Borrowing USDC against Coinbase Tokenized Stocks is now possible on a dedicated @aave V4 instance on @base. Coinbase Tokenized Stocks Spoke on @aave v4 lets users deposit stocks issued by @coinbase (AAPLc, AMZNc, GOOGLc, METAc, MSFTc, NVDAc, TSLAc) as collateral and borrow @circle USDC against them. This allows users to keep their exposure to the stock without selling it while unlocking liquidity that can then be reinvested in other assets or spent, increasing capital efficiency. Aave loans have no fixed term so users only need to keep a healthy LTV to avoid liquidation and they can repay the loan whenever they want. In TradFi, borrowing against a stock portfolio means having access to a margin account that takes time and comes with account approvals, minimum balances requirements, and other broker terms Aave v4 Coinbase Tokenized Stocks Instance reduces the complexity of this type of operation, opens access to more capital efficency, while leveraging onchain rails. At the same time, it brings more borrow demand for onchain assets that can pay a yield to users that want to provide liquidity to this market.

Aave V4 is live on @arc, @circle's L1 for real-world financial flows. One Core Hub and two spokes are available at launch on @aave: - Main Spoke: bluechip collateral (cirBTC, WETH) to borrow stablecoins (USDC, EURC) - Forex Spoke: USDC and EURC for stablecoin forex arbitrage

Aave v3 deposits have surpassed $30B and borrows $12B, the highest since May. A key driver are liquid staking tokens deposited as collateral, up from $4.5B to $6.5B over the last 90 days, making Aave the prime destination for LSTs across all DeFi. @ether_fi weETH collateral on @aave now sits above $3.3B and @LidoFinance wstETH above $3.2B.

Currently @ether_fi Cash @aave v4 instance has $11M in deposits, $1.3M in borrows. Most used deposits/collateral are: - USDC (45%) - Liquid ETH (17%) - Liquid USD (12%) - Staked ETHFI (8%).

Today @ether_fi announced a new borrow feature, built on top of @aave v4 on @Optimism, allowing users to borrow against tokenized stocks, metals and other assets. Check our article to understand the details.

The ETH staking rate is not isolated inside the validator system. It is one of the core rates used to price DeFi. Lower the staking rate and the whole market adjusts: .ETH borrow demand falls .Collateral becomes less productive .Stablecoin loans become more expensive in real terms .Stablecoin lenders earn less This proposal does not model DeFi at all. And the timing could not be worse. Institutions are moving on-chain because yields are becoming competitive. Now the EF is proposing to cut one of DeFi’s core rates, making on-chain yields less attractive just as the market is starting to grow. This EIP focuses only on validators and it does not consider the economy built on top of them.

Lending protocols are showing good momentum since early June, with borrow books increasing week over week across the major protocols, +$2.5B in total. @aave leads in terms of borrow book growth (+$1.38B), more than all the other lending protocols combined (+$1.15B).

