I’ve been thinking about what happens to DeFi when government debt yields 5-6%. If you can earn roughly 5% on short-term government bonds, earning 4-5% in DeFi while taking on significantly more risk starts to look fairly unattractive. If the baseline interest rate in the economy is 5%, then DeFi yields need to start at 5% and offer something additional to compensate for the extra risk. Otherwise, why bother? I suspect the answer is that DeFi increasingly needs to integrate traditional yield-bearing assets. By bringing government debt onchain, DeFi can establish a baseline yield that moves with interest rates in the broader economy. Additional DeFi yield can then be layered on top, with the associated risks. A 5% starting point with the potential to earn 10%+ is a much more compelling proposition. I think this is why tokenizing RWAs is so important.