DeFi Markets Update 2026-07-28
Spread Cycles, View on Vaults, PAXG on Kamino
Welcome to another DeFi Markets Update—your no-nonsense briefing on the cryptobanking plumbing and market pulse.
Spread Cycles of Prime and High Yield V2 on Base
Over the last three months, the High Yield USDC V2 vault on Base has maintained an average yield premium of 1.1% over Prime USDC V2 (7-day basis, ranging from 0.7% to 1.8%) while following a recurring 2 to 3 week cycle.
The cycle reflects the different liquidity profiles of the underlying markets. Prime is concentrated in the deep cbBTC/USDC market with approximately $1.4B supplied across a broad lender base, where utilisation remained close to 90% and lending rates stayed within a relatively narrow 3.6% to 4.7% range throughout the quarter.
On the other hand, High Yield allocates across smaller markets including cbXRP, SOL, cbADA, cbLTC and mGLO, where the vault is one of the largest liquidity providers. In these markets borrowing grows steadily (cbXRP borrow rose from $15M to $34M over the period, roughly $1M per week) while new lending liquidity typically arrives in larger, less frequent tranches of $1.5–3M.
As borrowing gradually absorbs available liquidity, utilisation rises above Morpho’s 90% target and the Adaptive Curve interest rate model increases lending rates over time. Higher yields attract fresh deposits, utilisation returns toward target, lending rates normalise, and the cycle repeats as borrowing demand continues to build. Steakhouse actively manages allocations across these markets in response to the changing utilisation and lending rates, helping absorb market-specific imbalances and reduce dispersion in the vault’s overall yield.
This pattern has repeated consistently throughout the quarter, making it a useful framework for understanding how the High Yield vault behaves as liquidity conditions evolve. Past cycles do not predict future outcomes, though we hope our readers will recognise familiar conditions as similar market dynamics might emerge again.
Steakhouse’s Perspective on Onchain Vaults
The SEC published a statement on vaults and onchain lending strategies, and at Steakhouse we welcome the engagement it invites. We recently published our perspective on vaults, highlighting why transparent and verifiable structures are the right foundation for the space. Below is a short summary of the principles that guide our approach. If you want to read the full article, please see ‘The Steakhouse view on Vaults’.
The Steakhouse View on Vaults
Steakhouse Financial’s mission is to make finance open and transparent. Our vision is to empower everyone with institutional-grade DeFi tools to raise, manage and distribute the capital they need to make a difference in the world. We believe onchain tools can improve both market efficiency and investor protection, and we expect the rules to mature as th…
Steakhouse’s mission is to make finance open and transparent and to empower everyone with institutional-grade DeFi tools to raise, manage, and distribute capital. We believe onchain tools can improve both market efficiency and investor protection, and we expect the rules to mature as the technology does. Our principles focus on vaults as they become mainstream portfolio infrastructure.
We believe there is a secular trend toward stablecoins as a default way of using money, with users expecting compatible financial products. Vaults can deliver meaningful improvements in market efficiency and investor protection by creating cost efficiencies, expanding opportunities, and providing transparency through public blockchains and strong cryptographic guarantees.
Steakhouse’s approach is anchored by one principle: cryptographic guarantees outrank social guarantees. Our gold standard for vault design is built on trustless onchain NAV accounting, automated and transparent strategies, and strict noncustodiality, so users can verify protections onchain and understand their exposure with confidence.
We welcome the Commissioner’s invitation and look forward to contributing as an industry voice while the framework develops. We publish our standards because users and partners deserve a clear basis for comparison, and platforms deserve a clear signal of where the bar is moving. Our perspective will remain documented in public, tested in production, and verifiable by anyone.
PAXG Joins Kamino’s Lending Markets
The PAXG Market is now live on Kamino, curated by Steakhouse. You can now supply $PAXG, the tokenised gold asset issued by @Paxos, as collateral and borrow USDG.
PAXG is a tokenised, fully allocated gold asset backed 1:1 by physical gold held in LBMA vaults. The market pairs PAXG as collateral with USDG as the borrow asset, with an 80% liquidation LTV, expanding capital-efficient borrowing against tokenised real-world assets.
The launch brings one of the largest tokenised gold assets into Solana’s lending ecosystem, allowing users to retain gold exposure while accessing onchain dollar liquidity through USDG.