Is the Yield Real? Verifying Sources of Yield in DeFi

Hi everyone. Oh, hi a lot of friends. Uh, welcome to Stable Summit. I'm Anna Stone. I'm super pumped for a great panel with wonderful guests.

By way of introduction, I'm here from Cork Protocol. Cork is a new solution for tokenizing different onchain risks. Whether that be liquidity risks, slashing risks, DPEG risks. We're creating composable infrastructure to apply tokenized risk to a range of different use cases. And so, of course, we're thinking about yield products and yield approaches, which brings me to today's panel, which is, is DeFi yield real?

Almost an existential question. Um, I was in preparation for the panel walking around can this morning and started to think about when did I first become familiar with even the concept of DeFi yield and I hearkened back to around five summers ago. The year was 2020 and it was DeFi summer. And like many of you guys in this room, probably you saw that every single week and that it seemed like every single hour there was some new DeFi project that was coming out with a super high yield product. Whereas in the traditional financial industry, we were looking at yield products that were yielding around 1 to 5%.

In DeFi, we were presented with new products that were thousands of percent. And funnily enough, many of them were farm themed. Um, you know what they say, like if something seems too good to be true, then it probably is. And that's exactly what happened uh from many of those early projects and products. Um we saw by 2022 basically all new money drained out of the space.

Um many of those early yield projects were funded by essentially token inflation, right? Printing money and bringing me to one of my favorite crypto terms, Ponziomics, right? Where the high yield product was actually the basis of new money flowing into the protocol. And the second that new money stopped to flow in, token prices collapsed, yields collapsed, and many of the early investors were left holding the bag. I think this creates a lot of the suspicion and the loss of confidence around DeFi yield, bringing us to today's conversation.

Right? So now in 2025, I think we're in a little bit of a different situation. uh many new protocols, new and old, I guess, are experimenting with the concept of real yield, right? That's tied to underlying productive assets. And so that's what we're here to talk about today.

Um and so I will let each one of my esteemed guests introduce themselves, their projects, and who their customers are. Let's start with you, Michael. Hi everyone. Yeah, thanks very much for h having us. Um so yeah, I'm Michael.

Uh I'm the CEO and co-founder of Oiler Labs. Uh we built Oiler which is a lending and borrowing platform uh on nine nine different networks at the moment and more more to come very soon. Uh yeah, fundamentally we let people deposit v a variety of different assets uh crypto assets mainly I would say as collateral and take out loans of uh of other types of assets which tend to be stable coins. I would say the increasingly we are seeing adoption of um real world assets on the protocol. So collateralization of tokenized uh funds or tokenized stocks even uh and using those to take out take out loans and yeah fundamentally I suppose who are users they are a we have a few different classes of users I would say there are fundamentally lenders who want to earn yield uh they come in different flavors some of them are fairly passive just individuals depositing other ones are uh aggregators we got superform here um yeah and then on the borrowing side we have people that are typically looking to uh to take on on risk and speculate on the market or hedge out hedge out risk.

Uh on the other side they tend to be more professional types I would say. Um yeah and uh very very recently we also announced this new product on top of oiler called oiler swap which allows an interesting way for uh swapping and lending and borrowing all to become integrated within the same protocol. Uh hello, my name is Mikail. I am co-founder and CTO of Gearbox Protocol. And uh Gearbox is quite unique because we use a little bit different lensing paradigm.

So instead of capturing one coin as collateral, we use hooks to really keep all assets liquid on your account. Literally, you have one asset on your account, you borrow others and they are available. Instead of locking everything, we subscribe on hook and each time you make transaction with this account, we check that you have enough money to pay the debt back. So it works like decentralized prime brokerage and create a lot of uh great opportunities to farm on both assets. So nothing is locked.

You can really open and do whatever you want like with normal assets, but it's 10 times more on your account. And regards to users, I think it's a very good question. Uh, historically we have a lot of Dentons who use gearbox and it was a very fun regards into the question when it was a points mania people really come for both sides and it was a very fun game because no one could predict how much points will cost. And then it was a game which where gearbox work as a system which finds the true value because people from the LP side believe hey we really win the game and points will cost lower. It's much better to be on LP side.

