It seems like stablecoins are becoming a nice niche in DeFi farming. Personally, they’re my favorite.
Short basics: stablecoins are commonly kept to the peg by one of the three following mechanics
Collateralized, for example, USDT (fiat-backed) or DAI (crypto-backed)
Algorithmic, unbacked, adjustments to supply (elastic supply) to remain peg
Treasury Bond backed, providing interest
The list does not include major protocols like Maker Dao (DAI). The big players like USDC, USDT, and DAI are mostly only providing APY based on lending - for example, on AAVE and Curve (basically a bank). Anyways, I look at experimental protocols as degen with higher risk using liquidity pools.
*To conclude: to farm means to get rewarded for providing liquidity in an LP (liquidity pool).
**Beware: the peg is not guaranteed.
***Beware: some might be rug pulls, DeFI peg protocols are considered very high risk until proven otherwise over a longer timeperiod.
On BSC one of the only legit feeling stables I’ve discovered is USDO, they got a nice portal where you can deposit a wide range of tokens as collateral. You get % for doing this, and on top of it you can go to Beefy and have a USDO / USDT farm pure stables with no risk of IL
Ofc USDO needs to stay pegged, but overcollateralized stables are the most stable (look at DAI)