managing over $12-15 billion in deposits. Last year alone, they generated over $300 million in fees. Their elegantly simple model facilitates lending and borrowing, earning the spread between what borrowers pay (6-8%) and what lenders receive (2-4%) on stablecoin deposits.
But here's what makes AAVE particularly interesting for Stablecoin Summer: their native GHO stablecoin. Every GHO minted generates interest that flows directly to the AAVE protocol treasury. AAVE stakers get a clever benefit—they can borrow GHO at discounted rates, creating additional utility for the token. With the steady growth of GHO supply, this becomes another revenue stream entirely controlled by the protocol.
Recent developments have been particularly bullish. World Liberty Financial (yes, the Trump-affiliated DeFi project) took a significant position in AAVE, and the Ethereum Foundation themselves are using Aave for onchain loans, giving blue-chip validity to the project and its year of leading the primitive. The "Aavenomics" upgrade, including the Umbrella upgrade, redirects even more protocol revenue to token holders through a buyback and distribution mechanism.
SKY (ex. MakerDAO) - The OG Stablecoin Protocol
Market Cap: ~$1.9 billion
Risk Level: Low
Stablecoins: DAI & USDS
MakerDAO's rebrand to Sky represents more than cosmetic changes. They're managing over $10 billion in stablecoins between their legacy DAI and new USDS, making them one of the largest decentralized stablecoin issuers globally.
Their revenue model remains compelling: users deposit collateral to mint stablecoins and pay stability fees (interest) for the privilege. They recently hit $1.67 million in daily revenue—impressive for a decentralized protocol. The new Sky Savings Rate (SSR) allows USDS holders to earn yield directly, competing with traditional savings accounts.
The token conversion (1 MKR = 24,000 SKY) introduces new tokenomics where SKY can be staked to earn protocol rewards. When the protocol's surplus buffer exceeds certain thresholds, it can be used for MKR buybacks and burns—a mechanism that has already removed significant MKR from circulation. Their $1 billion allocation to tokenized real-world assets is particularly noteworthy, which generates additional yield flowing into this surplus buffer.
ENA (Ethena) - The Yield Innovation Play
Market Cap: ~$2.2 billion
Risk Level: Medium
Stablecoins: USDe, USDtb
Ethena has created something genuinely novel: a synthetic dollar (USDe) that generates significant yield through a delta-neutral strategy. They back their stablecoin with staked ETH while maintaining short positions in ETH futures, currently generating around 7% APY for holders, but has seen 20%+ in the past.
Their growth has been remarkable—from $85 million to $6 billion in under a year, making USDe the fourth largest stablecoin globally. The recent launch of USDtb, backed by BlackRock's BUIDL fund, adds a more conservative option for institutional users.
ENA token holders recently approved a fee switch proposal. Under this proposal, a portion of protocol revenues will flow to staked ENA. As the protocol scales, this could create significant value accrual and directly tie the token to the growth of the stablecoin, USDE, and wider narrative.
CRV (Curve) - The Stablecoin Trading Infrastructure & Ecosystem
Market Cap: ~$950 million
Risk Level: Low
Native Stablecoin: crvUSD
Curve might not be the flashiest protocol, and I still wake up haunted by their V1 website UI, but it's absolutely essential to DeFi's plumbing. They processed $34.6 billion in volume in Q1 2025 alone, with over 70% being stablecoin-to-stablecoin swaps. Every swap generates a 0.04% fee, split between liquidity providers and veCRV holders (CRV locked for up to 4 years).
The valuation disconnect is particularly interesting: $2.48 billion in TVL but only a $958 million market cap. Their crvUSD stablecoin uses an innovative LLAMMA (Lending-Liquidating AMM Algorithm) that enables soft liquidations, reducing bad debt risk. The new Savings crvUSD (scrvUSD) product offers competitive yields to holders, with rates dynamically adjusted by the protocol's monetary policy.
The real power in Curve comes from veCRV, a locked CRV that earns fees and controls where CRV emissions go. This created the "Curve Wars," where protocols battle for voting power to direct emissions to their pools.
