Crypto yield is undergoing a renaissance. What began as a speculative frenzy—culminating in the 2022 collapse—is now rebuilding into sustainable, compliant opportunities for crypto holders to earn returns without risking past catastrophes. These returns, earned by putting digital assets to work, are no longer the Wild West gamble they once were. The $3.4 trillion crypto market is now producing institutional-grade yield opportunities, a stark contrast to the opaque, high-risk products that collapsed in 2022.
The scale is enticing. A small shift from established US household deposits—which reached $19.4 trillion in 2024—could channel hundreds of billions into yield-bearing crypto products. While native crypto platforms are leading the charge in developing these yield opportunities, traditional institutions are tiptoeing in through tokenized treasury operations, with early examples including BlackRock’s tokenized funds and blockchain-based corporate cash management. Limited institutional adoption alone could unlock an additional $300-600 billion market.
When Traditional Banking Fails You
Victor Levrero learned this lesson the hard way. When Argentina’s inflation soared to 94.8 % in 2022, his bank offered 30 % interest on pesos, which sounds generous until you realize inflation was nearly 95 %. Meanwhile, in just one year, the peso officially depreciated by about 65 %, a staggering one-year loss.
Traditional institutions weren’t just failing to protect his wealth; they were systematically destroying it. That’s when Levrero discovered crypto platforms offering 13% annual returns on US dollar-backed stablecoins. For him, it wasn’t speculation—it was survival. Levrero was not alone. Across Latin America and other economically unstable regions marked by currency collapses, banking failures, and capital controls, millions made the same calculated decision: to save in stablecoins.
In developed economies, however, the story was different but equally troubling. Near-zero interest rates meant savers’ money earned almost nothing, failing to keep up with even modest inflation. Traditional savings accounts offered a meager 0.5%, while crypto platforms dangled returns of 15–50%, sometimes more, luring both investors and speculators.
The Collapse of 2022
In emerging markets, crypto was a lifeline; in developed markets, it was a greed-fueled speculative rocket—setting the stage for crypto’s 2022 meltdown.
As yield-chasing accelerated, dangerous practices took root. Platforms scaled rapidly, luring users with ever-higher rates while rehypothecating customer funds into risky strategies. Many built overleveraged trades and circular lending loops, often hidden from users. These eye-popping return figures should have raised red flags, but instead, they fueled a frenzy driven as much by speculative fervor as by the search for yield.
When stress hit, the house of cards collapsed, and failures cascaded like dominoes, wiping out billions in customer funds. Voyager Digital collapsed with $1.3 billion locked away. BlockFi shuttered operations, affecting 100,000 users. FTX’s implosion wiped out another $8 billion. Combined with Terra Luna’s collapse and cascading liquidations, over $2 trillion was erased from crypto markets. In the end, yield-chasing retail investors absorbed much of the carnage. Yet despite this devastation, crypto yield didn’t disappear—it evolved.
Building on Stronger Foundations
So where does yield come from when it’s not just smoke and mirrors? Today’s platforms operate like digital banks with three revenue streams: lending (earning the spread between deposits and loans), staking (validating blockchain transactions for rewards), and market-making (capturing fees for facilitating trades).
Platform Evolution: The key difference between today’s platforms and the doomed operators of 2022 is transparency and structure. Unlike the opaque operations of 2022, some of today’s platforms publish real-time reserve proofs, use segregated custody that prevents rehypothecation, and offer institutional-grade insurance. Returns are backed by transparent collateral, live auditing, and regulated assets like US Treasuries. Yields are lower but sustainable—built on verifiable lending spreads rather than Ponzi-like structures.
Investor Sophistication: Equally important has been the shift in investor behavior. The “number go up” mentality—the blind focus on rising returns without considering fundamentals or risks—has been replaced by institutional-level due diligence. Investors now demand regulatory clarity and audit trails, understanding that 4-6% Treasury-backed yields are more valuable than 20% promises from offshore entities.
Due diligence today means evaluating publicly verifiable asset backing, legal jurisdiction, and whether returns are backed by excess-collateralized loans—or inflated through hidden, opaque leverage strategies. A platform’s reputation—built through regulatory alignment, user experience, and proven resilience in past market cycles—is now part of the value proposition. Trust is no longer a tagline. It’s a checklist.
The platforms mentioned below represent different market approaches and risk profiles and do not constitute financial advice. Yield claims significantly exceeding traditional risk-free rates warrant careful evaluation of underlying business models, regulatory compliance, and counterparty risks.
