MetaMask launches new stablecoin yield feature on wallets

MetaMask will allow users to earn passive yield through storing stablecoins in their wallets. The new feature is powered by the Aave protocol. How does Stablecoin Earn work?

On July 29, the crypto wallet service launched its first stablecoin yield product. Dubbed “Stablecoin Earn,” users can now begin to deposit their stablecoins and start earning passive rewards directly from the mobile app.

According to the official announcement on the crypto wallet’s X account, users can use the MetaMask mobile app to deposit stablecoins such as USDC (USDC), USDT (USDT) and DAI (DAI). Powered by the Aave (AAVE) protocol, users will be able to deposit stablecoins directly through Aave via the mobile wallet app.

The feature is currently live on Android devices and will be accessible for iOS users later this week. The feature does not require user to lock up their stablecoins for any period of time. In addition, users are granted full self-custody of their assets, as they are directly controlled through MetaMask.

How does MetaMask’s Stablecoin Earn work?

For users who already have an account linked to the platform’s wallet, all they have to do is deposit stablecoins into the Aave lending protocol from inside the wallet. Users will not incur any additional fees from the platform.

By depositing stablecoins into the Aave lending protocol, users will then receive what are called “aTokens.” This means that if the user initially deposits USDC, then they will receive the same amount in aUSDC.

After receiving aTokens, the user can monitor the growth of their invested token’s accumulated passive yield through the platform’s mobile app display feature called variable reward rates.

As mentioned previously, users can withdraw their funds at anytime, this is because the tokens are not tied to a lock-up period unlike most services. The aTokens held in the wallet represent the amount of stablecoins the user can withdraw.

Most recently, Binance and PayPal have unveiled stablecoin rewards products on their respective platforms. Binance’s latest addition being the RWUSD, which tokenizes U.S. Treasury Bonds and other RWAs that offer a yield of 4.2% APR.

Meanwhile, the PYUSD (PYUSD) Rewards program allows holders to accrue rewards daily based on the amount of stablecoins they hold combined with the applicable “PYUSD Rewards Rate.” As long as the user holds at least 1.0 PYUSD, then they stand a chance of receiving passive yield.