Capital Efficiency in DeFi: The Hidden Cost of Idle Collateral
Discover the hidden cost of idle collateral and how retained yield, borrowing rates, LTV, and risk affect the true capital efficiency of DeFi lending positions.
Discover the hidden cost of idle collateral and how retained yield, borrowing rates, LTV, and risk affect the true capital efficiency of DeFi lending positions.
DeFi looping uses repeated borrowing and redepositing to increase exposure, amplify yield, and put more capital to work. This guide breaks down how looping works, how leverage impacts returns, and the key risks to consider, including liquidation, depegs, changing borrow rates, and liquidity.
DeFi lending risk extends far beyond smart contracts. This guide breaks down the seven core risk layers, from oracles and liquidations to collateral, liquidity, governance, and composability, and provides a practical framework for evaluating how lending protocols manage, contain, and absorb stress.
Productive collateral allows DeFi users to continue earning yield while borrowing against their assets. Learn how yield-bearing collateral, including liquid staking tokens, stablecoins, vault shares, and tokenized treasuries, can improve capital efficiency and reshape the economics of DeFi lending.
Posting hyAUSD as collateral lets a holder borrow AUSD or USDC without redeeming the vault position, so the vault keeps earning while the loan funds liquidity or a leveraged stablecoin strategy. This piece walks through both markets, the leverage ceiling implied by max LTV, a worked net APY example, and the conditions that turn the spread negative.
TLDR; PT-AUSD is now live as collateral on Curvance. For anyone holding Pendle principal tokens, that changes what the position can do. Instead of sitting idle until maturity, PT-AUSD can back a loan while its redemption value stays intact. This post covers what a Pendle PT is, why a principal token works as lending collateral, and what becomes possible once PT-AUSD is deposited on Curvance.