People who borrow them believe wow we will be multi-millionaires because of course it worth millions after uh that. So it was really good times and still a lot we have a lot of small customers. It's like a native adoption and now we launch permissionless when curators who want to build on top of gearbox stake could really do this in very easier way use a lot of stuff but I can talk a little bit later about that ve hey guys my name is Vicram I'm one of the co-founders of superform uh we're a permissionless yield marketplace um so anybody can list their yield products on superform and then access it from any chain um have over 70 protocols have done that. Some of them actually all them on uh on this stage and you know some ones before that even uh in the food farming era. Um but yeah it's been fun to see the entire progression of yield go from that era built on top of you know stuff like unis swap v2 to uh the points farming meta and then now you have uh you know real stable uh lending lending borrowing protocols that are generating this yield in entirely different ways.

Um but yeah uh excited to to be on this panel with customers customers you have interesting customers uh all all retail um so that's been another really fun part of it uh because what retail users are looking for in yield is substantially different from what a institution might be and uh points were a big part of of that so hey I'm Sam uh spark uh we're working on spark which is the largest uh onchain capital allocator uh working to deploy uh the Sky formerly Maker Dow balance sheet into the best uh yield strategies at scale. Um so we deploy uh capital into 3.7 billion currently into a mix between DeFi, CFI and TRDFI always rebalancing between what what the best uh yield sources are at the time. Um so yeah I mean who are customers? There's two sides.

There's spark savings which is um you know even like retail can be involved in this but we also get like treasuries anybody who wants to earn uh good atscale yield. We uh spark savings is uh one of the most liquid uh high yield products in the space with about 2 billion in uh like active liquidity for redemptions at all times and uh striving to maintain at least a 25% uh cash reserve. Um and then so on the uh lending side increasingly so uh it was more like DeFi natives uh but increasingly we see demand for institutional borrowers especially against Bitcoin. Um historically makers been more like Ethereum like uh onchain lending but um you know for many different reasons uh maybe institutions don't want to wrap their Bitcoin on Ethereum. So increasingly we've been deploying capital into products like Maple um and as well as this uh Coinbase uh Bitcoin borrow product that they've put out.

So Spark is about 82% of the capital provided into that market. Um and then yeah uh continuing to expand on that uh yeah institutional Bitcoin borrowing is really where the um growing segment is. Thank you. Um, so I'd actually like to start out by defining yield because in traditional finance this is traditionally linked to, you know, what we consider as true economic activity, savings, loans, interest, fees, etc. But, uh, in DeFi that can be a bit different.

And so I'm wondering actually starting with you Mika, I'd love to hear from you first. Okay. What is yield? How would you define yield? And where does the money come from?

Uh it's very interesting questions and for them I believe it's a very very complicated to say about the whole yield in our ecosystem it grows faster than I can even read the Twitter all projects going but in majority cases just a small history of the yield of course people who believe that the industry will grow faster than inflation really decided to keep their crypto and borrow some stables. It's how the first lensing comes to scene and the problem was solved. I am not interested in 2020 or 2022 sell my ease. I have a strict expectation that tomorrow it will uh cost much more. So I was pretty cool to borrow this uh stables just to cover rent payments, grocery etc.

And all time when the industry is growing all time we can see a new shift in ideas because only ideas and developers in my perception builds the new future of web free usage and it's create some attention from people who start using products build things etc. We have a kind of fa uh some expectation hey tomorrow is will be will cost greater. So people go and borrow these tables and it create a really good yield. What happens with points what I already mentioned the same things people really expected it's a very new and novel idea good concept well executed and of course there's yield was on a high level when there is a kind of lack of ideas in the market we can see that the yield going to the same level like in a traditional finance because literally we can have but there is no big uh difference you put money into this direct directly from your pocket using web two or using a blockchain. So, it's literally the same.

So, I'm curious to hear from Thank you. I'm curious to hear from others on the panel. Um, would you qualify points as a real yield source today? And if so, how do you think about that? I'll start with you, Sam.

I mean, yeah, definitely. Um, this is actually what most of the yield it's definitely temporary. I'm not saying it's a sustainable yield source unless there's like some cash flows on the other side supporting uh the token. Um but yeah, this is like primarily what a lot of the uh yield farming that's going on right now. But that's I I sort of look at that as like an ephemeral uh yield source that's kind of sitting on top of the base sustainable yield which uh the primary drivers for uh yield.

There's there's really like three atscale yield sources. There's um you know the base yield T bills which is RWAS. Um there is uh overcolateralized crypto lending. Um that's a that's another big one. Um and these are users who are primarily paying for leverage, but they can take out loans for other reasons.

