TID Capital

Weekly Yields January 5, 2026 State of Yields: Compression Stalls, but Durability is Tested The structural downtrend in onchain yields has hit a pause. After weeks of compression, we are finally seeing a reprieve in baseline rates, driven by a resurgence in funding rate volatility over the last 7 days. This volatility translated directly into higher stablecoin yields—most notably sUSDe rerating to 5.09%—which appears to have arrested the recent decline in TVL. We are observing a correlation between this uptick and renewed demand for leverage/looping strategies on funding-backed assets (sUSDe, wstUSR). The trailing metrics driving the current APY are higher than the instantaneous funding rates. Unless spot funding recovers to match the 7-day average, the current yield floor is unlikely to hold.

@jolly16283321 @tid_research for silo specific updates please check silo discord for stream case progress - we're keeping an eye on proceedings and will give updates here.

@tidcapital @tid_research Please give us regular updates on the tid vaults on Silo. It is still holding,what is the progress ？We need clear information and updates.

Weekly Yield threads are pivoting to being posted under @tid_research This account will be reserved for position disclosures and threads, and information related to any vaults we are curating. x.com/tid_research/s…

6/ Quiet Yields on New Chains Beyond the hype of the Plasma, Monad, or Stable, new entrants are paying a premium to bootstrap liquidity. Katana (via Turtle Club): Pre-deposit vaults are currently reflecting >40% APR on stablecoins (USDC/USDT), significantly outpacing established benchmarks. Flare (SparkDEX): Liquidity incentives for stable-pairs (e.g., USDT0-cUSDX) are yielding ~18% - 20% APR. Unlike base yield, these APRs are often derived from "points programs" or governance token allocations. They carry execution risk: realized returns depend heavily on future token valuations and are subject to vesting schedules. This is an equity play, not a fixed-income guaranteed rate.

5/ The Battle for Collateral As the market recovers, the race to capture user attention and capital has intensified. We are seeing a resurgence of aggressive incentive programs from both DeFi protocols and Centralized Exchanges aimed at sticky collateral. Ethereal Exchange: In a bid to bootstrap open interest and TVL, the protocol is offering ~27% APR for depositing collateral and maintaining positions. Binance x USD1: Major CEXs are joining the fray. Binance has launched a booster program for World Liberty Financial's USD1, offering 20% APR (capped at $50k per user) to attract stablecoin inflows

Weekly Yields January 5, 2026 State of Yields: Compression Stalls, but Durability is Tested The structural downtrend in onchain yields has hit a pause. After weeks of compression, we are finally seeing a reprieve in baseline rates, driven by a resurgence in funding rate volatility over the last 7 days. This volatility translated directly into higher stablecoin yields—most notably sUSDe rerating to 5.09%—which appears to have arrested the recent decline in TVL. We are observing a correlation between this uptick and renewed demand for leverage/looping strategies on funding-backed assets (sUSDe, wstUSR). The trailing metrics driving the current APY are higher than the instantaneous funding rates. Unless spot funding recovers to match the 7-day average, the current yield floor is unlikely to hold.

6/ Principal Tokens (Risk-Off): Fixed Income: The PT market is seeing growing TVL as sophisticated capital seeks deterministic returns. Assets like ONyc (Jan '26) and hyUSD (Apr '26) are trading at discounts (~0.989 and ~0.965 respectively), offering attractive fixed yields for those looking to lock in rates amidst the noise.

5/ The Volatility Premium: Derivatives & Fixed Yields Beyond standard stablecoin loops, Solana’s yield stack is deepening. The ecosystem is now effectively monetizing volatility through lending and structured products, while simultaneously building out a fixed-income curve. Derivatives (Risk-On): Wasabi (Spot Leverage): Lenders supplying liquidity for directional spot traders are capturing significant premiums. USDC supply APYs are currently holding >25%, driven by high utilization from leverage demand. Mooncake (Leveraged Tokens): RateX’s Mooncake allows users to LP for leveraged token inventory (e.g., 10LPSOL). This counterparty role is currently printing >45% APY, directly harvesting the aggressive trading activity. Principal Tokens (Risk-Off): Fixed Income: The PT market is seeing growing TVL as sophisticated capital seeks deterministic returns. Assets like ONyc (Jan '26) and hyUSD (Apr '26) are trading at discounts (~0.989 and ~0.965 respectively), offering attractive fixed yields for those looking to lock in rates amidst the noise. Solana is rapidly maturing from simple "yield farming" into a comprehensive financial market with distinct risk tranches.

Weekly Yields Dec. 29 Funding Yield Transmission Failure leads to Looping Opportunities. 1/While CEX funding rates are showing signs of bottoming out and stabilizing, on-chain yields (sUSDe, wstUSR, RLP) continue to compress. The "risk-on" signal from the perp market is failing to translate into higher staking APY due to two structural dampeners: Ideally, the flow from perp markets to DeFi is straightforward: rising funding rates boost staking yields for sUSDe, wstUSR, and RLP. This yield expansion incentivizes users to loop these assets, driving demand for leverage and pushing on-chain borrowing APYs higher. Collateral Dilution (sUSDe): The sensitivity to funding spikes has dropped significantly. With liquid stables and RWAs now comprising >60% of Ethena’s backing, the protocol effectively trades upside capture for stability. Venue Specifics (wstUSR/RLP): Execution venue dominance is dragging down aggregates. A massive portion of basis trading inventory sits on Hyperliquid (e.g., ~53% dominance in observed pairs), where funding rates remain persistently dampened compared to Binance or Bybit. High CEX funding no longer guarantees immediate on-chain yield expansion. Until we see a rotation out of defensive collateral or a rate equalization on Hyperliquid, on-chain yields will remain sticky.

