Deep Dive: DeFi Yield Sources | Guy & Sam
Episode publishedPodcast: Bell CurveBell Curve
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The growth of, tokenized T bill products is, like, precisely because the major stable coins are not providing, any, permissionless yield into the ecosystem. And so this growth will continue as people demand more capital efficiency. Hey,
everyone. Quick disclaimer before we get into today's episode. Nothing said on Bell Curve is a recommendation to buy or sell securities or tokens. This podcast is for informational purposes only, and the views expressed by anyone on the show are solely our opinions, not financial advice. Our guests and I may hold positions in the companies, funds, or projects discussed. Alright, everyone. Welcome back to another episode of Bell Curve. Today, I'm joined by Guy Young, Latina, and Sam McPherson. Spark. Guys, welcome. Good
to be here. Yeah,
guys. This is gonna be a fun one. We are gonna be doing a deep dive on all things DeFi. So we're gonna be talking about different sources of yield. We're gonna be talking about American DeFi, baby. And, yeah, we're also gonna be talking about some of the upcoming plans for both Spark and Athena. So this should be a lot of fun. But, before we get into it, I, or maybe starting from the top here, I actually wanna talk about the different sources of yield that exist in DeFi today, and I think that's gonna flow nicely into some of the partnership that Athena and Spark, the partnership between Athen
Yeah. Sure. And, I'll run over them historically. So, originally, the yield sources in, DeFi so Maker was one of the first, DeFi projects, that emerged in 2019. Multi collateral DAI was launched, and the yield sources, at that time were primarily, coming from, crypto over collateralized native lending, and this is primarily against ETH and, Bitcoin. So this is, you know, I think a lot of, like, OG users are familiar with this. You lock up your ETH into a CDP, and then you could mint DAI, and then you're paying interest on this loan, and this is the source of yield. So this remains today as one
Guy, before I take it over to you here, Sam, my follow-up question for you is can you just talk a little bit about the quantum or the amount of yield in each of those 3 buckets? And, you know, I know there was a a a pretty large pivot, for folks who don't have the full history of, Sky at the time maker when when there was this kind of shift into and this embrace of RWAs. So can you just give us that little bit of the the history of, Sky and why that decision was made and then talk about the relative size, of each of these different yield buckets?
Yeah. Okay. So going back to, again, the beginning of Maker, the original, so it was always imagined there would our RWAs would be required to be collateral for, DAI. Rune from the beginning has been saying this. But in the in the original, launch of of, DAI, the the main the only collateral actually was ETH. So, at the time, there was more demand for leverage than there was for people holding, DAI right up until March, 2020 when we had the Black Thursday event. And that in that case, the demand for DAI, became higher than the amount of demand for leverage on the other side, and so the dollar
Yeah. I think Sam's right there. So, open interest roughly across, like, BTC, ETH, and SOL in the market right now is roughly a $110,000,000,000, and the interest rate is actually slightly higher than, like, lending rates that you see within DeFi. So if we're trying to express this as a sort of what's the gross cash flow opportunity or, like, the amount of revenue that you could possibly fit into a stable coin using these sources. I think the back of the envelope, in
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