And I would actually like to see more use cases where people are using loans for, you know, daily expenses, this kind of stuff. And we've se I'm actually seeing more and more growth in that sector. But historically, yeah, it's been and it still is today. People are using it for leverage. And then similarly uh perpetual futures on centralized exchanges the funding rate that's the other big source of scalable yield.

Um but again it's it's all for leverage. So that can't last forever. Eventually we need to kind of have the industry mature and get yield sources where yeah again what I was saying like people are using it for expenses or you know more everyday kind of stuff. You know maybe they uh they you know finance a house or something like that. These are kind of more long-term sustainable yield sources.

So, we're still at the very early stages and yield is primarily driven by uh speculative demand on on Bitcoin and ETH and other crypto assets. What do you think, Michael? Well, uh yeah, you could go quite deep on this question, I think. I mean, fundamentally, like the easy answer is where does yield come from is it comes from borrowers? Uh that's the straight up answer, but like why do people borrow?

Well, I agree with Mikail. They're usually borrowing because they're taking a bet on the future. Uh and that can be any kind of bet. It can be a bet on the future price of ETH or can be a future bet on the growth of a company or it can be a a bet on the future growth of an whole economy and country. Right?

So that's fundamentally where yield comes from is people paying a fee so that they can access more capital upfront now so that they can grow. Um, and so yeah, in terms of points, I think they're a bit silly and I don't really like them, but mainly, but they are real yield because they're effectively projects issuing a kind of like really messy type of debt, I think, that they're they're sort of putting out in order to help drive growth. And uh, yeah, it's it's a cryptonative version of um of borrowing, I suppose, but it's kind of messy, but it's uh it's certainly real in some sense. uh it's just very hard with points and some sources of yield in DeFi I think to actually value these things when normally when a a company issues debt or a government issues debt you can you can pretty easily sort of value it or you know there's lots of people out there able to look at the do analysis and try to come up with some kind of cost and I think that's very hard to do with points so it becomes way more of like a farming game than anything else Vic I'm curious to hear your thoughts on this question and specifically if in your experience like users have any distinguishing between what might be one of the more real yield sources versus some of these more illusurary sources? The retail behavior consumer in DeFi is uh is quite hard to pin down.

Um we actually found if anything that uh protocols that offer points are more likely to get outsized amounts of TVL because people are speculating on something that doesn't exist yet. Um so it's just part of the whole uh you know mentality of uh um and Athena kind of started this right through their through their season one and that was a huge moment for a lot of people that were just farming points is that they actually ended up getting 150% APY on something but if they would had published that number then uh it would have been a lot harder um for them to have like a lower amount of TVL uh in that um I think points are in a way uh just a way for users to kind of benefit fit in some preede funding almost for for a protocol versus when you have a token like you're already kind of series A and it's just kind of moving up the risk curve for a lot of these um people that are already providing capital on chain u but yeah exactly what Sam said I mean right now it's so far all this demand has been for the rates are dependent on demand for crypto assets and uh I think we're going to have more and more of these rewards that are given out for participating in DeFi move from points to real yield as we get more real stuff that we can actually give out to people. Great. Thank you. Um curious to hear your thoughts around like the the the different risks, right?

So, how you're thinking about and and Sam, I'm actually curious to start with with you here. Um, how are you thinking about distinguishing like the risks between some of those more base layer uh yield rates versus like the more speculative bets on the future such as points programs? And are there any warning signs, you know, between the two? Is there anything you're monitoring for in terms of understanding those risks? Yeah, I mean as as like for speaking from the lending side uh like we're not taking any bets on anything really like we're just uh supplying capital that people can uh leverage uh their interests in taking directional bets on the um you know any particular points program or even just crypto itself.

So the way I view and I'll I'll go over like the three uh categories that I mentioned. So T bills is the risk-free rate. um you know there's some nuance in that the RWAs are have like custodians and stuff like that but more or less you consider like that to be like uh essentially risk-free um you know with some nuance there um what I would also consider like extremely low risk is onchain over collateralized crypto lending and this is what makers been doing from the beginning um there's actually been like no defaults with the highly liquid ones like Bitcoin and ETH and LSTs and stuff like this like it's just like proven to be a super robust and still accesses most of the yield that comes in bull markets. So actually I think this product is one of the most compelling things that we can export into trady. People who want um you know they're on fixed income pension funds this kind of stuff who want access to this like they want good returns on their capital and tradi is pretty much exhausted with that stuff.

