Are Rising Yields Putting the Squeeze on DeFi? It’s a bit more complicated than comparing Treasury yields and staking rates.

In the ever-evolving world of digital assets, Ethereum is facing the squeeze of diminishing demand amid rising U.S. Treasury yields. This is evident in the ether (ETH) staking rate, which is the reward paid to validators to support the operation of the Ethereum network. According to the Composite Ether Staking Rate (CESR) index, this rate continues to hover around 3.7% annualized, less than half the rate back in June of 8%, as rewards from fewer network transaction fees are spread across a larger number of validators.
Unfortunately, this reward from staking ether falls short of the 5% yields provided by U.S. government bonds – basically the safest assets in the world and the benchmark investment from which all other investments are evaluated within the existing financial system.