Data from Neutrl shows that the decentralized finance (DeFi) sector is experiencing one of its lowest-yielding periods.
Low-Yield Era in DeFi
The average annual percentage rate (APR) for stablecoins, weighted by total value locked (TVL), has dropped to 5.8%. This marks a significant shift from the double-digit returns that characterized the DeFi boom.
Where to Find High Yields?
Among well-known DeFi protocols, Pendle’s Level USD IY product offers the highest stablecoin yield at 12.4%. Meanwhile, the USDC deposit rate in Aave V3 stands at 3.4%, highlighting its focus on liquidity and lower-risk lending mechanics.
Reasons for Low Yields
Several factors contribute to this low-yield environment:
* Lower risk premiums: As DeFi matures, protocols are becoming more conservative with rates. * Stagnant demand for borrowing: Reduced speculative trading has led to less borrowing, lowering yields. * Regulatory pressure: Ongoing scrutiny has encouraged platforms to adopt more cautious practices.
For users, this shift means it’s now more important than ever to evaluate risk, lock-up periods, and protocol reliability when chasing yield in DeFi.