So crypto is a very new and shiny thing that can still give you like these um you know even double-digit yields sometimes in bull market conditions while remaining with the in particular the overcolateralized uh crypto lending um can still remain I I think it's still a relatively safe uh thing to do and so that's most of the balance sheet of uh Sky right now and so and then the last thing is the the perpetual future funding rate on centralized exchanges this is this is definitely higher risk exchanges have hacks and stuff like that sometime but I think uh there's been big improvements in how this is managed. I think the most like um infamous case the recent buy bit hack um you know that affected like Athena but because of their segregated custody um they were actually only marginally affected. There's definitely it's not no risk but it's like far far better uh custodying the collateral off the exchange with a qualified custodian. And so these types of improvements drastically lower the risk with these types of things. But as with all lending um like it's it's about you know the structure of the loans.

So we have more advanced types of structures like with in particular with spark we aim for more senior positions a lot of the time. So spinning up like a you know a morpho market for example or you know can do this on oiler or whatever it doesn't really matter. Um but you can have these isolated markets where you have uh junior uh equity tunch uh sitting in front of you. These are loop leveragers and so you get sort of the nice uh you get you capture most of the yield as the lender but you still get this like nice buffer protection for events where there's like a shortfall of you know maybe 10 20% in the actual uh end asset. Um so these types of structures and it's really cool.

I mean this is why I love DeFi. You can plug all this together on chain and it's all very transparent and I I just am still always think that's the coolest thing ever. But yeah, I mean risk is just such a complex thing even in Tradfi. So we there's a there's with everything that uh we're investing into there's always a very rigorous analysis on on many different uh many different fronts for risk. So I actually want to you bring up data and the fact that it's all onchain and I actually want to throw that into the mix here is how are you guys thinking about uh using onchain data to really make transparent those different risk levels across the different yield categories as Sam put them and uh how that's factoring into your strategy.

Go for it. Um well again the question is how do you identify a potential big risk or a big Ponzi like risk right how are you how can we use different onchain data analytics to really understand the different types of risk and take it from there well uh I would say collateral risk is is the main thing and and and it's it's quite subtle because uh it it can it can hide uh you know there's a history in finance where you have something that's volatile and people speculate on that And then people want to essentially get the returns but without the volatility and the and the risk that comes with that. So then you you compress the volatility into a a kind of low lower yielding lower volatile product and then people build back more risk again where they start then leveraging that and start going you know leverage looping on those. That's kind of what you're seeing with Athena today. And the tricky thing there is that I think it's quite hard sometimes to to see the underlying risks and and actually work out how the how robust the entire system is.

if something goes wrong, you know, one one one one area, it can actually have dramatic effects on a completely seemingly different different pool of capital. So, it is really tricky. But, um, as Sam said, what's very nice about DeFi is that it's all transparent and it's on chain. So, it's still it's hard to do the modeling, but it's it's it's more possible than it ever was in Tradfire. You know, when we saw the collapse of the banks in 2008, piecing back together what went wrong was a real mess.

It took years. I don't think it's even really been done today. whereas people can kind of do this in real time in DeFi and uh yeah we see people now um you know bringing credit scores and other scoring metrics risk metrics onto the market like Credora uh other people like that trying to um trying to assess risk um yeah one of the the nice things about well one of the I'd say complex things about financial markets is people always you know there's this life always finds a way and I think it's in financial markets it's that people always find a way to sort of collateralize something and take more risk. Uh and uh yeah, so whenever you you just get this sort of massive expansion of collateral on collateral on collateral and leverage builds into the system. What what Oiler does is enable anything to be used as collateral, but it then allows it to plug into a kind of well- definfined network so that you can actually trace the collateral relationships among among uh among assets.

So hopefully that that should make it easier for the scan to uh to assess the risk, but uh it's not something that that we personally do. the people who build markets are other miscellators and and capital allocators. I don't know what's happening. Hello. Okay.

Thank you. Um Vic, I want you to take it. Yeah. If if there's something I feel like crypto has done really well over the last few years, it's uh standardization. And I think everyone on this panel is now is built on standard called ERC 4626, which is for tokenized vaults.

