Market intelligence firm IntoTheBlock says that US treasuries, stablecoins yields and real-world assets are giving decentralized finance (DeFi) a shot in the arm.
In a new article, IntoTheBlock head of research Lucas Outumuro says that MakerDAO’s (MKR) new 8% yield on stablecoin Dai (DAI), which has gathered $1 billion in deposits in less than a week, has rekindled interest in DeFi.
“The first lending protocol, MakerDAO, has caught the attention of the crypto space with its recent move. Its stablecoin, DAI, is able to earn the DAI savings rate (DSR), which as of this past Sunday was increased to 8%.
This yield is funded by Maker’s revenues, most [of] which stem from supplying part of its collateral into US treasuries. This shift is already causing an impact on Maker and is likely to extend beyond the protocol.”
IntoTheBlock adds that exposure to real-world assets is giving the DeFi space a fresh narrative amid a choppy trading environment.
“Real-world assets such as treasuries are bringing renewed interest into DeFi. The amount of DAI earning the DAI Savings rate climbed by nearly $1 billion this week DAI supply has increased almost as much ($800 million), and is currently at a three-month high.
The DSR’s increment solidifies the trend of real-world assets in DeFi, where other protocols like Ondo Finance have already made strides with $164 million in deposits in their tokenized treasuries.”
The crypto analytics platform also says that Maker’s governance token MKR has seen an increase of 35% over the last month, which the firm says was ignited by the recent accumulation of large holders.
“While the recent price move in MKR may be overheated, the implications of having the DSR at competitive rates are likely just beginning. Even if the DSR drops to 5% to match treasuries, it opens the opportunity for other lending protocols and DEXs to use a sustainable yield-generating stablecoin as a building block.
It also makes it easier for people who would have not otherwise bought treasuries to simply access their yields. Overall, the DAI savings rate is likely to play an increasingly important role in DeFi and crypto altogether as it helps attract back capital and bring in new users.”
MKR is trading for $1,248 at time of writing, a 1.66% increase during the last 24 hours.Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
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