Uncategorized
Innovation Amid Yield Compression: DeFi Lending Markets in Q1 2025

The first quarter of 2025 tells a clear story about DeFi’s evolution. While yields across major lending platforms have compressed significantly, innovation at the market’s edges demonstrates DeFi’s continued maturation and growth.
The Great Yield Compression
DeFi yields have declined sharply across all major lending platforms:
The vaults.fyi USD benchmark has fallen below 3.1%, below the U.S. 1-month T-bill yield of ~4.3% for the first time since late 2023. This benchmark, a weighted average across four leading markets, approached 14% in late 2024.
Spark has implemented four consecutive rate decreases in 2025 alone. Starting the year at 12.5%, rates were cut to 8.75%, then 6.5%, and now sit at 4.5%.
Aave’s stablecoin yields on mainnet are around 3% for USDC and USDT, levels that would have been considered disappointing just months ago.
This compression signals a market that’s cooled significantly from late-2024’s exuberance, with subdued borrower demand across major platforms.
The TVL Paradox: Growth Despite Lower Yields
Despite falling yields, major stablecoin vaults have experienced extraordinary growth:
Collectively, the largest vaults on Aave, Sky, Ethena, and Compound have nearly quadrupled in size over the past 12 months, expanding from about $4 billion to about $15 billion in supply-side deposits.
Despite Spark’s consecutive rate cuts, TVL has grown more than 3x from the start of 2025.
As yields have fallen from nearly 15% to under 5%, capital has remained sticky. This seemingly contradictory behavior reflects increasing institutional comfort with DeFi protocols as legitimate financial infrastructure rather than speculative vehicles.
The Rise of Curators: DeFi’s New Asset Managers
The emergence of curation represents a significant shift in DeFi lending. Protocols like Morpho and Euler have introduced curators who build, manage, and optimize lending vaults.
These curators serve as a new breed of DeFi asset managers, evaluating markets, setting risk parameters, and optimizing capital allocations to deliver enhanced yields. Unlike traditional service providers who merely advise protocols, curators actively manage capital deployment strategies across various lending opportunities.
On platforms like Morpho and Euler, curators handle risk management functions: selecting which assets can serve as collateral, setting appropriate loan-to-value ratios, choosing oracle price feeds, and implementing supply caps. They essentially build targeted lending strategies optimized for specific risk-reward profiles, sitting between passive lenders and sources of yield.
Firms like Gauntlet, previously service providers to protocols like Aave or Compound, now directly manage nearly $750 million in TVL across several protocols. With performance fees ranging from 0-15%, this potentially represents millions in annual revenue with significantly more upside than traditional service arrangements. Per a Morpho dashboard, curators have cumulatively generated nearly 3 million in revenue and based on Q1 revenue are on track to do 7.8mm in 2025.
The most successful curator strategies have maintained higher yields primarily by accepting higher-yielding collaterals at more aggressive LTV ratios, particularly leveraging Pendle LP tokens. This approach requires sophisticated risk management but delivers superior returns in the current compressed environment.
As concrete examples, yields on the largest USDC vaults on both Morpho and Euler have outperformed the vaults.fyi benchmark, showing 5-8% base yields and 6-12% yields inclusive of token rewards.
Protocol Stratification: A Layered Market
The compressed environment has created a distinct market structure:
1. Blue-chip Infrastructure (Aave, Compound, Sky)
Function similar to traditional money market funds
Offer modest yields (2.4-6.5%) with maximum security and liquidity
Have captured the lion’s share of TVL growth
2. Infrastructure Optimizers & Strategy Providers
Base Layer Optimizers: Platforms like Morpho and Euler provide modular infrastructure enabling greater capital efficiency
Strategy Providers: Specialized firms like MEV Capital, Smokehouse, and Gauntlet build on these platforms to deliver higher yields upwards of 12% on USDC and USDT (as of late March)
This two-tier relationship creates a more dynamic market where strategy providers can rapidly iterate on yield opportunities without building core infrastructure. The yields ultimately available to users depend on both the efficiency of the base protocol and the sophistication of strategies deployed on top.
