The Weekly: DeFi Yield Is Back!

Weekly Summary

We cover:

• Why DeFi yield is making a comeback

• Three markets signalling stronger leverage demand

DeFi Yield Is Back!

The last few months told a familiar story: yields compressed, headlines declared the trade dead, capital drifted to T-bills. That narrative is now out of date.

Across three corners of the market — private credit, Ethena's stablecoin complex, and tokenised equity perps — the demand signals are pointing the same way.

Leverage demand is rising, and where there's leverage demand, there's yield.

These are three examples among many. Together, they illustrate a broader trend emerging across on-chain markets.

Private Credit

SyrupUSDC utilisation has sat near 97–99% since late April and hasn’t left. Lenders are fully deployed.

Against that backdrop, trailing XIRR rose from below 4.4% in April to around 4.9% three months later.

That combination matters because, at this level of utilisation, the pool sits on the steep part of the rate curve.

With no idle liquidity to absorb new borrow demand, even small increases in borrowing or declines in supply drive rates sharply higher.

The yield trending higher off a near-maxed pool tells you demand is firming, and the rate has room to climb from here. The pool isn't having to compete for borrowers.

Stablecoin Complexes

Borrow rates are a demand signal and we’re seeing that with Ethena assets. USDe borrow costs on Aave are climbing, and the primary reason to pay these rates is to loop sUSDe.

Rising borrow means the bid for that trade is alive and growing.

That’s the opposite of a dead-yield market. When yields are actually dead, borrow rates fall and utilisation collapses because nobody wants leverage.

Right now we have the reverse: demand for leverage is rising, not fading.

Stocks and Perpetuals

The clearest yield of the three is sitting in tokenised equity perps.

Annualised funding on Hyperliquid stock markets is running hot — LITE, AVGO and ZM current funding above 40%, and a broad set of names (AMZN, COIN, ORCL, META, SPCX) holding double-digit annualised rates across weekly and monthly windows.

Positive funding means longs are paying shorts. That’s harvestable: short the perp, buy the underlying, and collect the funding rate as carry while staying delta-neutral.

When funding holds at these levels across a basket rather than a single name, it stops being noise and starts being a repeatable yield strategy.

The Bottom Line

The common thread is simple: leverage demand is returning.

Private credit is repricing higher, borrow demand for sUSDe is strengthening, and tokenised equity perps are generating attractive funding carry. These are all signs that users are once again willing to pay for on-chain leverage.

The narrative has been that DeFi yield is dead. The data suggest otherwise. As leverage demand continues to build, we expect yield opportunities to broaden and improve.

State of Yields

Stablecoin lending yields:

• ~4.04% on Aave (USDC) — 70bps higher than last week.

• ~3.26% on Aave (USDe) — utilisation at ~54%. Slightly higher utilisation vs. last week.

Fixed-rate DeFi lending: yield premium in fixed markets marginally expanding from last week:

• Pendle sUSDAi: ~9.62% (Oct–Feb 2026 maturities)

• sUSDe: ~4.2% - 30bps higher than last week

ETH yield benchmarks:

• Lido staking: ~2.17% - slight increase from last week.

About Re7

Re7 Capital is a research-driven digital asset investment firm specialising in DeFi yield and liquid alpha strategies.

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