The yield debate also fails to mention there isn’t yet efficient price (yield) discovery between tradfi and defi.
It’s still a:
- infra issue: nascent rwa protocols
- actor issue: sanctioned capital cant access Western markets
- regs issue: not investable by institutions
@dunleavy89 Great analysis Tom. After the EL, which was really thoughtful, where did all the other premia suddenly come from? We went from the risk of loss based on current rates demands 1.5% to an additional 4.5% from oracle, admin, etc. which i thought were already captured.
Agents are accumulating capital and doing nothing with it.
We're building Robot Money alongside @LexSokolin and Generative Ventures to fix that.
Autonomous treasury management for the machine economy.
Thrilled to be building this!
https://t.co/WOoKbJm2bb
@LexSokolin@bpmilne Etherfi, Avalanche, and Kolo use Rain but are counted separately in the chart. The Rain data includes the remaining other programs.
Reminder that DeFi TVL is skewed towards higher risk profiles
Blue-chip DeFi yields 5% p.a. on stablecoins and compares it to TradFi money market funds of 3-4%.
But Balancer hack is a reminder that smart contract risk is very real even on the most seemingly robust dapps.