The Industry Heavyweights
Three players currently lead the charge, collectively managing over $26 billion in yield-generating assets as of mid-2025.
Coinbase: Regulatory clarity and US jurisdiction as competitive moats. As a publicly listed US company under SEC oversight, Coinbase offers institutional investors custodial transparency, direct US jurisdictional protection, and audited reporting. The trade-off for investors is: lower yields but compliant, onshore crypto exposure, eliminating offshore counterparty risks with strong regulatory certainty. This positions Coinbase to attract corporate treasuries and risk-conscious institutional funds.
Binance: Operating in over 180 countries, Binance commands unmatched trading volumes. However, its global scale faces intensifying regulatory challenges, leading to market exits in several regions and raising questions about its long-term compliance strategy. The viability of its yield offerings depends on navigating these hurdles while preserving the global liquidity advantage that drives its dominance.
Kraken: Conservative positioning for institutional reliability. Kraken prioritizes security and compliance over aggressive expansion, targeting institutions that value stability over maximum returns. Its spotless track record positions it as the “safe choice” in a comparatively volatile sector.
Emerging Models: From High Yield to High Trust
While giants dominate market share, newer platforms are differentiating through enhanced risk management, real-time transparency, and mission-driven models. The industry shift toward overcollateralized lending, insurance backing, and social impact integration represents a broader evolution from pure profit maximization to sustainable business models.
Take CoinDepo, which launched in 2021, offers up to 24% APY on stablecoins and 18% on crypto through overcollateralized loans backed by guarantors and Fireblocks insurance. By merging blockchain efficiency with TradFi safeguards, it delivers secure, interest-earning deposits, low-risk lending, and charitable giving while supporting NGO Damark in Africa—hardwiring accountability and proving that high returns and social impact can coexist in responsible crypto finance.
Other platforms pursue varied approaches within this framework. Maple Finance leads permissioned DeFi lending with vetted institutional borrowers and rigorous underwriting, targeting corporate treasuries with transparent credit assessments and lower volatility exposure. Meanwhile, platforms like Aave and Compound focus on institutional-grade disclosures and borrower credit assessments.
The diversity of approaches—from Coinbase’s regulatory-first model to newer platforms’ yield-focused strategies—reflects an industry still defining its risk-reward equilibrium.
The Regulatory Crossroads
Under former SEC Chair Gary Gensler (2021-2025), yield-bearing crypto products were treated as unregistered securities, effectively shutting down much of the market. With current SEC Chair Paul Atkins, the agency has signaled a shift toward clearer, innovation-friendly guidelines.
In a landmark move for crypto regulation, the Generating Effective National Income Using Stablecoins (GENIUS) Act passed the Senate in June 2025 with strong bipartisan support and is now advancing through the House of Representatives. If enacted, it would create the first comprehensive federal framework for dollar-backed stablecoins, setting clear rules for reserves, custody, and oversight. This long-awaited clarity could unlock a wave of stablecoin adoption, expanding the universe of users who will inevitably seek yield on their balances—much like Bitcoin adoption surged after spot ETF approvals opened the floodgates to institutional capital.
Meanwhile, Europe’s MiCA regime is moving ahead, categorizing stablecoins under strict requirements and prohibiting platforms from offering direct interest on them. This pushes providers toward tokenized money market funds or compliant lending structures, favoring sustainability and institutional trust over short-term yield chasing. Players like Ondo Finance, Maple, and others are already pioneering tokenized Treasury strategies within this framework.
The Road Ahead
The endgame isn’t crypto replacing banks; it’s crypto building its own financial infrastructure—programmable money, transparent yields, and 24/7 settlement are becoming baseline expectations for digital asset holders. For CFOs and treasury managers, this is a strategic inflection point that warrants attention.
Institutions engaging today—allocating to regulated platforms like Coinbase or tokenized Treasury products from BlackRock—aren’t speculating. They’re running institutional-grade pilots, building operational familiarity with emerging infrastructure, and forging relationships while regulatory frameworks crystallize.
The calculus is simple: early movers gain better partnerships, deeper integrations, and learning curves before mass adoption. Those waiting for full regulatory clarity risk entering later from weaker positions.
Crypto’s yield infrastructure is evolving into a new financial standard for digital assets. The question isn’t whether this transition will happen but how to capitalize on it early and decisively because those who don’t lead will inevitably fall behind.
Read the full article here