Following Curve, I must mention, by extension, Convex and Resupply as higher-risk, related ecosystem tokens.
CVX (Convex) - The Curve Force Multiplier
Market Cap: ~$250 million
Risk Level: Medium
Convex won the Curve Wars. They control over 50% of all veCRV voting power, making them the de facto kingmaker for CRV emissions. This isn't just influence—it's billions of dollars in annual incentives they can direct.
By pooling users' CRV and permanently locking it, Convex achieves the maximum 2.5x boost on rewards for all depositors. They take a 16% performance fee on all Curve rewards: 10% to cvxCRV stakers, 5% to CVX stakers, 1% to harvest callers. But the real money comes from voting bribes—protocols pay millions to influence where Convex directs emissions.
With $1.15 billion in TVL against a sub-$300 million market cap, CVX trades at a significant discount to the veCRV it controls. It's essentially a leveraged bet on Curve's success with additional revenue streams.
RSUP (Resupply) - The Leveraged Yield Protocol
Market Cap: ~$9 million
Risk Level: Very High
Native Stablecoin: reUSD
Created by the developers of Convex and Yearn, Resupply takes their expertise in yield optimization to a new frontier. The protocol enables up to 20x leverage on yield-bearing stablecoins while minimizing liquidation risks through innovative mechanics.
Users deposit stablecoins like crvUSD or frxUSD to mint reUSD, which maintains the underlying yield while enabling leveraged positions. This creates a flywheel effect—more leverage means more crvUSD borrowed from Curve's LlamaLend, driving up utilization and rates. Since launch, LlamaLend TVL doubled from $38M to $84M.
The tiny market cap relative to potential makes this the highest risk/reward play in the Curve ecosystem. RSUP stakers receive all protocol revenues, and given the Convex team's track record, they may implement similar vote-locking mechanics to capture additional value.
Curve Ecosystem Links:
LQTY (Liquity V2) - The DeFi-Native Rate Pioneer
Market Cap: ~$100 million
Risk Level: Medium
Native Stablecoin: BOLD
Liquity launched V2 in January 2025, introducing BOLD—a stablecoin with the most DeFi-native design yet. In Liquity V2, you can set your interest rate when opening a Trove, anywhere between 0.5% and 1000%, and change it when you want to. This creates fascinating game theory: lower rates mean cheaper borrowing but higher redemption risk, while higher rates provide better protection.
The revenue model is elegantly simple. Liquity V2 dedicates 100% of its revenue to growing BOLD. Specifically, 75% of the borrowers' interest payments go to Earn (Stability Pool depositors), while 25% of the funds go to Protocol Incentivized Liquidity. This can create yields exceeding borrowing rates when less than 75% of BOLD is deposited, which is unique in DeFi lending.
LQTY's role has evolved significantly. Modular initiative-based Governance allows LQTY holders to allocate votes, earned over time through staking, to direct the incentive portion to arbitrary addresses. LQTY stakers control where 25% of all protocol revenue flows—potentially millions in annual incentives as BOLD scales. They also continue earning rewards from the still-active V1 protocol.
With TVL at $24M at launch, V2 is early but builds on V1's impressive track record (peak $4B TVL, zero exploits). The new design maintains the core ethos—only backed by crypto assets (no real-world assets or custody by centralized players), not subject to collateral changes and protocol upgrades (immutable)—while fixing V1's limitations through user-set rates and multi-collateral support (WETH, wstETH, rETH).
SYRUP (Maple Finance) - Institutional Lending Bridge
Market Cap: ~$560 million
Risk Level: Medium
Product: syrupUSDC (yield-bearing USDC)
Maple is successfully bridging TradFi and DeFi through undercollateralized lending to institutions. To date, they've originated over $4 billion in loans, with active loans hitting a record $692 million. What sets them apart is real-world credit underwriting—they're lending to actual companies with actual revenues.
