Even though the decentralized finance industry is still growing by leaps and bounds, not everything is going according to plan. The overall interest paid out per year from lending protocols has created in recent weeks. Currently, it sits at $41.3 million, down from over $106 million.
DeFi Lending Interest Drops off
It should not come as too big of a surprise to see a decrease in DeFi lending interest, Its most recent rate of growth from late June onward was not sustainable. Going from $2.224 million in interest a year to $106.84 million is a very steep difference. Some sort of a dip had to take place sooner or later. Statistics are provided by DeFiPulse.
This big drop off, however, may worry a lot of DeFi enthusiasts. Going from that $106.8 million down to $41.3 million in the span of three days isn’t looking that great. It shows that most people are less interested in earning interest, and they have shifted their attention to yield farming.
When exploring the yield farming option, any funds normally issued for loans are used for very different purposes. This will also have an impact on the amount of money one can access for crypto lending and borrowing purposes now, or in the future.
Borrow Rates are all Over the Place
In line with the interest rate decline, rates for borrowing money through DeFi platforms are also trending down a bit. The biggest drop off can be noted in the form of Compound’s borrow rates, which currently sit at 5.1%. Being the top provider in the industry – with a dominance of 93.13% – never comes easy by any means.
Borrowing rates for Fulcrum have also decreased slightly, which is somewhat to be expected. Maker has remained virtually flat, but show signs of angling upward again.
The biggest positive change is presented by dYdX, which went from 4.98% to 6.1% since late June. A very interesting turn of events, which further shows that DeFi platforms are still trying to find their place on the market.