How stablecoin yield works with Morpho vaults

Trezor Suite lets you earn yield on USDC and USDT by depositing them into Morpho vaults, where they're lent to borrowers. Borrowers pay interest, and that interest flows back to you.

This article explains where the yield comes from, how the vaults work, and what to know before you start.

What stablecoin yield is

A stablecoin is a cryptocurrency pegged to a real-world currency, usually the US dollar. USDC and USDT are the two largest. For more, see What is a stablecoin? How fiat-pegged crypto tokens work.

Stablecoins hold their value, but they don't grow on their own. They just sit in your wallet.

Stablecoin yield changes that. You deposit stablecoins into a lending protocol. Borrowers pay interest to use them, and that interest comes back to you as yield. The rate is expressed as an APY (annual percentage yield).

This kind of lending is a core part of decentralized finance (DeFi). New to DeFi? Start with What is DeFi?

Where the yield comes from

The yield comes from real borrowing demand. Borrowers pay interest to access your stablecoins, and that interest is your return.

When more people want to borrow, rates go up. When demand falls, rates drop. The APY you see today reflects current market conditions and will move over time.

What a lending vault is

You don't lend to borrowers one by one. Your deposit goes into a vault: a smart contract that pools funds from many depositors and lends them across approved markets.

A curator manages the vault. The curator decides which lending markets to use, what collateral borrowers must post, and how to adjust risk over time. Depositors rely on the curator's strategy instead of making those calls themselves.

Think of it like putting money into a managed fund. The vault handles allocation. You hold a position in the vault.

Morpho and Steakhouse

Trezor connects you to vaults on Morpho, curated by Steakhouse. Trezor pre-selects these vaults so you don't need to evaluate protocols yourself.

Morpho is one of the largest decentralized lending protocols on Ethereum. It has been audited by multiple independent security firms.

Steakhouse is an independent curator that manages day-to-day allocation inside the vaults. The vaults Trezor uses are the USDC Prime and USDT Prime vaults.

Vault tokens: your deposit receipt

When you deposit into a vault, you receive a vault token that represents your share. A USDC deposit returns trSHUSDCp. A USDT deposit returns trSHUSDTp.

The vault token is your claim on the underlying stablecoins plus any yield earned.

• The vault token is how you hold your position. If you lose access to it, you lose access to your stablecoins.
• Don't send vault tokens to another wallet, person, or exchange unless you're certain what you're doing. An exchange won't credit it as USDC.
• To convert vault tokens back into stablecoins, withdraw from the vault in Trezor Suite. You'll receive your original deposit plus the yield it earned.

Trezor Suite displays your position in stablecoin terms, so you don't need to track the vault token balance manually. The token stays in your wallet, under your control.

How fees affect your yield

A 10% fee applies to the yield your deposit earns. The fee is deducted through a smart contract managed by Trezor. You keep 90% of the yield.

The APY shown in Trezor Suite is already the net figure. The 10% has been subtracted before you see it, so the displayed rate is what you actually receive.

What are the risks?

Depositing into a vault is different from holding stablecoins in your wallet. Your coins are lent out through smart contracts, and that introduces specific risks.

• Smart contract risk: A bug or exploit in the contracts could lead to loss of funds. Morpho has been audited by multiple firms, but no audit guarantees a contract is exploit-free.
• Liquidity risk: If borrowers are using all available funds in a vault, your withdrawal may be delayed until liquidity returns. The selected vaults are designed to minimize this, but it can happen.
• Variable APY: The rate when you deposit can change at any time. Past rates don't predict future performance.

Stablecoin Yield FAQs

Where does the yield come from?

Borrowers pay interest to access your stablecoins. That interest is passed back to you as yield. The return reflects real lending activity on the protocol.

Is the APY fixed?

No. It moves with borrowing demand. High demand raises the rate. Low demand brings it down. The displayed rate reflects current conditions.

What is a curator, and who is Steakhouse?

A curator defines how a vault operates: which markets it uses, what collateral is accepted, and how risk is managed. Steakhouse is the independent curator of the USDC Prime and USDT Prime vaults that Trezor uses. They manage allocations across established lending markets and have a publicly documented methodology.

Why Morpho?

Morpho has been live on Ethereum since 2022 and has operated through multiple market cycles. It's one of the largest lending protocols on Ethereum, audited by multiple independent firms. Its vault architecture lets Trezor select specific vaults instead of exposing you to the wider open market.

What are the vault tokens I receive?

ERC-20 tokens (trSHUSDCp for USDC, trSHUSDTp for USDT) that represent your position in the vault. They're your claim on deposited stablecoins plus accrued yield. Hold onto them and convert back to stablecoins by withdrawing in Trezor Suite.

Can stablecoins depeg?

It's possible. USDC and USDT have generally held close to $1, but both have had brief depeg events in the past. That risk exists wherever you hold the stablecoin and is independent of the vault.

Are my assets held by Trezor?

No. Trezor never holds your funds. Your stablecoins go directly into Morpho vaults on Ethereum through smart contracts.