I'd guess most of the centrally managed ones make their money investing the deposited USD to earn a safe rate of return as profit.
The defi ones that take colleteral, like DAI, make money by charging a borrow rate on the DAI that's minted and another fee if your account is liquidated.
Yeah and liquidating these might tank something else, which might tank something else, which might piss people off enough to get serious regulation through. That is the problem.
Contagions are all over the credit markets. The whole thing is a house of cards and always has been.
We have all kinds of regulations for just how much collateral a bank must have, for example, but 2008 still happened.
I'd rather have firms fail if they make bad decisions.
Risk-taking is incentivized when banks can say "oh no, we followed all the rules but somehow still went insolvent, must be someone else's fault... definitely not ours for not researching our investments... so how about a giant free loan?"