This restructured market means users now navigate a more complex landscape where the relationship between protocols and strategies determines yield potential. While blue-chip protocols offer simplicity and safety, the combination of optimizing protocols and specialized strategies provides yields comparable to what previously existed on platforms like Aave or Compound during higher rate environments.
Chain by Chain: Where Yields Live Now
Despite the proliferation of L2s and alternative L1s, Ethereum mainnet continues to host many of the top yield opportunities, both inclusive and exclusive of token incentives. This persistence of Ethereum’s yield advantage is notable in a market where incentive programs have often shifted yield-seeking capital to newer chains.
Among mature chains (Ethereum, Arbitrum, Base, Polygon, Optimism), yields remain depressed across the board. Outside of mainnet, most of the attractive yield opportunities are concentrated on Base, suggesting its emerging role as a secondary yield hub.
Newer chains with substantial incentive programs (like Berachain and Sonic) show elevated yields, but the sustainability of these rates remains questionable as incentives eventually taper.
The DeFi Mullet: FinTech in the Front, DeFi in the Back
A significant development this quarter was Coinbase’s introduction of Bitcoin-collateralized loans powered by Morpho on its Base network. This integration represents the emerging «DeFi Mullet» thesis — fintech interfaces in the front, DeFi infrastructure in the back.
As Coinbase’s head of Consumer Products Max Branzburg has noted: «This is a moment where we’re planting a flag that Coinbase is coming on-chain, and we’re bringing millions of users with their billions of dollars.» The integration brings Morpho’s lending capabilities directly into Coinbase’s user interface, allowing users to borrow up to $100,000 in USDC against their bitcoin holdings.
This approach embodies the view that billions will eventually use Ethereum and DeFi protocols without knowing it — just as they use TCP/IP today without awareness. Traditional FinTech companies will increasingly adopt this strategy, keeping familiar interfaces while leveraging DeFi’s infrastructure.
The Coinbase implementation is particularly notable for its full-circle integration within the Coinbase ecosystem: users post BTC collateral to mint cbBTC (Coinbase’s wrapped Bitcoin on Base) and borrow USDC (Coinbase’s stablecoin) on Morpho (a Coinbase-funded lending platform) atop Base (Coinbase’s Layer 2 network).
Looking Forward: Catalysts for the Lending Market
Several factors could reshape the lending landscape through 2025:
Democratized curation: As curator models mature, could AI agents in crypto eventually enable everyone to become their own curator? While still early, advances in on-chain automation suggest a future where customized risk-yield optimization becomes more accessible to retail users.
RWA integration: The continued evolution of real-world asset integration could introduce new yield sources less correlated with crypto market cycles.
Institutional adoption: The scaling institutional comfort with DeFi infrastructure suggests growing capital flows that could alter lending dynamics.
Specialized lending niches: The emergence of highly specialized lending markets targeting specific user needs beyond simple yield generation.
The protocols best positioned to thrive will be those that can operate efficiently across the risk spectrum, serving both conservative institutional capital and more aggressive yield-seekers, through increasingly sophisticated risk management and capital optimization strategies.
Uncategorized
OpenLedger Commits $25M to Fund AI Blockchain Startups

Blockchain protocol OpenLedger said it will commit $25 million to fund AI and Web3 developers.
The capital will be available on OpenCircle, a new launchpad set up by the California-based project to assist developers with creating AI-focused protocols.
The funding comes at a time of increased intersection between the blockchain and AI industries. Telegram last month announced a deal with Elon Musk’s xAI to incorporate the Grok AI chatbot on the messaging app, with the app also accepting the TON token for crypto payments.
“AI is currently an extractive economy, profiting from invisible labor and centralized training pipelines,” said Ram, a core contributor at OpenLedger. “OpenCircle turns that model inside out. We’re building a system where anyone who contributes, whether through code, data, or compute, owns a piece of the value they help create.”
OpenLedger raised $8 million in a seed round in 2024 as it looked to become the «sovereign data blockchain for AI technology.» The company also signed a deal with restaking protocol Ether.fi to enhance AI model development and security, Ether.fi has $6.5 billion in total value locked (TVL).
