šIs DeFi lending still worth it?
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GM friends.
Hereās what Iāll cover today:
šIs DeFi lending still worth it?
š Crypto chart of the week
šļø The latest DeFi news
šIs DeFi lending still worth it?
There has been a debate on Crypto Twitter in the past days about DeFi lending.
Some people see it as a passive, low-risk way to earn some additional money.
Others argue that DeFi lending is currently not worth it, given the risks involved and the very low yield on most money markets.
I wanted to share my take on this and some data that I believe is useful.
Letās dive in š
Iāll start by sharing some quick facts:
The avg. APY for stablecoin lending is currently at ~4%
8 lending projects suffered losses due to exploits/technical errors in 2026 so far (with Driftās $280M hack being the largest one), according to DefiLlama
The U.S. T-Bills Yield, which is considered risk-free, is between 3.5% & 3.8%
Most people on Euler, Silo, and Morpho who lent money to pools with exposure to Resolvās wstUSR or Stream Financeās xUSD still didnāt get their money back
The reason I shared this is to illustrate the following:
While overcollateralized crypto lending may seem low-risk to many people (since, theoretically, once the collateral value falls below the loan value, the collateral should be liquidated instantly and lenders should get their money back), the reality is that lending comes with many risks.
There are many things that can go wrong.
Oracles can be misconfigured and trigger liquidations only when it is too late (happened many times)
Risk curators on permissionless lending protocols like Morpho or Euler are incentivized to accept riskier collateral in order to collect higher fees, even though they are putting their vault users at risk by doing this
Lending protocols (especially the new ones, not the OGs) are historically some of the most vulnerable dApps to hacks
Aave has historically done a great job at accepting only high-quality collateral and avoiding bad debt. Thatās why so many people trust it, and it has $42 billion TVL.
But on Aave V3, its USDC supply APY is 2.6% at this moment.
Even with its fantastic track record, itās hard to say the yield justifies the risk when the risk-free yield on US Treasury bills is above 3.5%.
So whatās my advice?
First of all, if you still choose to lend your capital in DeFi, make sure you fully understand what you are doing. Check what oracle is used for liquidations, who curated that market, and what collateral youāre exposed to.
All of this might sound a bit complex, but if you donāt fully understand the risks you are taking first, then I donāt think it is worth lending.
Secondly, I believe that most of the time itās better to be a borrower than a lender when using a lending protocol.
Borrowing obviously also comes with higher risks, but in the post below, for instance, I shared a PT looping strategy on Aave that returns up to 15% APY.
15% APY is almost 6 times higher than the USDC lending yield on Aave V3.
Youāre indeed taking several risks when looping, but at least the yield is high enough to justify taking risks from a risk/reward perspective.
A looping strategy obviously carries liquidation risk in the event of depegs, and you need to constantly monitor borrowing rates and your health factor, but to me, it makes more sense to be a borrower than a lender, given the significantly higher yield.
Especially considering that you can automate stop losses, repayments, and/or alerts for your borrowing positions on many protocols with tools like DeFi Saver.
To sum it up:
If you have idle stablecoins in your wallets, I donāt think itās worth lending them out if the yield youāre getting is lower than the US Treasury bills yield (3.5%).
You risk losing your entire (or a good part) of your capital for a very low return.
If you want to use them in DeFi, make sure you first understand the risks associated with each opportunity and that the yield you get is high enough to justify them. Otherwise, it may be better to just keep the stablecoins in your wallet.
Your number one priority (especially in a bear market, when most exploits and rug pulls occur) should be to survive.
Take risks, but make sure that they are always calculated risks.
Together with DeFi Saver
DeFi Saver has integrated Aave V4 from day 1
Aave V4, one of the protocolās biggest upgrades to date, has just gone live.
And from the start, DeFi Saver is bringing its suite of DeFi automation and management tools to Aave V4.
Hereās what you can do on Aave V4 via DeFi Saver:
Use its 1-transaction leverage management tools to open a leveraged position or close one on AAVE V4 in just a few clicks
Set stop loss, take profit, or other leverage management orders for your loans
Migrate from Aave V3 to Aave V4 using DeFi Saverās Loan Shifter tool
Use Collateral and Debt switch options to swap out your collateral or debt asset for another asset
Lend assets into V4 hubs
DeFi Saver is an asset management application that can save you time and enhance your user experience through its exclusive features built for Aave V4.
Over $1 billion of assets in Aave V3 positions are managed through DeFi Saver.
The user interface is designed to be intuitive, making DeFi Saver easier to use.
Later in April, DeFi Saver will also release its Notify features, allowing users to set up notifications for Aave v4 position health changes and market cap changes.
Learn more about the DeFi Saverās Aave V4 integration here!
Chart of the week
ETH supply on exchanges is at all-time lows
Crypto meme of the weekš
The latest developments in DeFi
Hyperbeat launched Liquid Banking - the first on-chain neobank on Hyperliquid
Ethena announced plans to use institutional lending, RWAs, and equity basis trade to generate yield
INFINIT launched the Prompt-to-DeFi Strategist Challenge on BNB Chain - a competitive program rewarding users for creating innovative yield strategies
Lighterās perps trading was integrated into Telegram
Polymarket announced Polymarket USD - its own stablecoin
OpenCover launched Covered Vaults - DeFi insurance for Morpho lenders
Solana Foundation announced STRIDE - a 24/7 threat monitoring program to protect Solana dApps from potential exploits
RAAC launched iREET - an index real estate exposure token
Polygon is in talks to raise $100M for a new stablecoin payments business
Saturn, a yield-bearing stablecoin protocol backed by STRC, went live
Kinetiq launched kHYPE V2 - a major upgrade to its liquid staking $HYPE token
Chaos Labs stepped down as Aaveās risk manager
Acrossās proposal to replace its token with equity passed
SushiSwap launched its perps product powered by Hyperliquid
Based bought back 4% of its token circulating supply in its first buyback
Thatās all for this week!
Until next time,
The DeFi Investor
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