Yield-bearing stablecoins are gaining traction, with the modular DPoS network Elixir recently introducing a new stablecoin, DEUSD, that offers holders the opportunity to earn returns from the crypto asset. Since Aug. 7, DEUSD’s market value has grown from $952,443 to $115.92 million.

Yield-Bearing Stablecoins Continue to Rise

In the midst of the rising popularity of yield-bearing stablecoins—such as those developed by Blast, Ethena, Mountain Protocol, Paxos, and Gyroscope’s recently launched “savings gyd” (SGYD)—a new player has entered the market. On Wednesday, Elixir, a modular DPoS network with 13,563 validators, launched DEUSD, a yield-bearing U.S. dollar-pegged crypto token, similar to Ethena’s USDE.

DEUSD is a fully collateralized synthetic dollar supported by the Elixir Network. It is minted using STETH and SDAI, with the deposited collateral used to short ETH, thereby establishing a delta-neutral position. The Elixir team asserts that DEUSD achieves greater decentralization compared to its competitors by utilizing verifiable proofs of execution and open-source code. DEUSD also claims to minimize basis exposure in unfavorable funding conditions.

DEUSD’s documentation notes:

Through leveraging this funding rate basis trade on Ethereum, the Elixir network creates a synthetic dollar capturing positive funding rates. Even in a negative funding rate environment however, DEUSD is built to be resilient.

DEUSD has experienced significant growth in market valuation, rising from $952,443 to $115.92 million—a 12,071% increase within 24 hours. This swift expansion indicates a growing demand for yield-bearing, dollar-pegged assets in the crypto market. However, the collapse of Terra’s UST and the downfall of the yield-bearing decentralized finance protocol Anchor have highlighted the potential risks within this ecosystem.