After April's $606 Million in DeFi Hacks, What's the Fair Value Yield Rate?

$606 million in DeFi exploits in one month. Two of the space's sharpest risk thinkers debate whether lenders are being paid anywhere close to enough. ======================================================== Thank you to our sponsors! Coinbase One 20% off first year of annual plan + $50 Bitcoin bonus. Offer valid until May 31. coinbase.com/unchained Citrea Bitcoin changed how money works. Satya changes how Bitcoin scales. citrea.xyz/unchained ======================================================== One month, $606 million in exploits. And yet DeFi lending yields for blue-chip collateral sit close to SOFR, as if nothing happened.  Tom Dunleavy, head of venture at Varys Capital, did the math and concluded that fair risk-adjusted DeFi yields should sit around 12.5%. Adrian Cachinero Vasiljevic, co-founder of Steakhouse Financial, thinks that number paints with too broad a brush, and that for the right primitives, with the right collateral, the market rate might actually be close to correct.  Host Laura Shin queries them on the TradFi equations that underpin the debate, the DeFi-specific risks that those equations miss, and on whether depositors are sleepwalking into tail risk they cannot fully see. Host: ⁠⁠⁠⁠⁠⁠⁠Laura Shin⁠⁠⁠⁠⁠⁠⁠, Host / Unchained Guests: ⁠⁠⁠⁠Tom Dunleavy, Head of Venture, Varys Capital — @dunleavy89 Adrian Cachinero Vasiljevic, Co-Founder, Steakhouse Financial — @adcv_ Timestamps 🔥 01:14 How Tom and Adrian are rethink yield rates after $606M worth of DeFi hacks in one month 📊 08:46 How TradFi prices risk, and why the same framework still applies to DeFi ⚠️ 13:54 The DeFi-specific risks TradFi can't model: hacks, oracles, governance, exotic collateral 🔢 18:20 Adrian on why loss-given-default in DeFi is 'almost total', and what that changes 🤝 23:52 Where Tom and Adrian actually disagree: resolution, not structure 📉 32:34 Luca Prosperi's additions: continuous collateral observation, liquidation timing, legal process 💬 41:49 Dan Robinson's pushback: if risk is mispriced, shouldn't demand fix it? 🏗️ 53:59 RWAs as collateral: why non-crypto-native assets may be the most dangerous mismatch 🔭 57:19 Which protocols actually reduce the risk premium, and how to think about the rest Learn more about your ad choices. Visit megaphone.fm/adchoices