The May 2025 partnership with Cantor Fitzgerald for a $2 billion Bitcoin-backed lending facility is a game-changer. Traditional Wall Street is using DeFi rails for institutional lending. Users deposit USDC to mint syrupUSDC, earning 8-12% yields from these institutional loans, significantly higher than traditional DeFi lending.
SYRUP token holders don't just govern—they actively participate. Stakers can underwrite specific lending pools, taking junior tranche risk but earning 10-20% of the interest generated. Pool delegates (professional underwriters) stake SYRUP as skin in the game, aligning incentives throughout the system.
INV (Inverse Finance) - The Fixed-Rate Pioneer
Market Cap: ~$16 million
Risk Level: Very High
Native Stablecoin: DOLA
Inverse Finance took $21 million in exploits during 2022 and came back stronger. Their FiRM protocol pioneered truly fixed-rate lending with Personal Collateral Escrows (PCEs)—your collateral sits in your own contract, eliminating rehypothecation risk entirely.
DOLA, their stablecoin, has found product-market fit through clever partnerships. It's one of the most liquid stablecoins on Curve and Velodrome, earning significant trading fees. The "DOLA Fed" mechanism allows the protocol to mint DOLA directly into AMM pools, capturing the LP fees while maintaining the peg.
Here's the clever bit: INV stakers receive DBR (DOLA Borrowing Rights) tokens as streaming rewards. Borrowers must hold DBR equal to 8% of their loan annually, creating constant buy pressure. Current DBR yield to INV stakers exceeds 15% APR, paid in a token with forced demand.
RESOLV - The Technical Innovation Play
Market Cap: ~$53 million
Risk Level: High
Native Stablecoin: USR
RESOLV solved the stablecoin trilemma by maintaining stability, capital efficiency, and yield generation without liquidation risk. Their USR achieves true delta neutrality by holding ETH/stETH collateral while maintaining perpetual short positions, completely hedging out crypto price risk.
The protocol offers stUSR (6% APY for standard users) and RLP tokens (10.9% APY for those providing insurance). This dual-token model creates a sustainable yield source—RLP holders take first-loss risk but earn higher rewards. With over $1.7 billion in cumulative volume, they've proven the model works at scale.
Backed by $10 million from cyberFund and Maven 11, RESOLV has the runway to execute. The protocol generates revenue from mint/redeem fees (0.2%), funding rate arbitrage, and collateral staking yields; token holders will receive a share of all protocol revenues.
The Thesis
Stablecoin adoption isn't slowing down—it's accelerating.
This acceleration of activity and growth of stablecoin supplies directly correlates to more fees generated by the underlying DeFi protocols.
What makes this trend compelling is the shift from speculation to actual revenue generation. Unlike most crypto tokens, these protocols make money from real usage. As stablecoins march toward the projected $400B in 2025 and the unholy numbers projected for 2030, the math becomes pretty straightforward—more volume, fees, and value accrual = higher valuations demanded by their respective tokens.
The protocols creating their own stablecoins have an edge that I find particularly interesting. They control the full stack from minting to yield generation. It's vertical integration, DeFi style. Every protocol fee, every stability fee, every basis point of yield—some or all can flow back to token holders in various ways if governance decides.
Of course, there are risks—stablecoin protocols face challenges, regulatory uncertainty, smart contract risks, and the eternal question of sustainable yield. Some of these tokens will massively outperform, and others will fade into irrelevance. The market will probably overvalue some and completely miss others.
I've already positioned myself across a few of these protocols because I think the risk/reward makes sense here. Not because it's guaranteed money (far from it), but because stablecoins solving actual problems have caught the attention of all major financial institutions and governments, it feels like betting on infrastructure rather than narratives. Whether that thesis plays out, you'll be able to tell by whether I'm eating beans on toast daily or not.
I hope you enjoyed reading, and to end, here's the El Clásico disclaimer that this isn't financial advice—just my perspective on where value might accrue as this trend unfolds. Do your own research and never invest more than you can afford to lose. Everything may go to 0 (I hope not).