Uncategorized
Crypto Daybook Americas: Bitcoin Options Point to Gains as Bullish Flow Builds Ahead of CPI Data

By Francisco Rodrigues (All times ET unless indicated otherwise)
Bitcoin BTC rose over the weekend, offering a reprieve after a week of market jitters. It is now trading around $106,600 after gaining 1.2% in the past 24 hours, while the broader CoinDesk 20 (CD20) index added nearly 1.7%.
The recovery appeared driven less by headlines and more their absence, marking a shift from the public feud between U.S. President Donald Trump and Tesla CEO Elon Musk that rattled investors. As tensions cooled, markets recovered.
Even developments that might be seen as negative did not appear to sway markets. These include Taiwan-based crypto exchange BitoPro confirming being hacked, and data from Blockchain.com showing a slowdown in BTC’s network activity to the lowest level in a year.
Meanwhile, the Hang Seng index jumped 1.6% as traders reacted to U.S. President Donald Trump expressing optimism for talks with China in London that start today, saying the meeting “should go very well.”
Still, concerns are mounting over deflation in China. Consumer prices fell 0.1% year-over-year in May and factory gate prices dropped 3.3%, the steepest decline since October 2022.
The People’s Bank of China has already responded by trimming interest rates, reducing reserve requirements, and injecting liquidity into the market. That may eventually benefit cryptocurrencies, which often trade in tandem with liquidity conditions in traditional markets.
All that may recede in importance on Wednesday, when the U.S. announces the latest inflation figures. May’s consumer price index report is expected to show a rise in core inflation to 2.9%, up from 2.8% in April.
A stronger-than-expected reading could delay the Federal Reserve’s next rate cut and inject volatility across financial markets.
In a note published Monday, Spanish bank Bankinter warned that rising inflation and U.S. bond yields could pressure equity valuations and weaken the «fear of missing out» momentum that’s been propping up global stocks and other risk assets.
The yield on the 10-year Treasury has already climbed to 4.5%, a level that could begin to weigh on market sentiment if inflation surprises to the upside. Crypto markets, for now, are caught in the crossfire. Stay alert!
What to Watch
- Crypto
- June 9, 1-5 p.m.: U.S. SEC Crypto Task Force roundtable on «DeFi and the American Spirit»
- June 10, 10 a.m.: U.S. House Final Services Committee hearing for Markup of Various Measures, including the crypto market structure bill, i.e. the Digital Asset Market Clarity (CLARITY) Act.
- June 11, 7 a.m.: Stratis (STRAX) activates mainnet hard fork at block 2,587,200 to enable the Masternode Staking protocol.
- June 16: 21Shares executes a 3-for-1 share split for ARK 21Shares Bitcoin ETF (ARKB); ticker and NAV remain unchanged.
- June 16: Brazil’s B3 exchange launches USD-settled ether (0.25 ETH) and solana (5 SOL) futures contracts, approved by Brazil’s securities regulator, the Comissão de Valores Mobiliários (CVM) and benchmarked to Nasdaq indices.
- Macro
- June 9, 8 a.m.: Mexico’s National Institute of Statistics and Geography (INEGI) releases May consumer price inflation data.
- Core Inflation Rate MoM Prev. 0.49%
- Core Inflation Rate YoY Prev. 3.93%
- Inflation Rate MoM Prev. 0.33%
- Inflation Rate YoY Prev. 3.93%
- June 10, 2 a.m.: The U.K.’s Office for National Statistics releases April employment data.
- Unemployment Rate Est. 4.6% vs. Prev. 4.5%
- Employment Change Prev. 112K
- June 10, 8 a.m.: The Brazilian Institute of Geography and Statistics (IBGE) releases May consumer price inflation data.
- Inflation Rate MoM Prev. 0.43%
- Inflation Rate YoY Prev. 5.53%
- June 11, 8:30 a.m.: The U.S. Bureau of Labor Statistics (BLS) releases May consumer price inflation data.
- Core Inflation Rate MoM Est. 0.3% vs. Prev. 0.2%
- Core Inflation Rate YoY Est. 2.9% vs. Prev. 2.8%
- Inflation Rate MoM Est. 0.2% vs. Prev. 0.2%
- Inflation Rate YoY Est. 2.5% vs. Prev. 2.3%
- June 9, 8 a.m.: Mexico’s National Institute of Statistics and Geography (INEGI) releases May consumer price inflation data.
