Borrower interest
The most straightforward source: people borrowing stablecoins against collateral pay interest, and suppliers receive it. The rate moves with demand for leverage, which is why it rises in bull markets and falls in quiet ones.
Risk is contract failure, oracle failure, and bad debt if collateral collapses faster than liquidations can clear.
Treasury and real-world income
Some stablecoin issuers and tokenised products pass through income from short-term government debt. This is genuine external yield and is bounded by prevailing interest rates — a product offering several times that is not doing this.
The gap between a product rate and its underlying source rate is the first thing worth computing. If treasury yield is four percent and the product pays twelve, eight points are coming from somewhere else, and that somewhere else is either leverage, incentives, or risk nobody has named.
Risk is issuer and custody risk, redemption mechanics, and whatever legal structure holds the assets.
Trading fees
Providing liquidity to stable pairs earns fees from swap volume with minimal divergence loss, since the assets track each other. Returns are modest and depend entirely on volume.
Risk is contract failure and the possibility that one of the stablecoins loses its peg, at which point the pool fills with the broken one.
Incentives — and the thing to be suspicious of
Protocols distribute their own token to attract deposits. This is real income while it lasts and is not a yield on the underlying activity.
The pattern to avoid is a fixed high dollar rate with no identifiable payer. FBT Swap shows lending and yield figures with their source and never displays a fixed or guaranteed rate, because no such thing exists on-chain.