Latest news with #MakerDAO
Business Insider
03-07-2025
- Business
- Business Insider
DWF Ventures Releases Deep Analysis of DeFi Lending Markets
DWF Ventures, the venture arm of web3 investor and market maker DWF Labs, has published a detailed analysis of decentralized finance lending markets. The report examines key players, market dynamics, and emerging trends shaping the lending landscape, with a focus on protocols driving innovation across the omnichain landscape. The analysis explores the competitive lending market, where protocols like Aave, Compound, and Sky (formerly MakerDAO) are vying for dominance. Lending markets have grown significantly, with total value locked in DeFi lending protocols surpassing $65B across major chains. The report highlights the critical role of lending in DeFi, enabling users to borrow against collateralized assets while providing lenders with yield opportunities. DWF Ventures identifies several strengths in the current lending market, including robust protocol revenues, high capital efficiency, and increasing adoption of cross-chain lending solutions. It notes that Aave's market share has increased to around 60% and examines its forthcoming v4, which introduces a Hub and Spoke architecture that enhances modularity, liquidity, and developer flexibility. The report also highlights innovative features like flash loans and dynamic interest rate models, which enhance user flexibility and improve market resilience. However, the analysis pinpoints concerns about potential risks, including liquidation cascades during market volatility and regulatory uncertainties impacting DeFi's growth. DWF Ventures notes that while lending protocols have shown resilience, the sustainability of high yields and the impact of declining crypto prices remain challenges to monitor. The report points to promising developments, such as the integration of real-world assets (RWAs) into lending protocols and the rise of undercollateralized lending models, which could unlock new use cases. DWF Ventures also emphasizes the growing importance of Solana-based lending platforms, which benefit from low transaction costs and high throughput, positioning them as strong competitors to Ethereum-based protocols. The report concludes by touching upon positive tailwinds such as a more favorable regulatory climate and the rapid growth of stablecoins that are accelerating growth, noting: 'These tailwinds not only reinforce lending markets as the backbone of DeFi but also position them to become the fastest-growing sector in the DeFi ecosystem.' The full DWF Ventures lending markets analysis can be read here. DWF Labs is the new generation Web3 investor and market maker, one of the world's largest high-frequency cryptocurrency trading entities, which trades spot and derivatives markets on over 60 top exchanges. Contact Lynn Chia
Yahoo
26-06-2025
- Business
- Yahoo
Newest 'Star' in Sky Ecosystem Launches With $1B Tokenized Credit Strategy
Grove, a new decentralized finance (DeFi) protocol focused on institutional-grade credit infrastructure, emerged from stealth on Wednesday with a $1 billion commitment to a tokenized asset strategy. The protocol aims to bridge DeFi with traditional financial assets by routing on-chain capital into regulated credit investments, focusing on collateralized loan obligations (CLOs). Through its infrastructure, Grove gives crypto-native protocols and asset managers access to real-world asset (RWA) investments, helping them put idle reserves to work and a yield that's independent from crypto markets. The launch also marks Grove's debut as the latest "Star" within the Sky Ecosystem, one of the largest and longest running DeFi lender formerly known as MakerDAO. Sky is undergoing an overhaul called Endgame that breaks the protocol into autonomous units called "stars," each responsible for its own governance and innovation at the edge of the ecosystem. The first such entity was Spark, a yield-earning and borrowing protocol. Sky also issues the $3.7 billion DAI and $3.4 billion USDS stablecoins, and has been increasingly shifting reserves to real-world assets such as tokenized Treasuries. Grove starts out with a $1 billion allocation from Sky that will put into the Janus Henderson Anemoy AAA CLO Strategy (JAAA), a tokenized fund of managed by Janus Henderson and built on Centrifuge, a blockchain platform that specializes in real-world asset tokenization. The core contributor team behind Grove — Mark Phillips, Kevin Chan and Sam Paderewski — had previous experiences at Deloitte, Hildene Capital Management, BlockTower Capital and Citibank before transitioning to DeFi. The protocol was incubated by DeFi specialist Steakhouse Financial, a firm that played a key role in bringing real-world assets into the Sky system. "While tokenized treasuries have paved the way, there's a growing demand for more diversified, high-quality assets on-chain," said Anil Sood, chief strategy and growth officer of Centrifuge. 'With the launch of Grove, for the first time, protocols can access liquid, institutional-grade CLOs while maintaining the flexibility to pivot between DeFi and TradFi yield environments," said Sam Paderewski.
