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The U.S. Federal Reserve raised its benchmark rate by 25 basis points to 3.75%-4.00% on Sept. 16, but DeFi stablecoin deposit yields may not rise in tandem, CryptoSlate said in an analysis.
On the same date, the one-year U.S. Treasury yield climbed to 4.45%, raising the benchmark for comparing returns on crypto deposits. According to CoinMetrics, Aave’s USDC deposit yield this year averaged 31 basis points below the one-year U.S. Treasury yield and trailed it during 78% of the period surveyed.
Anthony DiMartino, co-founder of Sentora, said the correlation between SOFR, a U.S. short-term interest rate benchmark, and CDOR, an on-chain borrowing rate indicator, is very low, indicating the Fed’s rate hike is unlikely to significantly push up on-chain rates. DiMartino added DeFi deposit yields are driven more by lending demand in the crypto market and deleveraging than by monetary policy.