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DeFi stablecoin yield pattern transformation: institutions get on board to lead new trends
The yield landscape of DeFi stablecoins is undergoing profound changes.
As the DeFi ecosystem matures, a more resilient environment that aligns better with institutions is emerging, marking a significant shift in the nature of on-chain yields. Institutional interest in on-chain infrastructure is steadily growing, despite nominal yield adjustments. Protocols like Aave, Morpho, and Euler are attracting increasing attention and usage. Institutional participation is driven more by the unique advantages of composable and transparent financial infrastructure rather than solely pursuing the highest yields.
The Trend of Institutions Adopting Decentralized Finance
As of June 2025, the TVL of major collateral lending platforms exceeds $50 billion. The 30-day borrowing yield of USDC is between 4% and 9%, overall higher than the 3-month U.S. Treasury yield during the same period. Institutional capital is exploring and integrating these DeFi protocols, valuing their unique advantages: around-the-clock global markets, composable smart contracts, and higher capital efficiency.
A new type of "crypto-native" asset management company is emerging, such as Re7, Gauntlet, and Steakhouse Financial. Since January 2025, on-chain capital in this field has grown from about $1 billion to over $4 billion. These companies are actively adjusting the risk parameters of DeFi protocols, striving to become the leading asset management firms of the new generation.
The regulatory attitude is also changing, and DeFi infrastructure is becoming increasingly mature. Institutions are beginning to view DeFi as a complementary financial layer rather than a disruptive field. The permissioned markets built on Euler, Morpho, and Aave reflect positive efforts to meet institutional demands.
Development of DeFi Infrastructure
The most significant progress in the DeFi sector is focused on infrastructure development:
Collateralized Lending: Morpho and Euler are transitioning to modular and isolated lending markets. Morpho has launched fully modular lending primitives, and Euler v2 supports isolated lending pairs.
Tokenization of RWA: Bringing traditional asset yields such as U.S. Treasury bonds onto the blockchain. On-chain U.S. Treasury bonds grew from $4 billion at the beginning of 2025 to over $7 billion.
Tokenization strategy: including Delta neutral and yield-generating stablecoins. For example, Ethena's sUSDe generates profits through "cash and arbitrage" trading, with some yield-generating stablecoins yielding over 8%.
Yield Trading Market: Protocols like Pendle allow yield-bearing assets to be tokenized into principal tokens and yield tokens. Pendle's TVL exceeds 4 billion USD.
These infrastructures provide services for fintech companies, custodians, and DAOs, building a new generation of Decentralized Finance stack.
Composability Amplifies Returns
The composability of DeFi makes the aforementioned primitives the cornerstone for building complex strategies:
Yield asset lending market: Tokenized RWA or strategy tokens can serve as collateral for a new type of lending market.
Diversified income source integration: Incorporating other areas of DeFi into the stablecoin strategy, such as Delta neutral strategy.
Leverage yield strategy: Similar to traditional arbitrage trading, it amplifies the basic yield through a cycle of borrowing and lending.
Stablecoin liquidity pool: Provide liquidity in AMMs like Curve to earn fees.
Yield aggregator: Automatically executes harvesting rewards, compounding, and other processes to enhance annual yield.
The overall trend is to provide users with diversified stablecoin returns under established risk parameters, and to simplify operations through smart accounts.
User Behavior Changes
Data shows that users' fund allocation is driven not only by the highest APY but also weighs factors such as reliability, predictability, and overall user experience. Platforms that simplify interactions, reduce friction, and build trust are more likely to retain users in the long term.
Capital prefers stability and trust: During market fluctuations, funds often flow to mature "blue chip" protocols, even if the yields are lower. Protocol loyalty is also very important, as users tend to stick with familiar ecosystems.
Improved user experience enhances retention: Gasless, seamless, and automated products are becoming increasingly popular. Features based on account abstraction, such as gasless transactions, are driving higher capital retention rates.
Cross-Chain Yield Differences and Capital Flow
There are significant differences in stablecoin yields across different blockchain networks. As of June 2025, the average lending yield on Ethereum is about 4.8%, while Polygon reaches as high as 5.6%.
Automated Routing: Applications and aggregator protocols possess cross-chain fund routing capabilities to achieve higher returns with minimal intervention.
Intent-Centered UX: Wallets and dApps provide simple options like "maximum yield" that automatically meet user intent.
Capital allocators use cross-chain yield analysis to optimize stablecoin strategies, improve fund management, and identify arbitrage opportunities.
New Model for Monetizing DeFi Earnings
Fintech companies and new banks are integrating DeFi as backend infrastructure into the user experience, with primary monetization methods including:
Stablecoin yield integration: directly provide stablecoin yields within the application, promoting deposit growth and user stickiness. Such as the yield products of Coinbase, PayPal, and Bitget wallets.
Cryptocurrency collateralized lending: Providing non-custodial crypto asset collateralized loans through DeFi protocols. For example, the integration of Coinbase with Morpho.
Consumer Yield Products: Integrating DeFi yields into consumer-facing financial products, such as yield-backed debit cards, automatic yield wallets, etc.
A platform that can simplify complexity, reduce friction, and leverage the flexibility of Decentralized Finance will lead the next wave of stablecoin monetization and user participation.
Conclusion
The next stage of DeFi yields is breaking away from early speculative frenzy, showing the following trends:
The successful platforms of the future will not only offer high returns but also create sustainable value-added financial infrastructure. The focus is shifting from short-term excess returns to long-term value creation.