Um and if you were to look at how people would have done all this risk analysis three years ago, you would have had to create adapters for every individual protocol be tracking separate events uh individual like state state variables in contracts. You might still have to do that actually. But the fact is that now you can actually get all this stuff APY TVL basic metrics directly on chain and index through subgraphs very efficiently. Um so at a large scale it's easier than ever to actually do this kind of transparency analysis on chain. Uh but yeah there's this whole another level to it which is uh you know the actual logic within these contracts and how is that risk compounding.

Um but I think at this point that has to be done by individual curators or risk um people that are just specializing in that. It's going to be a whole new industry that evolves. Sam oh um what's the question? No. Oh, so I was I actually you actually already answered it.

Um you were you start with you Mika. Uh so I believe we are in a pretty interesting place. So literally before I think a lot of us read tweets from Vitalik and other crypto founders do not trust crypto put as much money is you are ready to lose. It was a stage of the market when people do not trust the crypto by like existing system. It was a very innovative very high risky and it's why we have so high yield and now I believe we are in the era when we have a great foundation currently we have a proven models we have protocols like in gearbox which works for years with zero security incidents etc etc and people start to trust them and now I predict it will be distinguish between people who are really interested like a safe part for their money.

It's a strong demand especially from a big capital who are not interesting to play the casino who want to expectable returns and in this case this analysis from onchain data combining with some attention data from the social networks news etc could be very very beneficial but still the high yields would try to figure out the most risky place and build new products. We also were witnesses of this memecoin money. It's really no one can predict why this memecoin could be better than other. Yeah, we have still no mass equations to evaluate these meme coins. But all these high-risk activity try to figure out new form and I believe new innovations will be totally different.

Now we have a foundational model especially on Ethereum very good innovative defy infrastructure and now it's become more and more stuff I really appreciate superform with launching this stuff who put uh money across different pools because we have a monitoring system and all time when we see someone put money take money after few minutes put money take money we said what's going on why someone deposit and take like a 5 million like in a few minutes maybe it's a hack maybe it's something because we immediately detect this anomaly and why because it's one small change in interest rate ask both because now gas is not so close to move funds and I believe for such kind of product who really have a foundational stuff which is more predictable this this new innovative tokens it will be more and more automated like a superforms we as a lens think we'll create a different way to build collaterals and do this and people will be less involved but for higher yields you should go to some very innovative place and I can't predict what it would be the next generation of crypto projects when it would be still unexpected and very high and lucrative in terms of yields. So let's actually talk about the future yield users to come if you will. So when you guys are looking forward at both institutions and different retail players, how are you thinking about um I guess a maturing yield industry and what that means for the different types of players. I think this also in your case includes developers, right? So which is like a new type of customer for yield products.

And so interested to hear from each one of you. We'll just go down the chain about uh the future customers of yield as it relates to your specific context. Is this working? Yeah, this seems to be working now. Yeah.

So on on oiler, I think we have a a unique system which allows people to build all sorts of different types of credit markets. And so in you know in some ways oiler is not really a product for end users. It's more product for builders so that they can build uh you know yield products I guess in their own image for different classes of users. Some people want high risk and high reward. Uh and other people want uh you know to take more of a more low-risk senior position.

Fortunately for us, a lot of the time we don't uh as a as the developers of OER, we don't have to have a strong opinion on on where these things are are going to come from. Uh we've been amazed at times to see the kind of things that people build on Oiler. They're not things that we would have designed. They're not we haven't, you know, we don't know where the lenders and borrowers are coming from necessarily. Do you feel like the builders are asking for different features now?

Yes, 100%. I think there's um a swift change towards looking for features uh that provide uh consu more consumer protection. So better security features I think even when they come at the expense of the level of access that you could typically expect to get in DeFi which is normally just full permissionless but I think there's a move to uh from from yeah some some builders and other uh you know institutions I think that want to now come into DeFi but uh bringing board some of the consumer protections and and maybe compliance and and risk checks that you would expect to see from an institutional grade product in Tradfi. So yeah, that's that's certainly been a quite a big shift. Fortunately, oil is oil is set up for that.

So we're doing doing quite well on that front at the moment. Awesome. Thank you. Go ahead. Um I can I ask can I uh answer to your last question about innovations?

