ETH rates stayed pretty stable across DeFi. The Lido stETH rate is still sitting steady at ~5.5%. Interestingly, this now puts the ETH/stETH Curve/Convex stake rate solidly below the native stETH rate at only ~5%. That Convex pool hasn't seen a marked increase in TVL, more likely this is the result of a flagging LDO price as that pool is heavily reliant on LDO Incentives.
This is something to keep an eye on - robust ETH/stETH liquidity is critical for Lido's current dominance in liquid staking game. If providing ETH/stETH liquidity is a persistently poorer economic opportunity than just staking outright I would expect either that liquidity to decline or for Lido to up its incentives. I've been wrong before however - Curve liquidity is some of the stickiest capital in the system, right up there with Aave deposits.
In stablecoin rates, USDC supply on Aave Optimism got absolutely destroyed week over week falling by roughly half. It looks like OP incentives stopped flowing last week and farmers unwound their recursive USDC lending positions - Optimism had been incentivizing both the borrow side and the supply side of the Aave markets so farmers were levered lending like it was 2020. This would explain why why the USDC supply rate fell so dramatically despite the total USDC supply decreasing by almost 50%.
An interesting thing to note though is that you didn't see an equivalent drop in ETH TVL on Aave Optimism even though the same levered lending opportunity was available to ETH holders as well as USDC holders. I think there's two reasons for this.
First, the yield probably wasn't high enough. Purely economically driven actors had better things to do with their ETH. Second, the composition of stablecoin farmers vs ETH farmers is quite different. In general, the more professional players who are purely focused on maximizing their gains tend to operate in stablecoins more than ETH. Most DeFi yield funds are based in USD and need to generate returns on stables. ETH farmers tend not to be quite so ruthless.
Lastly, ETH rates on Notional are starting to heat up on Notional ahead of the launch of our first ETH leveraged vault in Mainnet beta later this week. Keep an eye on those yields!
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