Welcome to DeFi Frontier.

Every week, I highlight the DeFi opportunities, protocols, and market themes I think are worth paying attention to.

Sometimes that means sustainable yield opportunities. Sometimes it means new protocols, best practices, risk frameworks, or broader trends shaping where capital is moving onchain.

The goal is simple: help you find what’s interesting in DeFi, understand the tradeoffs, and avoid blindly chasing the biggest APY on the screen.

Let’s get into this week’s report.

7 day benchmark stablecoin rates from Portals: 2.77%:

Here’s the top yielding stablecoin vaults (real yields) for the past 30 days:

Checking in on Stablewatch to see the 7-day TVL changes.

This week the top movers were: OpenTrade (XDFIS) +76.4%, Cap (stcUSD) + 21.9%, OpenTrade (xSLP) +14.3%:

7 day benchmark ETH staking rates from Portals: 2.24%

Here’s the top yielding ETH vaults (real yields) for the past 30 days:

When I first heard of Yield Basis and had it explained to me, I thought it was really interesting. I still do, but just have lost track a bit with it so wanted to take another look to see what they’ve been up to.

As a refresher, what is Yield Basis?

YB offers 4 active markets cbBTC, wBTC, tBTC and wETH. Their BTC pools have become large sources of onchain liquidity with cbBTC being largest, wBTC second and tBTC fourth as shown below:

What do the yields look like?

As you can see, the yields are pretty solid. ~6% on ETH and ~4%+ on BTC is very good. However, if you’re curious about the difference between FT APY and Token APR, there’s basically two ways you can receive your yield with YB:

Is it working?

From my understanding many of these markets have been filled (or close to) since the time the protocol was deployed in September and throughout protocol updates from their initial version in September, version two in November, and version three in May. Every version seems to have brought with it more stability to LPs and improved efficiency.

It did not come out of the gates in perfect form, but appears that further iterations have helped hone things in. If you want to see the more recent changes brought forth in v3 check this post out here.

Capacity is starting to open up as the YB team finds ways to further scale the protocol.

I reached out to the team and got a bit of an update on their scaling plans:

If you want to get a bit more in the weeds, these are two great resources:

Instead of a massive selloff, BTC actually ticked up on the latest Saylor news this week.

I thought Will’s comments summed things up very well:

I also liked Parker’s perspective from Apyx:

We’ve been talking a lot about this USD duration number week after week as the most important number for Strategy. Saylor continues to boost this number, last week it was 2.1 yrs now its up to 2.3 yrs:

These latest activities are really translating to better STRC performance as it’s now back to $92.50. This is the strongest its been since mid June:

When things went bad for STRC and the onchain STRC derivatives, we made an intentional decision not to abandon our coverage. I still think STRC is a fascinating new financial product. I absolutely think mistakes were made in how it was sold to the public, but I also think the story here is far from over.

Since we’ve been covering STRC through both the good times and the bad, we’ve become fairly in tune with when sentiment and market conditions are starting to shift. After following the STRC slide over the past few months, we noted that a bottom appeared to be forming for some of these onchain products. In last week’s report, we pointed out that outflows had slowed and things looked to be rebounding. Total TVL is sort of teetering around the $640M - $650M range.

Here’s the latest update.

The total TVL between STRCx (by xStocks) Saturn and APYX this week is $644.27M ($654.27M last week):

Here's the Aug 3 movement update:

I really think these onchain products are starting to look interesting here. I haven’t dipped into any yet, but even since last week, the picture is getting clearer how STRC could get back to $100. I was still pretty skeptical about this happening anytime soon even last week:

By the time this report goes live, we should have just released (or soon to release) a podcast with Parker who is one of the contributors to Apyx 👀

The Term Labs team was part of a small handful of pioneers that brought fixed rates onchain early. Now they’re back, and they’ve converged on a similar line of thinking as Morpho around what held their first iteration back.

In this new setup, while a bid is waiting to be matched, it doesn’t sit idle and unproductive. Instead it acts as productive capital until matching happens. This ultimately lowers the opportunity cost of trying to get into a fixed rate.

I plan on doing a bit of a deeper dive on Term v2 at some point when its more fully ramped up, but for now, the two new features are:

Order Markets are the new flagship fixed markets. If you scroll the list there’s currently maturities going out to December 10th:

With Carry, you can now loop using a fixed rate directly in the Term app:

I personally think fixed rates will supercharge looping once fixed rates get more mature/established.

As I said, I’ll take another look at Term once it’s further along to see how things are going.

I saw this and thought it just perfectly articulates something I’ve thought but hadn’t been able to put into words. Tech and finance are very different worlds and move at totally different speeds:

Hoeem is writing some of the most useful content for anyone trying to stay close to the bleeding edge of AI tooling.

Sometimes I read some of the other AI content out there and its in a tone of “if you’re not doing these things, you will be left behind and stuck in the permanent underclass for all eternity”. With a lot of these pieces form Hoeem they seem much more approachable and realistic to work into my daily life:

This is cool too. Agents and DeFi is a matter “when” not “if” IMO. That’s why I’m always interested in these sort of tests. Basically Dialectic has been running 8 models against one another and seeing who can do the best at managing a DeFi portfolio:

Their dashboard is here if you want to take a closer look. I’m not interested in the results today, more asking myself “are the guardrails working” and “what could this look like another year from now?”

Taking a look at the front page of Stablecoin yields and RWA yields this week on Pendle:

Stablecoins

RWA

Thanks for reading!

DISCLAIMER: Nothing written in The Edge Newsletter or said on The Edge Podcast is a recommendation to buy or sell tokens or securities. This content is for educational and entertainment purposes only. Nothing shared here is financial advice. Any views expressed in our content are solely the opinion of that writer, host, or guest. Always do your own research. DeFi Dad, Nomatic, and guests may have positions in the assets or other matters discussed in this content.