I believe uh currently the ST is pretty major but the new products are really differs. For example, now there is a very common practice to implement this uh delayed withdrawals. which exist on a which also connected to depositing money to be chain etc. And for example in gearbox we have a quite unique feature uh comparing on all all other lensing markets because we do not really take as collateral this assets it is still liquid you can really keep it on your account then start withdrawal from original protocol and do not pay uh the slipage. So literally if you have an LRC and you get three person APY and you have a slippage of half a person it looks like you pay two months of farming for someone who give you faster and it shouldn't be done with looping because if you loop like seven times and the time is a week you should wait seven week which is also not an option for you.

Gearbox is much faster and it's like the last feature we implemented because the market is changing. It's never stops. Luckily in crypto we can find new and new things in different token implementation and e generation which requires a little bit different approaches to keep them on the stage but before taking I believe superform also did a great job to make another layer. So some innovations will also be in automated uh management of the risks of yield of borrowing strategies. But I think you are better person to tell about that.

Yeah, Vic, I I'm curious really to hear about your customers and who you see as the future customers of SuperForm, the future retail DeFi users, and also, you know, whatever specifics you can share about where they fall on the yield curve, if you will, in the different customer segments as you see it. I think the end consumer that's looking for yield, we've just scratched the surface of it really. And I think the cost of capital for crypto users right now onchain is actually quite high which is why you have all these you know more elaborate programs to to try and get TVL. Um a lot of people in in the fintech world are stuck on apps like SoFi and Wealthfront and even Robin Hood where they're getting four or 5% APY. Um and the barrier for them so far has just been because they don't really understand what's going on on chain and no one's really created a nice onboarding experience for them to just go from bank account from from card whatever.

Um so the next version of Superform um we'll be launching shortly is uh we'll have a mobile app um on boarding through email pass key um it'll really feel like you're using a web 2 app to to get into crypto. I think the customer segment that um I think has the most space to grow is this near-term is what we've termed like a web 2.5 uh user which is currently like somewhere in between Coinbase and some earn platform on offchain like Binance or OKX and you know they are okay with the centralization right now but they're not able to really like participate in the true you know just degenerate degeneracy of DeFi onchain. Um and then those people are eventually going to come and uh use D5 protocols directly. Um but yeah, the actual retail consumer base I think what do you think is the target rate or the the range I guess for for those web 2.

5 users? What are they seeking? We it's actually our product research on this has been really funny because you'd think that it'd be something like oh they want 20% or something but actually they want something that's only a couple percentage points above what they're getting right now and they just want to know it's safe. Yeah. Um, so if there was like mechanisms to to create an insurance on chain or some downside protection, I think that would be that that's a much better product than just trying to maximize APY for sure.

So that that leads us to a point in the industry where it seems like the customer base is willing to accept a slightly lower yield base, but is actually seeking more sustainable, reliable sources. Right. Yeah. Yeah. And it's kind of just distilling our own heristics at this point, right?

Like I think if any of us saw 50% APY pool, I would I would stay away from it, even though maybe three years ago that would have been the first thing I I went to go deposit to. So, um, yeah, industry growing up a bit, I guess. Sam, I actually want to ask you a slightly different question, which is that I know you just uh went through your TGE with Spark. Congratulations. And I'm curious, you know, in terms of generating a sustainable strategy, you could think, you could talk a little bit about how you thought about that in terms of your TGE as a yield play and rewarding some of your early users and um how you approached it.

I mean um this is working. Uh yeah, like so uh I think it's important uh to build like a community around the project. people who are very interested in uh what you're building and uh sort of just have uh I mean this is kind of what DeFi is all about like having um people have uh ownership in projects that they're interested in. So yeah, I mean the TGE was uh was was pretty great. Um we're glad it's done and now we're moving we're moving on back to products.

But I think I actually want to address more the the earlier question with the uh the future of yield. So, um, actually the way I view it, I think actually we've reached uh the peak of a poolled lending model right now and I think it's a it's it's a relic of the fact that there just wasn't that much diversity in credit on chain. Um, so us as a capital allocator, we're not actually building lending infrastructure ourselves. We use other protocols uh such as oiler, morpho, a and so um we also have an internal lending market spark lend but uh our bet is more that the future is going to look a lot more um like lending's done in traditional finance. Traditional finance does not have one giant pool where everything is rated at the same risk.

Uh and there's a giant pool of lenders that just like uh lend in one giant bank basically. That's not how it works. And I think we're reaching the peak right now precisely uh with the introduction of private credit. So you see uh new um options becoming available in RWAs. This sort of diversity is only going to accelerate and so yeah, we're really taking a bet on this um more nuanced um more institutional uh style of loans.

