📝 Editor’s Note:

DeFi is a more intricate ecosystem than it was over six years ago when a group of developers coined the term. Now, crypto is starting to look a bit more like Wall Street as investors and traders chain transactions across many protocols to arbitrage differences in yield.

For this issue OurNetwork is focusing on yield, the rates of return investors can get across DeFi, especially with their stablecoins. You won't find the flashy, token-fueled, triple-digit yields of 2021, but you will find a quick update on some of the most impactful rates in the space which are providing yield on billions of dollars.

Thanks to Tyler of the vaults.fyi team for kicking this off, also to Hubert and Pauls for covering Stake DAO and f(x) Protocol. Owen from the OurNetwork team also took a look at Pendle, a key project in the yield space.

– ON Editorial Team

Stake DAO | f(x) Protocol | Pendle

• While Ethereum mainnet remains the hub for DeFi activity, lenders are finding higher rates on networks offering incentives to attract liquidity. Vaults.fyi's stablecoin benchmarks show higher seven-day average APYs on Polygon (5.64%), Base (5.34%), and Unichain (5.09%) compared to Mainnet (4.81%).

• Ethereum is leaning into its "defipunk" journey, with ETH increasingly used as productive collateral. Aave is ETH's largest lending market and now holds over 3M WETH with roughly 5M additional ETH in staking derivatives like stETH and eETH. DeFi and yield continue to play a growing role in the Ethereum economy.

• Ethena's sUSDe, the staked version of the protocol's synthetic dollar, has seen a powerful resurgence, signaling renewed market confidence. After a sharp drawdown in April, the protocol's total value locked (TVL) has recovered significantly, adding over $1B in the last 30 days alone. This highlights a returning appetite for stablecoin yields in growth-stage products.

• Stake DAO is a boost aggregator that enables its users to get the best yield on the blue-chip yield sources like Curve, Pendle, Yearn, Balancer, and many others. Recently, its Onlyboost product, which optimizes yield between Convex and direct Curve deposits, saw a very steep growth, enabling Stake DAO's yield strategies to exceed $100M in TVL. Recent growth has also come from Stake DAO's attractive Pendle strategies which experienced over 50% growth in May alone.

• The momentum is likely probably due to the snowballing effect of individual yield strategies reaching critical size, which enables users to suffer from limited dilution after they deposit. Indeed, there are currently 27 yield strategies with more than $1M. This figure grew by a factor of two and a half since February.

• This may jump to a new level — Stake DAO just announced its new liquidity provider staking architecture that will improve how yield aggregators accumulate and distribute rewards.

• f(x) Protocol is sitting today at $195M TVL, marking a new ATH for the protocol. Both leverage long markets —BTC & ETH— continue to bring yields to fxUSD. The Stability Pool TVL crossed $80M in TVL, with over $38M being deposited in fxSAVE, f(x)'s yield bearing stablecoin. According to stableyields.info fxSAVE has the highest yield from all DeFi stablecoins, with the 30 day average of 10.69%. The APY comes from real yield, not token inflation.

• fxUSD circulation has surged from ~$8 M in Aug 2024 to ~$52.8 M today, with market cap reaching ~$58 M. That's a ~560% expansion in under 10 months. The stablecoin remains tightly pegged at ~$1, reflecting it's resilience under a variety of market conditions.

• f(x) generated over $3.72M in revenue over the past 12 months, from trading commissions and ETH staking rewards. Revenue is split between the Stability Pool and Treasury, with 75% of the Treasury’s share distributed to veFXN holders.

• Pendle is a protocol which splits yield bearing tokens into two assets — one which represents the principle asset, and one which represents the yield. With just over $5B in TVL, Pendle is DeFi's ninth largest protocol. Ethena's synthetic dollar represents the largest portion of TVL in Pendle — there's nearly $2B of sUSDe deposited in Pendle and over $700M of USDe in the protocol.

• Pendle's PT tokens are used as collateral throughout DeFi. Since enabling PT token deposits, Aave has attracted over $1B worth of the Pendle-derived tokens. That's ahead of Euler, which ranks second with $71.8M in PT tokens which has $13.4M as of June 8.

• Users can stake Pendle's PENDLE token to receive vePENDLE. Like Curve Finance's veCRV, holding vePENDLE offers yield from the protocol and offers the ability to vote on further PENDLE incentives. Roughly 18% of PENDLE is staked and the largest holders are Penpie, Equilibria and an unlabelled address, according to Defi Wars.