Welcome to Yields of the Week.

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: 2.38%:

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: Inverse (sDOLA) +15.9%, Origin (OUSD) +15.9%, Maple (syrupUSDT) + 4.29%:

7 day benchmark ETH staking rates from Portals: 2.85%

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

I’d been meaning to take a closer look at Flex…

As I type this maxed out yields at a low interest rate are up to 23.73% APY

Flex is a decentralized money market where borrowers choose their own fixed interest rates instead of taking a variable rate from the protocol.

The simple way I think about it is this: borrowers get more predictable costs, and lenders get a way to earn yield while still having a path to exit when they want liquidity.

The main mechanism here is redemptions. If lenders want out and there is not enough idle cash available, the system can redeem against borrower debt to free up liquidity. So instead of rates constantly moving around based on utilization, Flex uses borrower chosen rates and redemptions to keep the market moving.

Most DeFi lending still runs on variable rates. That works fine until borrow demand spikes and rates start moving fast.

That can be annoying if you are trying to plan around your cost of capital.

Flex is interesting because it takes the redemption idea from Liquity V2 and applies it to a broader lending market. Instead of everyone paying the same protocol set rate, borrowers choose what they are willing to pay to make their loan safer from redemptions.

The simple version: the more you pay, the less likely you are to be redeemed first.

That mechanism is interesting, but I think the bigger part is what it unlocks for loopers. Flex gives borrowers more control over the tradeoff they are making, instead of forcing everyone into the same rate model.

That is the part I care about most. Rates become a tool for managing your position, not just a number the protocol hands you.

Lenders earn from a few different places:

Fixed interest: Borrowers choose the rate they are willing to pay, and that interest goes to lenders.

Upfront fees: Borrowers also pay a fee when they open or increase a loan. That fee is equal to one week of the market’s average interest rate.

Liquidation surplus: If a borrower gets liquidated and there is extra collateral left over after the debt is repaid, that surplus goes back to lenders.

These earnings flow into a tokenized Lender Vault, which should increase in value over time as interest, fees, and liquidation surplus come in.

Redemption risk: This is probably the main thing borrowers need to understand. If lenders want to exit and there is not enough idle cash, part of your collateral can be sold to repay your loan earlier than you expected.

Dutch auction risk: Redemptions use Dutch auctions to sell collateral. The price drops until a buyer steps in, which means borrowers do not fully control the exit price.

Bad debt or shared loss: If collateral falls below the value of the debt, that shortfall gets shared across lenders.

Liquidation risk: Like any lending market, if your collateral drops too much, your position can be liquidated. However these are soft liquidations to bring your position back into health.

Fees: Lenders also need to remember there is a 10% performance fee paid to the protocol.

Flex is a pretty interesting twist on the normal Aave style lending model.

For borrowers, the trade off is pretty clear. You get a fixed rate, but you also accept the risk that your loan can be closed early through redemptions.

For lenders, the yield is a little more interesting than just earning the borrow rate. You are also getting exposure to upfront fees and liquidation surplus, which gives the vault a few different ways to grow.

Looping is where Flex really shines IMO. No more utilization rates spiking and putting your looped positions into negative carry. You know your rate and you can plan your yield better.

as with all newer DeFi things it will be interesting to see how it all performs under times of market stress or panic.

On the UI there is a tab dedicated to Looping. They automate a lot here and make it extremely easy to get into a leverage loop position.

I’m just playing around with an example position that you can see below. This takes $20000 of yvUSD collateral and I’ve gone with max 10.8 leverage. I’d look into this more if this was a real position, but one cool thing as I mentioned above is that they only do partial liquidations to bring you back into health. I’ve personally set my interest rate at 3.5% to allow $398k of redeemable USDC before I am in jeopardy of being redeemed. I could probably be more aggressive and get a higher APY here, but this seemed a bit more conservative.

This setup would yield a 15.89% APY, which is by no means the highest yield you can find in DeFi. But the fixed rate component makes it feel much more durable, and potentially something you could actually plan around within your portfolio. Also there is the added benefit of not having to manually wind up the leverage yourself and incur heavy slippage.

One interesting tidbit I picked up in the 5 min video below from Corn is that you can actually change your interest rate once per week if you want to.

That’s great because it means you don’t have to sit on a stale rate. You can keep adjusting up or down to get closer to the redemption zone, while still keeping whatever safety buffer makes sense for you.

I thought this post was helpful too:

Ethan DeFi posted something this week that stuck with me. He says he runs all his stablecoin loops at maximum leverage, and I can understand his logic. When a stablecoin depegs, he says, it usually goes well past 4 to 5%. At that point 7x and 10x both get liquidated, so you may as well take the extra yield. He adds that with a hardcoded oracle the team often covers small losses, so a tiny wobble costs him nothing.

