Decentralized finance is making a surprise comeback, as the latest cryptocurrency rally spreads to the sector that has struggled with growth since last year’s high-profile collapses and a jump in interest rates in traditional markets. Interest rates to borrow stablecoins meant to track the US dollar, such as USDC and Tether, have surged to more than 10% on Aave, the largest lender among DeFi projects that allow peer-to-peer cryptocurrency transactions without middlemen. A higher interest rate means that more traders are willing to pay up to borrow the stablecoins, a sign that they are levering up their crypto bets. For months, the rates had been depressed as DeFi’s once lofty returns were nowhere to be found amid decades-high yields in the traditional bond market.
DeFi Rates Signal Rising Leverage in Crypto as Ripple (XRP) Leads Alt-Coin Rally
