Navigating Solana's Top Yield Farming Opportunities

Investing in stablecoins or Solana's native liquid staking tokens may not be as thrilling as hunting the next breakout token, but can provide reliable ways to earn.

Stablecoins provide price stability, while LSTs allow you to earn base staking rewards while maintaining liquidity. Through DeFi platforms like Kamino, Drift, and Save (formerly Solend), you can put stablecoins and LSTs to work, amplifying your earnings through yield farming strategies.

Whether you prefer passive, lower-risk returns or are willing to take on higher risks for greater rewards, this article breaks down the top yield opportunities for leading stablecoins like USDC and PYUSD, as well as Solana's leading LSTs, helping you find the best match for your risk profile.

🇺🇸 Stablecoins

Stablecoins on Solana have shown explosive growth this market cycle. While USDC dominates the chain, a unique phenomenon given its size compared to Tether’s USDT, Paypal’s PYUSD has recently experienced breakneck growth after its recent launch on the chain, juiced by rewards across DeFi protocols.

These stablecoins present relatively low-risk options for yield farming when used in DeFi protocols like Kamino, Drift, and Save (formerly Solend). Whether you're looking for stable yields or higher risk-reward scenarios, these assets provide essential options for those aiming to hedge against market volatility while earning consistent returns.

🟩 USDC

⏺ Kamino

Kamino Finance offers several yield options for USDC holders, with its main pool vault currently providing ~3.5% APY, lower than its historic 6-9% range but still reliable for passive, low-risk returns. For higher yields, Kamino’s altcoin pool offers ~7.5% APY on USDC, and JLP (Jupiter Liquidity Provider) pool provides ~6.6% APY, with its concentrated liquidity strategy making it an attractive option for users looking to balance risk with higher returns.

⏺ Drift

Trading protocol Drift also allows users to earn yield by lending USDC. Though yields here are modest, at around 3-4%, well below previous highs, they provide a stable, low-risk opportunity for those not seeking aggressive risk. Additionally, Drift’s Insurance Fund offers significantly higher yields, currently at ~15% from earning fees from trades, borrows, and liquidations, but carries greater risk as it acts as the protocol's backstop for maintaining its solvency.

⏺ Save  

Algorithmic lending/borrowing platform Save offers 4-5% APY on USDC lending in its main pool. The platform also has other permissionless pools not deployed by the protocol, like its JLP/SOL/USDC pool, which currently boasts 8.5% APY for those willing to engage in riskier liquidity strategies.

🟦 PYUSD

⏺ Kamino

PYUSD is a newer entrant in the Solana ecosystem, but it has quickly gained momentum thanks to Kamino’s aggressive yield strategies. While initial yields were as high as 30%, they have since leveled out to ~7%, the highest among Kamino’s main pool stable vaults. Kamino also just onboarded PYUSD to the JLP (Jupiter Liquidity Provider) pool, with rates higher than its main vault at ~8.5%.

⏺ Drift

Yields from Drift’s lending vault sit slightly higher at ~10%, making the platform an appealing option for PYUSD. Further, in its Insurance Fund, Drift offers ~18.5% APY, though remember, this comes at much higher risk.

⏺ Save

Save’s PYUSD main pool yields currently sit at ~12%, and they look to be increasing recently, while Drift and Kamino’s yields are decreasing. If this trend continues, Save may be the best platform for users looking to put PYUSD to work without taking on additional risk. 

💦 LST Yields

Liquid staking tokens (LSTs) are a crucial part of Solana's staking economy, allowing users to stake SOL while retaining liquidity to use within the broader DeFi ecosystem. The three largest LSTs by market cap on Solana — JitoSOL from MEV-enhanced liquid staker Jito, mSOL from well-established Marinade Finance, and JupSOL offered by Jupiter exchange in partnership with Sanctum — offer base yields from staking rewards, ~7.5%, ~8.12%, and ~8%, respectively, with additional opportunities to amplify these returns through DeFi, especially on Kamino.

For each of these LSTs, there are options to earn additional yields through Kamino’s main vaults or leveraged strategies. The main vaults provide passive returns on top of the base staking rewards, while the leveraged yield strategies offer higher returns for those comfortable with more risk.

⬛️ JitoSOL

⏺ Main Vault Yield

Kamino’s main vault for JitoSOL offers a modest yield of 0.04%, adding passive income to the base staking rewards. This option is suitable for those looking for stable, low-maintenance returns.

⏺ Leveraged Yield

For users looking to maximize their returns, Kamino’s leveraged yield option for JitoSOL offers a much higher yield of up to ~10.5% currently. This strategy uses leverage to amplify returns, though it carries increased risk if these derivative assets were to depeg, compared to just holding the LST alone.

🟩 mSOL

⏺ Main Vault Yield

Kamino’s main vault for mSOL provides a 0.11% yield, slightly enhancing the base staking rewards with passive DeFi returns. This vault is ideal for earning a bit extra while holding mSOL long-term.

⏺ Leveraged Yield

For those unafraid of risks and looking to ramp up the rewards, Kamino’s leveraged staking strategy for mSOL pushes yields up to a maximum of ~14.5%. 

🟧 JupSOL

⏺ Main Vault Yield

JupSOL’s main vault yield on Kamino is 0.02%, offering a small additional return on top of the base staking rewards. While low, this provides a steady, passive income stream for JupSOL holders looking to sleep easy at night.

⏺ Leveraged Yield

Kamino’s leveraged JupSOL pool the highest yields available at ~14.7%. By leveraging the staked JupSOL in DeFi, users can achieve significant returns, making this strategy ideal for those looking to maximize their staking yield while accepting higher risk.

Closing Thoughts

In summary, stablecoins and LSTs on Solana offer a variety of yield farming opportunities, allowing users to grow their most established or stable assets based on their risk tolerance. 

PYUSD currently provides the highest yield opportunities among stablecoins, particularly on platforms like Drift, where APYs reach up to ~18%. On the liquid staking side, JupSOL and mSOL currently hold the highest leveraged yields at ~15%, offering substantial returns for those willing to accept the risks of utilizing leveraged strategies. Be sure, though, to monitor these vaults as their yields fluctuate regularly.

Whether you opt for lower-risk stablecoin vaults or higher-risk LST farming strategies, there are plenty of opportunities to put your assets to work in Solana's DeFi ecosystem.