- Earnings (Estimates based on FactSet data)
- None in the near future.
Token Events
- Governance votes & calls
- ApeCoin DAO is weighing scrapping the decentralized autonomous organization and launching ApeCo to “supercharge the APE ecosystem.”
- Optimism DAO is voting to approve eligibility criteria for the Milestones and Metrics (M&M) Council in Seasons 8 and 9, introducing a model where members are selected “based on competencies rather than elections.” Voting ends June 11.
- June 10, 10 a.m.: Ether.fi to host an analyst call followed by a Q&A session.
- June 11, 7 a.m.: Cronos Labs lead Mirko Zhao to participate in a community Ask Me Anything (AMA) session.
- Unlocks
- June 12: Aptos (APT) to unlock 1.79% of its circulating supply worth $53.61 million.
- June 13: Immutable (IMX) to unlock 1.33% of its circulating supply worth $12.82 million.
- June 15: Starknet (STRK) to unlock 3.79% of its circulating supply worth $16.90 million.
- June 15: Sei (SEI) to unlock 1.04% of its circulating supply worth $10.59 million.
- June 16: Arbitrum (ARB) to unlock 1.91% of its circulating supply worth $32.21 million.
- June 17: ZKsync (ZK) to unlock 20.91% of its circulating supply worth $41.25 million.
- June 17: ApeCoin (APE) to unlock 1.95% of its circulating supply worth $10.88 million.
- Token Launches
- June 9: Skate (SKATE) to be listed on Binance, Bybit, MEXC,KuCoin, Bitget and others.
- June 16: Advised deadline to unstake stMATIC as part of Lido on Polygon’s sunsetting process ends
- June 26: Coinbase to delist Helium Mobile (MOBILE), Render (RNDR), Ribbon Finance (RBN) and Synapse (SYN).
Conferences
The CoinDesk Policy & Regulation conference (formerly known as State of Crypto) is a one-day boutique event held in Washington on Sept. 10 that allows general counsels, compliance officers and regulatory executives to meet with public officials responsible for crypto legislation and regulatory oversight.
- June 14: Incrypted Crypto Conference 2025 (Kyiv)
- June 18-19: Canadian Blockchain Consortium’s 2nd Annual Policy Summit (Ottawa)
- June 19-21: BTC Prague 2025
- June 25-26: Bitcoin Policy Institute’s Bitcoin Policy Summit 2025 (Washington)
- June 26: The Injective Summit (New York)
- June 26-27: Istanbul Blockchain Week
- June 30 to July 3: Ethereum Community Conference (Cannes, France)
Token Talk
By Francisco Rodrigues
- Skate, a blockchain infrastructure layer focused on unifying liquidity across decentralized networks, is introducing its SKATE token today.
- The Token Generation Event (TGE) marks the public debut of the token, with listings on Binance Alpha, Bybit and MEXC.
- Formerly known as Range Protocol, Skate is building a framework that allows decentralized applications (dapps) to run across multiple virtual machines like Ethereum, Solana and TON without needing separate deployments.
- The token lies at the heart of the system, supporting governance, staking and liquidity provision through the network’s automated market maker (AMM).
- Out of a fixed 1 billion token supply, 10% is being distributed via airdrops to early users, ecosystem contributors and NFT campaign participants. Claiming and staking the tokens immediately may boost rewards by 30%.
- MEXC’s pre-market trading started on June 4, with prices initially jumping 33% to $0.20 before dropping back down to $0.12 at the time of writing.
Derivatives Positioning
- BTC options open interest on Deribit is $32.9B, with calls significantly outweighing puts at 200,000 contracts versus 110,000.
- The put/call volume ratio stands at 0.54, indicating continued demand for upside exposure. The $140K strike leads all others with 16,100 calls open, representing $1.79B in notional value.
- The 27 June expiry is the main focal point, accounting for $13.1B in notional open interest or 41% of the total. Daily notional flow is highest at this expiry with $206M traded, followed by $194M at the 13 June expiry.