After the discussion in the tweet below, Morpho now surfaces donations to vaults in the UI as an incentive. Vaults receiving direct donations show an "Includes donations" tag, saying that part of the yield comes from assets paid directly into the vault's underlying asset, which can push the APY above the market rate. Related to this it's worth looking at the Coinbase Earn and Robinhood Earn products and where the yield comes from. Both products route user deposits into Morpho vaults: - Coinbase to Steakhouse High Yield USDC Edition on Base - Robinhood to Steakhouse USDG on Robinhood Chain In both cases the yield the user ends up seeing comes from different sources: i) vault level incentive, ii) market level incentive, iii) market native yield. The first one is a Merkl campaign running on the vault supply side that tops the rate up to the advertised number, showing 5.4% APR on the Coinbase App and 6.99% APR on the Robinhood App. The second one sits at the market level that the vaults deploy to. USDe collateral deposits are being paid around 4.5% on both markets, on the USDe/USDC market on Base ($245M supplied and $211M borrowed) and on the USDe/USDG market on Robinhood Chain ($136M supplied and $90M borrowed). Rather than paying the lenders directly, the incentive pays the users who deposit collateral, and those users then borrow the stablecoin against it and loop the position back in, which is what creates the borrow demand, pushes utilization up, and produces the yield the vault passes along to depositors. A handful of loopers account for most of the collateral, running roughly 9x leverage, meaning the supply figures are mostly looped capital. At the vault level, it appears as organic yield even though it is indirectly subsidised at the market level. The 4.5% paid on collateral in USDe sits above sUSDe's own native yield of around 4%, and it currently produces 3.99% of vault yield on Base and 2.86% on Robinhood Chain. Together with the vault-level campaigns on both consumer vaults, the structure runs at roughly $683k a week, close to 30% of all spend across Merkl's top 40 campaigns. A note that Coinbase Earn also allows depositing to a vault that allocates mostly to cbBTC/USDC, the market behind Coinbase's onchain loans product, where borrow demand comes from real users borrowing USDC against cbBTC, that portion of the yield is native. Also worth noting that Ethena itself (as disclosed on its transparency dashboard), supplies stablecoins into both of these markets through two vaults Ethena x Steakhouse USDC on Base and Ethena x Steakhouse USDG on Robinhood. Which brings the question back to where it started. An incentive that sits on the collateral of the underlying market, and its entire purpose is to generate the yield the vault reports (that is mostly incentivised yield). Should that be surfaced on the vaults UI but also in the Coinbase and Robinhood apps?

Savings GHO (sGHO) by Aave currently pays a higher yield than sUSDS, and more than every Spark Savings product as well. Last week Sky cut its Savings Rate (sUSDS) from 3.60% to 3.52%. Back in February the rate stood at 4% and after several consecutive cuts it now sits at 3.52%. Spark Savings products also have been cutting the rates in the last months. Current rates: → sGHO: 4.25% → sUSDS (Sky): 3.52% → Spark Savings (USDC/USDT/USDS/PYUSD): 2.75% to 3.52% sGHO is currently paying 73bps above sUSDS. GHO is Aave's native stablecoin, over-collateralized by assets held inside the protocol. Savings GHO can be redeemed for GHO at any time, with no minimum deposit required. It provides a savings rate automatically, paid out in GHO, funded by two sources: - interest paid by GHO borrowers, and - yield earned on the stablecoin reserves that back GHO

The SEC published a statement on crypto vaults and onchain lending strategies and the main takeaway is that moving activity onchain doesn't exempt it from securities law. This raises the compliance bar for anyone running curated vaults or lending strategies. Fewer crypto-native curators can absorb that cost, which reduces fragmentation as barriers to entry rise. It structurally favors TradFi-native curators who already operate inside SEC compliance.

Aave v4 is very close to reaching $300M in deposits, almost doubling the amount in the last month. Deposits asset category are composed by: - 40% stables - 22% Bitcoin assets - 17% ETH liquid staking assets - 4% Pendle PT assets - 2% Gold assets Deposits split per Spone is: - 65% Main Spoke - 10% Bluechip Spoke - 9% Etherfi Spoke - 6.5% USDG Pendle Spoke

Aave V3 core market increased ~$1B in deposits and $487M in borrows over the last 7 days. Five assets are driving deposit growth: → WETH +$322M → USDT +$279M → USDe +$260M → wstETH +$160M → weETH +$125M Borrows are led by WETH (+$186M) and USDT (+$193M). wstETH is the largest collateral in DeFi, with $5.7B deposited across lending protocols. Aave wstETH deposits are now ~$2B and up $180M this week, while SparkLend fell $99.65M Aave also added $128M in weETH deposits in the last 7D, over 6x the next-largest protocol for this asset. These LSTs deposits naturally translate into borrows and revenue for the protocol, as these assets are typically used as collateral to borrow WETH or, to a smaller extent, stablecoins.

