Guest introduction
Adrian Cachinero Vasiljevic is co-founder of Steakhouse Financial, an internet-native asset manager that builds non-custodial, on-chain investment products for stablecoins. He previously worked in investment banking at Goldman Sachs and in management consulting at Bain & Company, and has co-authored research on real-time risk metrics for stablecoin protocols, including a MakerDAO DAI case study.
Key takeaways
– Stablecoins are perceived as safer, faster, and cheaper than traditional banking for many users.
– Crypto’s permissionless, global nature makes it an efficient distribution channel.
– DeFi interest rates are low and increasingly track traditional risk-free benchmarks.
– Many DeFi lending markets lack complete infrastructure, creating operational and credit risks.
– Over-collateralized lending is a core DeFi strength, but it is not risk-free.
– Wrapping DeFi into centralized retail interfaces can obscure risks for users.
– On-chain cost of capital has risen recently due to supply-demand imbalances and heightened risk.
– DeFi capital markets remain disconnected from traditional finance, affecting yields and pricing.
– Blockchain guarantees are vital for transaction finality and on-chain integrity.
– DeFi has matured: lending rates now often trend near traditional finance benchmarks like SOFR.
Why users see stablecoins as safer
Stablecoins appeal because they feel simpler and more accessible than many bank products: faster settlement, lower friction for moving value, and the potential to earn yield. For a broad set of users, that combination—perceived safety plus convenience and yield—drives adoption.
Crypto as a global distribution channel
Because blockchains are permissionless and globally accessible from day one, crypto products can be distributed without the traditional onboarding and jurisdictional barriers that slow legacy finance. That permissionless architecture enables rapid reach and inclusivity.
Where DeFi interest rates stand
Interest rates across DeFi are generally low. Returns vary by protocol and by vault, but the overall trend is toward levels that sit at or near established risk-free rates in traditional finance. Investors need to choose protocols carefully because not all yield sources or vaults carry the same risk profile.
DeFi lending: evolution and dynamics
DeFi lending operates on supply-and-demand incentive equilibria. As the market matures, lending rates have tended to converge with traditional risk-free rates (for example, SOFR). Recent market shifts—combined with increased perceived protocol and counterparty risks—have pushed the on-chain cost of capital up in some areas, squeezing spreads and changing liquidity dynamics.
Infrastructure gaps and risk
Many lending constructs in DeFi still lack the full set of risk controls found in traditional credit markets. Weaknesses include limited protections against rug pulls, inadequate on-chain credit selection mechanisms, and operational risks tied to protocol design. These gaps mean over-collateralization helps, but does not eliminate exposure to smart contract, market, or design failures.
Strengths of over-collateralized DeFi lending
Over-collateralized lending backed by cryptographic guarantees is one of DeFi’s clearest advantages. Because collateral and transactions are verifiable on-chain, these models can be safer than some off-chain credit products. Still, investors must recognize that ‘‘verifiable’’ does not equal ‘‘risk-free’’—liquidity crises, oracle failures, or governance attacks can still cause losses.
Dangers of blending DeFi with CeFi retail fronts
When DeFi liquidity and protocols are surfaced through centralized retail interfaces, users may be exposed to complex risks they don’t understand. Abstractions can hide important differences between custodial and non-custodial solutions, and that mismatch can lead to misaligned expectations and poor outcomes for unsophisticated users.
Why blockchain guarantees matter
On-chain guarantees—clear, transparent rules and verifiable state—are essential because blockchain transactions exhibit practical finality: once an action is confirmed, it effectively becomes irreversible. Robust guarantees and clear protocol design preserve trust and reduce ambiguity about transaction outcomes.
Conclusion
DeFi has matured: yields have compressed and frequently track traditional finance benchmarks, while the on-chain cost of capital can spike when supply-demand or risk perceptions change. Stablecoins and on-chain guarantees provide real advantages in speed and transparency, but persistent infrastructure gaps and the risks of mis-selling DeFi via centralized front ends mean investors and builders must remain cautious and deliberate.