I like when I read something that sort of seems a bit counterintuitive to my own thinking. I don’t do a lot of looping (however I might with the rise of more fixed rate protocols) so I defer to someone who’s doing this in practice more than myself, but I wanted to look into this a bit deeper.

So I pulled the full depeg history for USDS, Sky's dollar and one of the more credible names in the category, off Pharos. There were 40 recorded events, where Pharos flags anything more than 1% off peg.

I think the first thing that jumped out here is 40 is a way bigger number than I would have thought for USDS. Intuitively I would have thought they would have less than 10 depegs in their roughly 2+ years the data goes back. I just feel like I don’t hear about a lot of these.

Here’s what that data looks like:

I had my assistant Claude break down the data into more useable context for our purposes:

Time Duration

For USDS at least, the depegs were mostly pretty small, and they usually did not last long.

Three out of four stayed under 2%. The typical one barely got past 1%. And most were back on peg within an hour or two.

The average duration looks a lot scarier at over nine hours, but that is mostly because of three weird multi day events. Take those out, and the average drops back under two and a half hours.

I think that is useful context when thinking about the actual risk here.

A rare 5% break is the kind of event where leverage almost does not matter, because you are probably cooked either way (as Ethan talks about). But the much more common 1% or 2% wobble is where leverage really can decide the outcome.

With a market price oracle, that is exactly where 10x turns something survivable into a liquidation. With a hardcoded oracle, you are fine until the break is real and lasting. But if that happens, your size becomes a huge part of the problem.

One more detail I think matters: USDS has now held peg for 511 straight days. But even still you have to be prepared for wobbles.

So after looking at the data, a lot of these depegs on USDS at least are fairly short lived and I can see where you’d be fine in many cases with a hard coded oracle.

However, I’m not sure I love the idea of hanging hopes on teams bailing you out on small depegs. Granted, Ethan says “diversification is key though and I generally try to allocate less than 10% of my capital to a single loop.”

Personally, I will be going to Pharos, before any looping in the future and just looking at some depeg data. It’s no silver bullet, but it at least helps you make a more educated guess on stablecoin pairs that have decent history.

Probably once per month I always come back to Noon as one of the best examples of long lasting high DeFi yield.

They’ve consistently had 10 - 12% yields going all the way back into 2025while being incident free through one of the most tumultuous times in DeFi in recent memory:

The yields have dropped slightly this past few weeks due to their TVL increasing a bit more rapidly through this period. However their 28D APY is still 10.64%:

Here’s some great resources on Noon:

📽 Podcast: Why Private Credit Is Moving Onchain, And What DeFi Gets Right And Wrong About It

📽 Podcast: One Stablecoin Yield Outperforming DeFi’s Biggest Names By 50 - 100%

✍ Blog: What is Noon’s Private Credit Exposure, Actually?

I don’t usually mess with concentrated liquidity setups as I’m either not smart enough or haven’t spent the time to really get the hang of it. However, many friends in TG groups do like to use these Uni V3 style pools. Especially for memes, or in this case volatile high volume tokens like SpaceX 👀

Merchant Moe has a bit of a different spin on Uni V3 and they use something they call “Liquidity Book”.

Here’s a primer from their docs:

But why am I going into such detail? Well every once in a while some really nice opportunities show up and I feel like I don’t cover some of these more degen yield setups as much these days.

However, the SpaceX launch created some really interesting fee/reward opportunities. I was keeping a eye on this pool and it was doing anywhere from 2000% - 10,000% APY in fees/rewards shortly after the historic IPO and over the weekend.

The Mantle team have been heavily incentivizing this with MNT tokens.

I know some people who have a lot of success with these types of setups and view them like more of a short term trade.

Also…

Meaning, I bet one could be positioned early and run back the same trade and scoop a lot of rewards and fees 👀

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

Stablecoins

RWA

The total TVL between STRCx (by xStocks) Saturn and APYX this week is $749.65M ($756.45 last week)

Updated. Movement since June 10:

What stands out to me is the major surge in yield from Saturn - going up to 18.25%.

Another thing that caught my eye is the Apyx team put out their Apyx 2.0 piece outlining many operational changes they are making to the protocol:

As I’m typing this on June 16th, STRC is trading at 92.65 after hours. The June 15 ex-dividend date came and went and wasn’t able to get things back to peg. I will be keeping a close eye on how this plays out.

That’s all for this week, 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.