In traditional financing, a “risk -free rate”, a interest rate that the investor can expect to earn on an investment that carries zero risks, as a basic standard for all investment decisions. Today, Defi quietly set its equivalent: the basic price for Stablecoins lending.
The emergence of this new basic rate is not just a transient trend-it is a structural transformation that challenges traditional financing by showing the sustainability that depends on the market for high-yield money markets. Sometimes, the return on major platforms like Morpho 12-15 % APY for USDC lendingSignificantly excelled 4-5 % offered by the American Treasury. This installment is not of the excessive excessive range of risk or complex financial engineering, but from the real demand in the market on Stablecoin borrowing.
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Market dynamics yield
The high high -yielding agricultural strategies, especially those that involve the SUSDE (SusDE), was a major driver behind high Stablecoin lending rates. Over the past year, USDE was delivered from Ethena and Staped Usde (SusDE) APY 20-30 % domainProviding a large demand for stablecoin borrowing. This request comes from translator merchants who aim to capture the proliferation resulting from these high returns.
What distinguishes Ethena is its ability to obtain the financing fees that were traditionally required by the central stock exchanges. By offering SusDE, ETHENA allows Defi participants to take advantage of the profits created by traders who pay high financing rates to reach the main assets such as ETH, BTC and Sol. This process puts a democratic access to these profits, allowing the Defi participants to benefit simply by SusDE contract.
The increasing demand for SusDE increases the capital to the Stablecoin economy, which in turn raises the basic return rates on platforms such as AAVE and Morpho. This dynamic not only benefits lenders, but also enhances the broader DEFI ecological system by increasing the return and liquidity in the Stablecoin lending market.
Returns of risk modification in perspective
While the two numbers revenues may raise the eyebrows, the side appearance of these lending opportunities has matured significantly. The leading money market protocols showed flexibility through multiple market courses, with strong liquidation mechanisms and smart contracts tested in time. The basic risks – the smart nodes and the DefeGGIG Stablecoin – are well understood and can be managed by diversifying the wallet via protocols and stablecoin types.
Comparison of the annual return – traditional returns for fixed income versus defi lending returns
Average 30 days starting from February 1, 2025
Source: Traditional Market Data from Bloomberg StationDEFI Data Markets from Vaults.fyi
The effects of traditional financing
For wealth managers and financial advisers, these developments offer an opportunity and challenge. The ability to reach stable and transparent returns requires greatly outperforming traditional products with fixed income. As the infrastructure for the institutional participation in Defi continues to improve, these revenues may become increasingly relevant to income -focused portfolios. While the returns are very response to market cycles, especially the dynamics of the financing rate, the fluctuations are still common. However, the efficiency and transparency of the financial markets on the chain indicates that the reforms of the meaningful return on traditional alternatives can be sustainable in the long run.
With the maturity of the Defi infrastructure, the financial markets on the chain may not be an applicable alternative to fixed-income products- the new standard of transparent returns and risky in digital economy can become, leaving traditional to-playing- higher.
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