Stablecoin Yield: Is it a Trap?

After thinking about stablecoin yield for awhile, I asked my self, "Where does the yield come from"? I believe there cannot be a yield on stablecoins unless they are backed by fractional reserves, or nothing at all. Otherwise the stablecoin issuer would be losing money. Therefore, I conclude that stablecoin yields are essentially a trap, where bagholders are paid to not redeem the token which is not fully backed. A Ponzi scheme of sorts. Yield could in theory compensate for risk, but that risk is total and complete annihilation, rather than percentage losses.

I guess I'll stick with holding crypto, in my own wallet.