TL;DR (and this is HUGE): looping makes sense for a select few niche markets again because of a NEW MECHANISM that sustainably compresses borrow rates relative to demand. Despite arguing that Junior tranches are often superior to leveraged loops, there's ONE META that actually makes looping interesting for me again. And if you're not obsessed with DeFi, you probably haven't heard about this. IN SHORT, teams like @fraxfinance and @Paxos give kickbacks equivalent to the TBILL yield for institutional LPs holding or lending frxUSD or USDG. THAT MEANS, big'ol LPs can hold NON-YIELD BEARING assets like PYUSD, USDG, and frxUSD and get 3-4% yield paid to them on a semi-regular basis. On top of that, they can then lend those assets on money markets for the 3-4% base yield PLUS whatever the interest rate pays. But here's the kicker. Because those rates are paid OTC to these lenders, the borrow DOES NOT PAY the additional TBILL yield like you would if you were borrowing a yield-bearing stablecoin. So the borrower might only be paying 4% in interest, despite the collateral depositor making 5-7%, which is very juicy for an institution who wants to be holding USDG or PYUSD or frxUSD, e.g. This means lower interest rates for borrowers, because lenders are no longer depending wholly on interest rates for compensation. Of course, this is unique to specific markets, but I feel fairly confident this meta will drive some insane TVL growth in the near future.