Um we talked to lots of institutions and so yeah, again, they're not going to be borrowing from these giant uh pools. They're going to be more looking, it's going to be uh very very specific needs. And so I think projects like Oiler and Morpho are taking the correct bet and and the future is going to look more like um isolated markets just more and more uh diversity of uh like options available for the lender, the borrower. Um yeah, that's how I view it. Thank you.

Um we've got three minutes left and so let's have a little fun. Um it seems like there's pretty wide consensus here that the industry is indeed maturing that there are more real yield sources. Um that there's a greater connection then many ways it refers to like a convergence between DeFi yield products and tradi products. It's something a theme that's emerged here. But I'd like to throw back to the type of stuff that only crypto can do.

So, I'd love to hear from each one of you. What was your favorite most degenerate yield model that you came across and how can that provide sort of a cautionary tale to users that are entering DeFi today? I mean, there's been loads over the over time. I've not been a massive player in in this to be honest. I just don't have too much time to just sit.

I'm a very I'm I'm by by nature, I think, quite risk averse. So as soon as I see yields getting too high, I I sort of get get scared. So I um but in the early days I uh yeah, there was the yam farming and the the But from a model perspective, what's one of the more ridiculous things you've seen? Just from a pure like mechanistic thing. I mean, let's say if the if the theme of the panel is e is defi yield real the most unreal.

I mean, we've we've done some fun experiments ourselves in in our time. Yeah. I mean, we we realized that people were at one point just, you know, farming oiler tokens aggressively. Um, but they they sort of couldn't farm hard enough because of the constraints on the uh on the LTVs. So, at one point we said, well, why don't people we let people self collateralize their USDC so that they can farm uh oiler tokens.

And uh and it sounds kind of stupid because you're just lending and borrowing the same asset, but actually what you're kind of doing is then exchanging USDC uh interest. You're paying the spread to then basically farm the oiler tokens. And so that was one of the silliest things we've done I think but it worked quite well actually and and it and it and it made the market more efficient for farming. Would you do that today? No.

Go ahead. Uh I'm I really like in terms of ill generation the projects which have some foundational stuff in crypto the most great source of yield of course is rest taken because the money comes of real Ethereum usage and of course each integration with this source make it is not a speculative it's how the lending markets grows together with the whole infrastructure. Yeah, but that's a different question. We're talking about the most ridiculous. Uh it's it's it's not it's not ridiculous.

At my point, it's like the way how real uh blockchain usage generate money and they could be yield. And in terms of lending, it's more related about your agreement and expectation about the future. So it's like a mortgage. If you believe that the price of the your flat will be much lower in 10 years, you should not really take a mortgage. it's much better to rent.

But if you believe that market will goes up, it's totally fine. And it's why I believe the projects which still create a good flow of money into the industry development. No, it's just to move crypto funds into trade etc. We still build web 3 as a unique phenomena which makes and have a different values that traditional finance and I hope it will be still in our hearts. we will still focus more on decentralization etc.

And I am very happy when we support like money who goes to uh grow Ethereum ecosystem itself for v mode which is a very innovative part of curve which is also nice because you have a sometime horizons and in blockchain you have only energy in bitcoin and time because you can really make a lock and no other real resources in those all sound like real resources to me. I'm going we have no more no time left but skipping through like most ridiculous stuff. Uh, I think the the craziest thing I' I've seen is uh like the whole tap to earn thing, right? It's like I mean people like there's hamster wheels and and and people are smoke to earn, vape to earn. Have you played?

I have downloaded it. Okay. Um, but yeah, it's I guess yield isn't necessarily even something you have to earn on money, right? It's like you're just investing time into this thing. And the fact that you can actually like play to earn and make money is also something that I think is uh is pretty cool and unexplored.

Yeah, go for it. Yeah, I mean in this space there's always like funny stuff that pops up every now and then. I think there was the recent one. What was that stable coin that was uh pricing for your bonds at like $1 or something and then inevitably it just price to the actual price, right? So yeah, that was that was kind of amusing.

Funny. Um, all right. We're out of time, but thank you all so much. Uh, seems like DeFi yield is real and getting realer. Um, thank you all very, very much.

Thank you, Stable Summit. Thank you. Thanks.