Torch Finance launches a yield-bearing stablecoin

While some are waiting for Ethena to launch on TON, another project has already taken the lead by offering its own yield-generating stablecoin. Torch Finance, previously known for creating a stableswap DEX, has now introduced a new product called tgUSD, along with its mini-app @tgusd_official_bot.

Through this app, users can mint the tgUSD stablecoin by depositing an equivalent amount of USDT. They can also stake tgUSD to receive stgUSD in return. While staking Toncoin is a long-standing option in the TON ecosystem, some may prefer to earn similar yields without exposure to volatility — for these users, staking a stablecoin may be a more suitable alternative.

Although the dual-token system resembles Ethena (with its USDe and tsUSDe), the projects are quite different. In the case of tgUSD, the yield comes from using the staked funds as liquidity across various protocols. Interestingly, these protocols aren’t limited to TON — they also include Ethereum, Aptos, and SUI, with cross-chain transfers facilitated by tools like LayerZero.

One might ask: “What happens if one of these protocols gets hacked and user funds are invested there?” Indeed, there is a small risk, which the app acknowledges in its FAQ section. However, the diversification across multiple blockchains reduces the likelihood of a total loss across all platforms.

The full name of tgUSD is listed as “Telegram USD.” To clarify: this does not mean that the Telegram messenger itself launched the token. The name likely refers to the fact that users interact with the stablecoin through a Telegram Mini App — making it a “stablecoin for Telegram users.”

Due to regulatory restrictions, the mini-app is not available everywhere. It is currently inaccessible in the USA, Europe, and OFAC-sanctioned regions. Additionally, withdrawals from staking are temporarily restricted — they are expected to become available seven days after launch.

Naturally, many will wonder: “What’s the yield?” During our test, when we deposited a few dollars into stgUSD, the app showed a current yield of over 60% APY. However, this is clearly a temporary effect. The actual protocols in which funds are invested tend to offer yields more typical of low-risk DeFi — mostly less than 10%.

UPDATE: After we published this post, Alan (founder of Torch Finance) provided a bit of new information:

As a quick update, in response to the needs of our community members, we’ve accelerated the deployment of the Stable Swap pool and have also enabled the unstake function. This means users can now freely unstake without having to wait 7 days!

@thedailyton