Market research firm IntoTheBlock says U.S. Treasury bonds, stablecoin yields and real-world assets give decentralized finance (DeFi) a chance.
In a new article, says Lucas Outumuro, research lead at IntoTheBlock say that MakerDAO’s (MKR) new 8% yield on stablecoin Dai (DAI), which has accumulated $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, can earn the DAI savings rate (DSR), which was raised to 8% last Sunday.
This proceeds are largely financed by Maker’s revenues [of] arising from delivering some of the collateral to U.S. Treasuries. This shift is already impacting Maker and will likely extend beyond protocol.”
IntoTheBlock adds that exposure to real-world assets gives the DeFi space a new narrative amid a choppy trading environment.
“Real assets such as government bonds are driving renewed interest in DeFi. The amount of DAI earning the DAI savings rate has increased by nearly $1 billion this week. DAI supply is up nearly the same amount ($800 million) and is currently at its three-month high.
The increase in DSR 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 is up 35% over the past month, which the company says has been fueled by the recent accumulation of major holders.
“While the recent price move in MKR may have overheated, the implications of having the DSR at competitive rates are probably just beginning. Even if the DSR drops to 5% to match treasuries, it opens up the possibility for other lending protocols and DEXs to use a sustainable, revenue-generating stablecoin as a building block.
It also makes it easier for people who otherwise wouldn’t have bought government bonds to easily access their returns. Overall, the DAI savings rate is likely to play an increasingly important role in DeFi and crypto as it helps to withdraw capital and attract new users.”
MKR is trading at $1,248 at the time of writing, up 1.66% over the last 24 hours.
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