- Monday flow data from Deribit shows 31% of contracts were calls bought and 17% were puts bought. The rest of the activity came from call and put selling, suggesting traders are combining bullish positioning with yield strategies at higher strikes.
- Coinglass liquidation heatmaps show high concentrations of long leverage near $104K and $107K. A total of $39M in liquidation leverage is stacked around $104.7K, making it a key downside level to watch for potential forced selling.
- Funding rates from Velo are steady, with BTC annualized funding holding near 6.2%. This reflects a moderately bullish stance, with no signs of excessive leverage in perpetual markets.
Market Movements
- BTC is up 2% from 4 p.m. ET Friday at $106,743.74 (24hrs: +1.19%)
- ETH is up 0.5% at $2,514.74 (24hrs: +0.29%)
- CoinDesk 20 is up 2.18% at 3,088.96 (24hrs: +1.36%)
- Ether CESR Composite Staking Rate is down 18 bps at 2.94%
- BTC funding rate is at 0.006% (6.5667% annualized) on Binance
- DXY is down 0.31% at 98.89
- Gold futures are down 0.16% at $3,341.10
- Silver futures are up 0.87% at $36.46
- Nikkei 225 closed up 0.92% at 38,088.57
- Hang Seng closed up 1.63% at 24,181.43
- FTSE is down 0.11% at 8,827.95
- Euro Stoxx 50 is up 0.16% at 5,418.96
- DJIA closed on Friday up 1.05% at 42,762.87
- S&P 500 closed up 1.03% at 6,000.36
- Nasdaq Composite closed up 1.20% at 19,529.95
- S&P/TSX Composite closed up 0.33% at 26,429.13
- S&P 40 Latin America closed +0.36% at 2,584.58
- U.S. 10-Year Treasury rate is down 2 bps at 4.49%
- E-mini S&P 500 futures are unchanged at 6,011.50
- E-mini Nasdaq-100 futures are unchanged at 21,784.00
- E-mini Dow Jones Industrial Average Index are unchanged at 42,840.00
Bitcoin Stats
- BTC Dominance: 64.7 (+0.19%)
- Ethereum to bitcoin ratio: 0.02355 (-0.80%)
- Hashrate (seven-day moving average): 872 EH/s
- Hashprice (spot): $52.77
- Total Fees: 3.17 BTC / $335,041
- CME Futures Open Interest: 148,080
- BTC priced in gold: 31.8 oz
- BTC vs gold market cap: 9.01%
Technical Analysis
- Bitcoin has reclaimed the 20-day exponential moving average (EMA) on the daily timeframe after retesting the 50-day EMA for the first time since its breakout from $85,000. Price action has broken out of the downward trendline, signaling a potential shift in momentum.
- However, it remains within a key daily order block, which may act as resistance.
- For a bullish continuation, it’s crucial for the BTC price to hold above these reclaimed EMAs and secure a weekly close above $109,400, which would invalidate the current weekly swing failure pattern and confirm the cryptocurrency’s strength.
Crypto Equities
- Strategy (MSTR): closed on Friday at $374.47 (+1.54%), +1.87% at $381.49 in pre-market
- Coinbase Global (COIN): closed at $251.27 (+2.9%), +1.52% at $255.10
- Circle (CRCL): closed at $107.7 (+29.4%), +10.21% at $118.50
- Galaxy Digital Holdings (GLXY): closed at C$27.4 (+4.9%)
- MARA Holdings (MARA): closed at $15.78 (+6.05%), +2.47% at $16.17
- Riot Platforms (RIOT): closed at $9.85 (+9.57%), +2.94% at $10.14
- Core Scientific (CORZ): closed at $12.19 (+2.18%), +0.9% at $12.30
- CleanSpark (CLSK): closed at $9.79 (+8.54%), +2.66% at 10.05
- CoinShares Valkyrie Bitcoin Miners ETF (WGMI): closed at $19.57 (+7.53%)
- Semler Scientific (SMLR): closed at $32.98 (+1.04%), +1.49% at $33.47
- Exodus Movement (EXOD): closed at $28.86 (+10.45%), unchanged in pre-market
ETF Flows
Spot BTC ETFs
- Daily net flows: -$47.8 million
- Cumulative net flows: $44.22 billion
- Total BTC holdings ~1.2 million
Spot ETH ETFs
- Daily net flows: $25.3 million
- Cumulative net flows: $3.35 billion
- Total ETH holdings ~3.77 million
Source: Farside Investors
Overnight Flows
Chart of the Day
- The chart shows spot ether ETFs in the U.S. have now recorded 15 consecutive days of positive net flows.
