Defi Yield Plunges – Trustnodes

There was a time when you could lend your USDc at 10%, and people would actually borrow it at the very peak on October 31st 2021.

Now however on the same platform, Compound, you can barely get 0.5% for your USDc or DAI, while USDt still attracts about 2%.

That’s according to data from LoanScan as pictured above, showing that for much of the bull since late 2020, rates of 5% or more for USDc were common.

Yet during less bullish periods, prior to October 2020 or during the May crash of 2021, rates of 0.5% were more common.

This indicates there’s a correlation between defi yield and eth/btc’s price, with the low yield seen now being common outside of bull.

Rather than some systematic issue due to the collapse of Luna’s UST, therefore, it appears more the case that there’s just less demand for borrowing, and leverage, as prices have been falling rather than rising for some time.

That’s shown by eth’s network fees falling to 7 gwei currently, 20 cent for a simple transfer and $1 for complicated Uniswap transactions.

Eth transactions seem to be holding stable-ish, however, at 1.2 million a day from a very brief peak of 1.7 million.

Yet, due to the limited capacity, transaction numbers can be misleading because they don’t contain the huge queue waiting to get in. That queue is shown by the gas price, and that’s at its lowest since January 2020.