The Rise of Stablecoins, Stablecoin Yield & Nook

In 2022, my cofounders Sohail Khanifar , Kenzan Boo and I helped build a new way to earn through the Coinbase app. It was based on the ways of which fellow Coinbase employees were earning more on their idle cash through a practice called DeFi lending. The product was ahead of it's time - but not right at that moment for mass adoption, due to legal and technical complexities. But it remained a way to earn 10x higher than anything any major bank or fintech app like Robinhood was offering.

Since then, we realized that two things that (1) almost everyone's cash is not earning enough to keep it's value and (2) there are a few select people that are ahead of the curve.

We want to close that gap. Nook is designed to change that. By connecting everyday people to safe high yield opportunities like DeFi earning, we want you to have the same access to high-yield opportunities with low risk.

With stablecoin growth comes stablecoin yield

With the IPO of Circle and its rise from $30 a share to $191 a share and a $42.85 billion market cap, stablecoins are officially here. And becoming more mainstream every day.

Stablecoins are now better known as the oil of the financial markets. And as of June 17th, are officially recognized and supported by the U.S. federal government with the GENIUS Act.

But with the rise of stablecoins also comes stablecoin yield - a sleeping giant in terms of its returns and potential for everyday people.

This is the driving force behind Nook since we first started observing Coinbase employees putting their funds to work with stablecoins and DeFi yield in early 2020.

The Rise of Stablecoins

Stablecoins, digital currencies pegged to stable assets like the U.S. dollar, have quietly become one of the most important components of modern finance. With over $162 billion in circulating stablecoins as of July 2025, they now underpin most crypto activity, power DeFi protocols, and serve as a bridge between traditional and blockchain-based finance. The top players — USDT (Tether), USDC (Circle), and DAI (MakerDAO) - dominate the field, with USDT alone accounting for over $110 billion.

It’s become not only highly adopted but very powerful. It's a story about trust and usage. Stablecoins are increasingly used by fintechs, exchanges, and global payment apps to move value instantly and cheaply. According to Visa, over $3.2 trillion in payments were settled using stablecoins in 2024 alone. This velocity has caught the attention of governments. With the recent passing of the GENIUS Act (General Enabling of Nationally Issued and Underwritten Stablecoins), the U.S. has taken a major step toward regulating and embracing these digital dollars.

Now that institutions and governments are leaning in, stablecoins are poised to move from crypto-native infrastructure to a widely accepted mainstream tool for settlement, savings, and yield.

Stablecoin Yield

With large stablecoin balances sitting idle, the next frontier is generating yield from them. Much like how savings accounts accrue interest in traditional banking, decentralized finance (DeFi) has unlocked protocols that generate returns on stablecoins through lending, liquidity provisioning, and treasury investments, often with higher rates than traditional banks.

Stablecoin yields vary widely. On-chain lending protocols like Aave, Morpho and Moonwell typically offer 4% to 10% APR for USDC, depending on supply and demand. More advanced options like protocols investing in tokenized T-Bills, such as Ondo Finance and Mountain Protocol - offer yields in the 4.5% to 5.3% range, backed by short-term U.S. government debt.

With Robinhood announcing Real World Assets (RWAs) in their app, customers can now take more of their assets and wealth on-chain and into crypto to enter the markets. This will lead to more possibilities for trading (eg. Borrow and trade against my $UBER stock) potentially leading to the reward for owning and holding stablecoins to increase, as demand for cash also tightens.

This stable yield is significant when compared to the average U.S. savings account rate of just 0.46% as of mid-2025. But unlike high-yield savings accounts, stablecoin yields are composable — they can be moved, stacked, or integrated into other protocols, giving users more control and flexibility.

Sources: Chainalysis, Fireblocks - thanks to Econofact

Access for Everyone

Despite the promise, accessing these stablecoin yields is not easy.

At Coinbase, we saw engineers and other employees consistently earning 10%+ APY on their yields (and often much higher) by leveraging their crypto on hand and expertise. But eveb today, 5 years later, it's still an unclear experience with opaque risks, poor user experiences, and scams. Wallet creation, bridging, and interacting with smart contracts often require a technical fluency that most people just don’t have.

As a result, only around 53 million people worldwide have interacted with these DeFi protocols. This is a small fraction when compared to the quarter-trillion stablecoins in circulation (now over $263 billion). And the $11 billion in rewards that's been distributed to users.

To us the challenge is clear: stablecoin yield is real. But only accessible to a small group of people know how to access it. That’s the gap being addressed now by the next generation of fintech products.

Current adoption of DeFi across the crypto ecosystem

Why now is the time for Nook

I believe everyone deserves access to these higher yield generating opportunities. Not just the select few.

If stablecoins are going to continue to grow into the trillions and Circle is now valued at almost $200B, then there needs to be a way for everyone to access this. Not just the select few.

After scaling the DeFi lending product to 50M+ customers while at Coinbase, we had to wind it down for 3 key reasons:

• In 2022, the costs of using Ethereum were prohibitive for everyday people. A transaction as simple as lending $5 could could between $3 and $50 to complete the transaction.

• At the time, pre-GENIUS act, the SEC and local governments position(s) on stablecoins and DeFi was not clear. Causing fear, ambiguity and doubt for us and our customers.

• The market sentiment was not right. Rightfully so. The collapse of BlockFi, Celsius and FTX were all looming in people’s minds. Public trust was at all time lows.

A series of new technologies and players were needed.

• L2s, including Base, were introduced with 100x cheaper and faster transaction times. Transactions on Nook will be free.

• With the GENIUS act, we no longer build and work under a cloud of uncertainty. This has given us the confidence to incorporate here in the US.

• With Sam Bankman convicted and in prison, and the victims of BlockFi, Celsius and FTX mostly made whole, the industry has had time to heal and come back to a place of integrity.

This has allowed Nook and the stablecoin yield sector to arise from the ashes. By creating a safe and secure environment to access stablecoin protocols, Nook is the stepping stone to higher savings for all. This is what Robinhood did to stocks.

We are integrating only regulated, audited on-chain protocols like Moonwell Finance and Morpho into a simple mobile experience. No bridging. No wallets. No confusion. Just best-in-class yields from the most trusted protocols — all transparently built and automatically optimized.

People can save with confidence while earning real returns.

This wave of adoption will be powered by Nook: simple, intuitive and trustworthy. That’s why we’re building Nook — so people can earn to live more.

Thanks to our investors, including Amy Yin from defy.vc Hoolie Tejwani at Coinbase and Coulter Mulligan at UDHC for backing us. We are excited to bring Nook to everyone.