- These flows follow Ethereum’s Pectra upgrade and as the ETH/BTC ratio recovers from a more than five-year low below 0.02.
While You Were Sleeping
- China’s Exports to the U.S. Clock Their Sharpest Drop in More Than 5 Years — Down Over 34% in May (CNBC): Economist Tianchen Xu expects a June rebound after U.S. tariffs hurt exports in April and May. A second round of trade talks is set to begin Monday in London.
- Bitcoin Struggles as Hang Seng Cheers U.S.-China Trade Talks; U.S. Inflation Eyed (CoinDesk): The Hang Seng index rose past 24,000 on renewed trade optimism, while investors worldwide await U.S. inflation data expected to show tariff-driven increases in prices of core goods.
- Argentine President Milei Cleared of Misconduct Over LIBRA Promotion: Report (CoinDesk): Argentina’s anti-corruption office cleared Javier Milei over his LIBRA memecoin post, saying he acted in a personal capacity as an economist, not as a government official.
- The Blockchain Group Starts 300M-Euro ATM Share Sale to Expand Bitcoin Holdings (CoinDesk): The program allows French asset manager TOBAM to buy shares at its discretion, potentially increasing its shareholding to as much as 39%. It currently holds 3%.
- Sam Altman’s Eye-Scanning Identity Tech Expands to U.K. (Bloomberg): Tools for Humanity begins its U.K. scanner rollout in London this week, with self-serve installations planned across five other cities, said legal chief Damien Kieran.
- California Governor Calls Trump National Guard Deployment in L.A. Unlawful (Reuters): Governor Gavin Newsom said he would sue to block Trump’s troop order in Los Angeles, blaming the president for inciting protests tied to immigration enforcement.
- Brazil Plans Panda Bond as Lula Looks to Bolster Ties With China (Financial Times): Deputy Finance Minister Dario Durigan said Brazil aims to issue renminbi-denominated debt in China this year alongside new sustainable bonds in dollars and euros to deepen global financial ties.
In the Ether
Uncategorized
Solana Holds Above $152 as Second Round of US-China Talks Raise Hopes for Market Calm

Solana’s SOL SOL posted a solid recovery over the past 24 hours, rising as much as 4.83% before retreating to trade around $152.16. While volatility remains elevated, the cryptocurrency has formed a pattern of higher lows, suggesting underlying strength amid a fragile macro backdrop.
The broader market remains focused on renewed trade talks between the United States and China, which kicked off Monday in London. The meetings bring together top officials, including U.S. Commerce Secretary Howard Lutnick and Chinese Vice Premier He Lifeng, to address longstanding tensions over tariffs and tech restrictions.
While the two sides struck a temporary truce last month, both have since accused each other of backsliding. Analysts say the rare earth export curbs and AI chip controls remain key sticking points that could influence global market sentiment—including for risk assets like cryptocurrencies.
Amid this uncertainty, Solana’s network continues to show expansion potential, with some institutions projecting price targets as high as $420–$620 in 2026. In the near term, traders will likely watch how macro developments affect appetite for risk-on trades in assets like SOL.
Technical Analysis Highlights
- SOL rose from $148.08 to $155.24 (4.83% range) before retracing
- Price formed a clean uptrend channel from 09:00–21:00 on June 8
- High-volume support established at $152.03, resistance at $154.79
- Price stabilized near $150.91 after the correction
- Uptrend channel resumed early June 9, with strong volume at 07:59 (54,590 units) and 08:02 (23,396 units)
- Resistance was breached at $150.85, followed by sideways consolidation
- Price recovered from $150.53 to $150.98 in the last hourly candle, signaling renewed strength
Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk’s full AI Policy.
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