The post Are shrinking DeFi yields driving users away from on-chain markets? appeared on BitcoinEthereumNews.com.

DeFi yield has fallen to a much lower range in 2026, and was considered a sign of a maturing industry. However, the recent Drift Protocol hack raised the issue of technical risk and whether current yields offset the value of putting assets on-chain.  DeFi yield has been sliding on most protocols, and the early days of high-return yield farming seem to be over. DeFi has become a more mature sector, where protocols rely on stablecoins and the predictable yield of tokenized bonds or money funds.  Peak farming days often relied on new token issuance to offset risk, and traders would recoup their initial deposit within a short period.  Santiago R., founder of Inversion, considers that on-chain yield should be much higher to offset the current technical risks.  “I get asked constantly what is enough yield to come onchain. I think it’s at least 18% today. Anything below that is not worth the hassle or the risk,” explained Santiago R. in an X post.  He does not give details on generating that yield, but points to smart contract risk, general exposure of holdings, and overall protocol risk.  DeFi yield should be higher to offset technical risk DeFi is still not anonymous and has often exposed whale wallets. Confidential usage is not as widespread yet.  Overall, DeFi calculates risk and yield in financial terms, mostly linked to the volatile nature of crypto assets. Protocols do not account for general vulnerabilities, which have often led to dramatic losses.  On-chain rates are also low due to the limited demand for assets. Low yield on deposited tokens does not mean the investment is low-risk, but that risk may not be priced correctly, noted Santiago R. He proposes higher yields, alongside selling insurance products against losses.  DeFi yield slides in the past months DeFi yields have…

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Filed under: News - @ April 9, 2026 10:26 am