DeFi Yields Surpass Treasuries, Sparking Hopes for 'DeFi Summer 2.0'
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DeFi yields have exceeded yields from conventional investments like U.S. Treasuries, raising hopes for rekindled interest and maybe another DeFi Summer. MakerDAO's DAI Savings Rate provides users with a 15% yield.
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DeFi rates began to compete with and later outgun the Secured Overnight Financing Rate (SOFR) in October 2022, making crypto-native DeFi products more appealing than tokenized conventional financial products.
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Strong institutional tailwinds have driven the current crypto bull market, kicked off by the arrival of spot bitcoin ETFs and interest in tokenizing real-world assets.
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DeFi lending rates might look unsustainably high, but loan-to-value ratios are relatively low on platforms like Morpho Labs.
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The super-high yields available on platforms like Ethena Labs follow a basis trade rather than pure leverage, so rates could come down but likely no blowups.