The risks, in plain English

A stablecoin is a crypto token designed to stay worth $1. Lending or depositing it in DeFi can pay more than a bank, but that extra yield is payment for taking on risks a bank account doesn't have. No deposit insurance applies.

1. Smart-contract risk

Your money sits in code. If that code has a bug or gets hacked, deposits can be lost, sometimes all at once. Older, larger, audited protocols are generally safer, but audits are not guarantees.

2. Depeg risk

Stablecoins can lose their $1 value if the issuer, its bank, or its backing assets fail. USDC briefly fell to about $0.88 in March 2023 when a bank holding part of its reserves collapsed. Algorithmic or synthetic dollars carry more of this risk than fully cash-backed ones.

3. Borrower and strategy risk

Interest comes from somewhere: usually borrowers, trading strategies, or real-world loans. If borrowers default or a strategy loses money, depositors can take the hit. Vaults run by a curator add the risk that the curator makes bad choices.

4. Reward-token yield

Some rates include payouts in a protocol's own token. Those tokens can fall in price, so the real rate may be lower than shown. We flag pools where part of the APY is token rewards.

5. Liquidity and lockups

Some pools make you wait days to withdraw, or can run out of cash to pay withdrawals during a rush. Fixed-term products (like Pendle PTs) pay their stated rate only if you hold to maturity.

6. Chain and bridge risk

Smaller blockchains and bridged tokens add another layer that can fail or be hacked.

Staking risks

Staking rewards are paid in the coin you stake, so the first and biggest risk is simply its price. On top of that:

• Slashing: if a validator double-signs or goes offline for long, the network can burn part of its stake, and delegators share the loss.
• Unbonding and lockups: native staking often makes you wait to get coins back (21 days on Cosmos Hub, 14 on Celestia, up to 7 on BNB Chain). Prices can move a lot meanwhile.
• Liquid staking tokens (stETH, JitoSOL…) avoid the wait because you can sell them, but in a panic they can trade below the coin they represent, and they add smart-contract risk.
• Restaking reuses your stake to secure other services for extra yield. More rewards, more ways to get slashed, more contracts, and part of the reward is often points rather than money.
• Exchange-issued tokens (from Binance, Coinbase, Bybit…) depend on the exchange. We label them and let you hide them.
• Native rate estimates on this site are network-wide, before your validator's commission (often 5–10% of rewards).

How StableRate filters stablecoin pools

• Stablecoin pools only, single asset exposure, and no impermanent-loss risk (as classified by DefiLlama).
• At least $10M total value locked.
• At least 30 days of rate history, so the 30-day average means something.
• Rates above 25% APY (current or 30-day average) are excluded as likely unsustainable, and pools DefiLlama flags as outliers are dropped.
• Liquidity-provider (LP) positions are excluded.

How we filter staking

• Pools from protocols DefiLlama categorises as Liquid Staking, Liquid Restaking, Restaking, Restaked BTC or Staking Pool.
• Single-asset, not flagged as an outlier, at least $1M staked, APY at most 25%.
• No centralised-exchange "earn" rates, because there is no verifiable public source for them.

These filters remove the most obvious traps. They do not make any pool safe. Spread your money out, start small, and never deposit more than you can afford to lose.

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