5/ Capital Rotation: The Solana Yield Frontier While EVM markets face yield compression and lingering risk aversion following recent incidents (Balancer Hack, Stream/Elixir/Stables Labs defaults), Solana DeFi is accelerating. New stablecoin issuers are aggressively bootstrapping liquidity, distributing significant incentives to capture TVL in this high-growth environment. Key Solana Opportunities: USDu-USDC: Leading the pack with ~16.50% APY (TVL: $2.24M). PYUSD-USDC: Institutional scale yielding ~10.97% APY with deep liquidity ($30M TVL). hyUSD-USDC: Offering ~10.34% APY. PRIME/USDC (RWA Loop): For higher risk tolerance, looping strategies are unlocking up to 21.00% APY.

4/ The widening spread between depressed borrowing costs and elevated fixed rates has fueled a surge in PT looping strategies. By leveraging cheap on-chain debt to accumulate high-yield PTs, sophisticated users are currently capturing 25% - 29% ROE on platforms like K3 Capital and Euler: Execution Risk: As demand for these strategies grows, PT liquidity is tightening. Users must check entry price impact closely. High slippage on entry can immediately erode the theoretical edge of the loop, turning a profitable arbitrage into a net loss.

BenchMark Rates and Yields - Week of Dec.22 1/ Funding Rates Signal Potential Floor for Compressed On-Chain Yields On-chain base yields continue to drift lower, reflecting a broader compression in lending demand. For context, Spark Liquidity Layer’s effective rate has retraced to ~4.42% amidst this downtrend. However, the derivatives market offers a divergent signal. Funding rates are consolidating rather than collapsing, with average funding for BTC and ETH sustaining near the 10% mark over the last two weeks. This spread between base rates and leverage costs is key. If funding levels hold or expand from here, it indicates sustained demand for leverage—a leading indicator that on-chain yields are likely bottoming out and poised for a reversal.

5/ Fixed Income Analysis: The Pendle PT Compression Reflecting the broader dampening of on-chain rates, the fixed-yield market on Pendle is undergoing a significant repricing. The "easy alpha" of locking in 20%+ fixed rates has largely dissipated as the market corrects. Previously, staked and restaked assets consistently traded in the 15% - 20% range. As liquidity has deepened and volatility declined, this premium has compressed. The current ceiling for these high-beta assets has formed distinct resistance below 15%. Assets like syzUSD and sUSDai are holding the line at ~13-14%, acting as the new upper bound for fixed-term yields. The compression is more aggressive for unstaked assets. Standard stablecoin exposures (e.g., NUSD, thBILL, USDf) have broken below the psychological 10% support level, now trading in the 8-9% range. While PTs remain a popular instrument for risk-averse allocation, the window for outsized fixed returns is narrowing.

4/ Sector Recovery: The Yield-Bearing Stablecoin Survivors The recent defaults involving Stream Finance, Elixir, and Stable Labs caused a significant contraction in the sector. However, a specific cohort of yield-bearing assets has not only survived but is seeing a resurgence in TVL and performance. Two protocols, in particular, are distinguishing themselves with native yields consistently holding above 12%: -Avant Protocol (avUSD): Currently offering a 12.50% staking APY with TVL climbing back to $97.75M. -Yuzu Money (yzUSD): Maintaining a stable 13% APY on staked positions with TVL climbing above $20M. Unlike the opaque strategies that led to recent failures, these yields are primarily derived from PT (Principal Token) loop, which performs the best during current market conditions where PT prices are rising with low borrowing cost.This structural transparency has helped restore market confidence. For risk-tolerant capital, the opportunity extends beyond the native yield. By looping these assets on lending markets like Euler or Morpho, we are seeing projected ROEs exceeding 30%. This arbitrage utilizes the spread between the high native yield and the relatively efficient borrowing costs of the underlying stablecoins. However, this is not a "set and forget" allocation. Strategy Monitoring: Users must actively monitor the underlying PT strategies for liquidity constraints. Liquidity Risk: Be cognizant of redemption windows and unstaking limits, which can be tighter than standard stablecoins during periods of volatility.

Weekly Yield Thread - December 15th Is Onchain Yield Finally Finding a Floor? After weeks of compression, the Spark Liquidity Layer APY is showing signs of stabilization, currently hovering at 5.1%. This break in the downward trend coincides with a measurable pickup in average funding rates for BTC and ETH. According to the data from Block Analitica, the aggregate Funding Benchmark has spiked and stayed above the Borrow Benchmark for the first time in weeks, potentially establishing a floor for supply yields. We are in a critical observation window. While the immediate decline has paused, a confirmed bottom is strictly conditional. If funding rates cannot sustain this momentum, the current support level may prove fragile. We remain cautious until the trend is confirmed.