Ethereum DeFi Vault Yields Decline, Dollar-Denominated Assets Exceed Treasury Returns

The yields of Ethereum (ETH) based DeFi vaults have been found to be lower than traditional staking. In contrast, vault strategies managing dollar-denominated assets have exceeded U.S. Treasury yields for three consecutive months. According to a report by Glassnode, the asset balance of the vaults increased by approximately 15% compared to the previous month, reaching $9.8 billion. DeFi vaults operate by utilizing deposited assets for lending, liquidity provision, and staking. The low yields of Ethereum vaults suggest that investors need to consider additional returns when choosing complex vault strategies. However, the high yields of dollar-denominated vaults do not sufficiently compensate for the risks associated with smart contract vulnerabilities or collateral assets. When evaluating the actual yields of DeFi vaults, it is essential to distinguish between the returns generated from the underlying assets and the additional returns obtained from the operational strategies, with withdrawal conditions also acting as a significant variable. Therefore, the profitability of DeFi vaults cannot be judged solely by the annualized percentage yield (APY).

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