Stablecoins were created primarily for decentralized finance (defi) protocols to encourage users to arbitrage interest rates (APRs) and yields (APYs). These competitive lending rates and policies (like daily compounding interest) provide liquidity pools for miners, traders and exchanges. The stablecoin market stands at $22 billion, less than 10% of Bitcoin at $250 billion. The market is dominated by Tether (USDT) at 75% market cap, followed by USD Coin (USDC) at 12.87%, DAI (DAI) at 4.36%, Binance USD (BNB) at 3.44%, Paxos Standard (PAX) at 1.77%, and True USD (TUSD) at 1.45%. Other than Tether, USDC is the only other stablecoin with over a billion-dollar market cap. Defi offers better lending and borrowing rates than Wall Street, and it has faster, bigger, and more creative games than Las Vegas. Crypto-friendly banks like BlockFi and Nexo now offer yields as high as 8.5% and 12% (respectively) on most stablecoins with up to $100 million in insurance thanks to BitGo. Binance holds more than $1 billion in stablecoins. So what's the catch? On September 15, 2008, Lehman Brothers declared the largest bankruptcy in United States history, declaring $639 billion in assets and $613 billion in debts. Most of their assets were AAA-rated mortgage-backed securities (MBS) that were deemed worthless within days. Stablecoins have complex operations with regulatory risk, counterparty risk, security risk, tax risk, legal risk, risk of human error, and they absorb all of Ethereum's massive fee risk. This probably justifies the 8-10% yields advertised on all these assets. Tether has traded as low as $0.90 in April 2017 and even $0.59 on its volatile opening day. Tether is like the Wynn Hotel in Las Vegas, while bitcoin is the gold buried in the hot desert. Defi can be a fun and profitable endeavor, but don't get distracted by the bright flashing lights—stablecoins have risks.