Steakhouse's EURCV Prime vault is intriguing. UI shows 4% APY, 0% incentives, but ~78% of the $100M deposits are sitting idle. The remaining allocation earns closer to ~1.3-1.4%. Blended organic yield is actually ~0.3%. So where does the yield come from? The vault's holding address has received ~546,100 EURCV across 22 transfers since Feb, roughly weekly, all from the same sender. Mechanically, it's a straight ERC-4626 donation: sending assets directly into the vault raises totalAssets without minting new shares, so every depositor's share value rises. The address donating also manages Merkl incentives on Steakhouse x AUSD vaults, suggesting this is Steakhouse related address and this likely reads as SG-Forge/Steakhouse incentivising yield to bootstrap the markets while there is no EURCV borrow demand, which is a normal practice. The issue isn't the incentive, it's not disclosing it in the UI. Two things matter for depositors: - The advertised 4% isn't organic, it's incentivised, with no visible schedule or end date. If transfers stop, APY reverts toward the ~0.3% blended rate. - It's invisible on every dashboard depositors actually check, so new entrants can't price the risk. This doesn't seem malicious, Steakhouse are a serious, established player in the space. But the mechanism itself could be used maliciously by less scrupulous curators/protocols, and undisclosed direct-transfer subsidies aren't great practice regardless of intent.

The ones with the most negative revenue correlation with other categories are RWAs, Prediction Markets, and Physical TCG. A new revenue class in crypto is forming irrespective of how others perform.

The Morpho x Robinhood deal is strange for an outside observer. Most of Morpho's growth and TVL has been driven by Coinbase. Coinbase is an investor in Morpho, gave it preference on their onchain products, and that's a big part of how the protocol scaled. That growth is what allowed Morpho to negotiate bigger BD deals including Robinhood. Robinhood is one of Coinbase's main competitors. Robinhood chose to build its onchain product on a protocol that's economically and intrinsically tied to its competitor. This is odd because: 1) It makes it harder to differentiate the offer from a technical perspective (besides with incentives). 2) It creates a risk vector between the companies. Isolated markets and separate chains limit direct financial contagion but they don't isolate reputation. If there's a bank run or liquidity crunch on either side, users won't distinguish between "Robinhood's Morpho markets" and "Coinbase's Morpho markets." Also, Robinhood's markets are curated by Steakhouse, one of the biggest Morpho curators and one of the same curators active across Coinbase-linked Morpho markets. A curator stress event damages confidence in every market they curate, on both sides. The obvious defense is that Morpho is just the neutral infrastructure, but in this case there’s no neutrality since Morpho is subsidizing a competitor growth. Robinhood is advertising a 7% yield that is largely subsidized by Morpho. In other words, Morpho is subsidizing a product that directly competes with a Coinbase product. And to add to all this, in Morpho's latest funding round which likely funds growth campaigns like this, Coinbase Ventures is not listed as an investor, though they were a previous known backer. Curious on what Coinbase does in response: → Do they launch their own DeFi lending market and compete with Morpho? Coinbase has past examples of shipping products that cannibalize partners. → Do they drop Morpho's exclusivity on Coinbase onchain products and open up to other lending markets?

Two new lending markets launched this week. → Aave on Monad: $116M deposits, $48M borrows. Most stablecoin deposits earn ~6.7% APY, partly subsidized by Monad. → Morpho on Robinhood Chain: $11.4M deposits, $10.3M borrows across isolated markets. The Steakhouse USDG vault backing it holds $15M total ($4M idle). Native vault APY sits at 1.72%; the delta to the 7% advertised (5.28%) will be subsidized by Morpho.

Aave V4 is accelerating in the last 30D. → Deposits: $119M → +$230M (~1.9x MoM) → Borrows: $33M → +$75M (~2.3x MoM) @global_dollar Hub launch on @aave v4 on June 30 was the single biggest day for deposit and borrow inflows since launch.