bobby
7.9K posts
1/ Onchain lending is entering the next generation. DeFi lending has hovered around ~$35B for two years. Meanwhile, RWAs are bringing sustainable, predictable yield onchain at unprecedented scale. Tokenized treasuries alone have grown +250% to >$13B, with gold, credit, and other fixed-income products right behind them. The borrowing infrastructure around these assets is already running at 90–99% utilization. Billions in fixed-yield collateral are being funded on floating-rate rails built for a different era. Over the past year, Aave's USDC borrow rate had a std. dev of ~95 bps. This is fine for leveraged ETH/BTC where borrowers are less rate-sensitive, but inefficient for fixed-yield assets like tokenized treasuries earning 3.3–3.7% in a tight band. As more RWAs come onchain, the volatility mismatch between funding and the underlying asset becomes a binding constraint on leverage. @Morpho Midnight and @aave v4 are architectural rewrites designed to fix this 🧵
