DeFi Lending Plummets Amidst Market Volatility

Cryptocurrency market volatility is causing a decline in lending activity on decentralized finance (DeFi) platforms such as Aave and Morpho. Data shows the average yield for USD stablecoins has dropped to 2.8%, its lowest point in over a year, a sharp decrease from the December peak of 18%. Over the weekend, Bitcoin and Ethereum prices fell below $75,000 and $1,500 respectively, triggering the liquidation of many leveraged positions. Aave alone processed more than $110 million worth of liquidations over the weekend. This heightened market risk has resulted in a sustained decline in lending demand.