Yahoo
13-05-2025
- Business
- Yahoo
DeFi Savings Protocol Sky Slumps to $5M Loss as USDS Interest Payments Wipe Out Profit
DeFi savings protocol Sky posted a first-quarter loss of $5 million after interest payments to token holders more than doubled, according to a report created by Sky contributors from Steakhouse Financial. The loss is a stark turnaround from the previous quarter, when Sky, formerly known as MakerDAO, registered a $31 million profit. The reason for the 102% increase in interest payments is the decision to incentivize use of the protocol's newer Sky dollar stablecoin (USDS) over the existing DAI. "The Sky Savings Rate was kept very high at 12.5% relative to the rest of the market, driving massive inflows" Rune Christensen, co-founder of Sky, told CoinDesk over Telegram. When Sky began lowering interest rates to 4.5% in February, a lot of investors stuck around, he said. The situation is a double-edged sword for the protocol, which was among the first cohort of decentralized finance apps to spring up on Ethereum in 2017. Sky operates similar to a traditional bank. It needs to lend to others at a rate higher than it pays its savers. However, offering higher rates on USDS without a corresponding increase in demand for the stablecoin is hurting the protocol's profitability, PaperImperium, governance liaison at blockchain research and development company GFX Labs, told CoinDesk over Telegram. "USDS is a major drag on earnings," he said. "DAI makes money. USDS, not so much." The push toward USDS is part of Sky's so-called Endgame plan, an initiative led by Christensen aimed at transforming the protocol into a more decentralized and resilient system. When Sky rebranded from MakerDAO and launched USDS in August as part of Endgame, the plan was that the new stablecoin would appeal to a different set of users than DAI. USDS was designed to better comply with regulations and financial reporting requirements. It was targeted toward sophisticated investors like hedge funds, family offices and other institutions looking to dip their toes into decentralized finance. But it's unclear if USDS has been able to attract a substantial number of new users. The returns investors can earn on USDS comapred to DAI is different: USDS pays out 4.5%, while DAI yields 2.75%. Many investors swapped their DAI for USDS, meaning Sky had pay out more to people who previously were happy to earn a lower yield or, in many cases, no yield at all, PaperImperium said. To be sure, the report said the combined supply of USDS and DAI has increased 57% since the start of the quarter. But a large part of this increase is from Ethena, the synthetic dollar protocol. It has piled over $450 million into staked USDS, and passes the yield on to those who stake its own stablecoin, USDe. Over the past week, Ethena has switched some of its reserves from USDS to USDtb — a stablecoin backed by BlackRock's USD Institutional Digital Liquidity Fund, or BUIDL. The move means there's less USDS in circulation. But it may also benefit Sky by reducing the amount of interest the protocol must pay out. Read more: Sign in to access your portfolio
Yahoo
06-05-2025
- Business
- Yahoo
How To Pay Down Your Student Loan Debt With Crypto
Student loans have become a massive burden for millions of Americans. As of 2024, nearly 43 million borrowers owe a total of $1.77 trillion in student loans, with the majority being federal loans. Be Aware: Coinbase Fees: Full Breakdown of How To Minimize Costs Try This: The New Retirement Problem Boomers Are Facing While traditional methods of repaying student loans involve using your income to make monthly payments, you can also use crypto to tackle debt. Here are two ways to pay down student loan debt with crypto. Next, find out how you can pay your bills with cryptocurrency. Take Out a DeFi Loan DeFi, or decentralized finance, is a financial service that runs on blockchain networks, like ethereum (ETH). Unlike traditional banks, DeFi platforms don't rely on human approval. Instead, they use smart contracts to let people borrow, lend or earn interest on their digital assets. So, how do DeFi loans work? Say you have $15,000 in student loan debt and own $30,000 worth of ETH. Since you don't want to sell your ETH because you think the price will go up over time, you can use a DeFi platform like Aave or MakerDAO to deposit your ETH as collateral and borrow $15,000 in stablecoins. You can then convert the stablecoins into U.S. dollars and pay off your student loan debt. Once you repay the borrowed amount plus the interest, you get your ETH back. However, most DeFi platforms will only let you borrow 50% to 70% of your collateral's value. This is called the Loan-to-Value (LTV) ratio. If the value of your crypto drops significantly, you may be liquidated, meaning the platform sells part of your digital asset to cover the loan. Read Next: If Trump Eliminates the Department of Education, Do You Still Have To Pay Your Student Loans? Pros Lower interest rates: The first thing that makes DeFi loans attractive is the low interest rates and flexible repayment schedules. In some cases, borrowing rates are near zero. No credit score required: Since these loans are issued via smart contracts and not by financial institutions, you don't need to have a good credit score. Your crypto acts as the collateral instead of your credit history. Cons While using DeFi loans to pay down student loans has advantages, it's not without risks.
Yahoo
09-04-2025
- Business
- Yahoo
How DeFi 'Defied' Market Carnage as Traders Poured Millions Amid Panic
This week's tariff-inspired market meltdown has led to a rapid sell-off across crypto-assets, with BTC trading below $80K and ETH hitting a two-year low of $1,432. The decentralized finance (DeFi) sector was not entirely immune to the chaos as total value locked (TVL) slumped to its lowest point since November at $95 billion. But it wasn't all bad news for DeFi. Amidst plunging asset prices, DeFi showed resilience with muted outflows with key usage metrics faring far better than the price of ETH, the asset that underpins much of Ethereum's DeFi ecosystem. TVL on Aave, the largest DeFi protocol, rose in ETH terms this week as deposits hit a record high of 11.02 million ($17.32 billion). Deposits have been steadily increasing since the turn of the year when it stood at 3 million ETH. What this shows is that whilst the recent bull market was focused on hype-fueled meme coins, the real-world use case of DeFi is still very much alive. In previous cycles DeFi has suffered due to centralized exchange dominance and a lack of liquidity, now capital is flooding in as traders deploy delta-neutral strategies, which increases liquidity on the long-term health of DeFi. As the market edges closer to bearish territory, DeFi may well be one of the pillars keeping crypto afloat. Aave was not the only protocol to experience inflows this week. TVL on Sky - formerly MakerDAO – increased from 1.85M ETH to 4.63M ETH. Lending protocol Spark also had a 1 million ETH boost in deposits earlier this month, according to DefiLlama. The rush to DeFi during a market sell-off can be attributed to traders looking to de-risk, moving to stablecoins to acquire a delta-neutral yield through lending and borrowing instead of holding spot exposure during a volatile market. Decentralized exchange volumes have also remained steady, hitting $11.8 billion on Monday and $9.8 billion halfway through Tuesday compared to last week when volumes failed to top $7 billion on any single day. Sign in to access your portfolio
