Seeking On-Chain Certainty Assets in Turbulent Market Conditions

The current global economic environment is filled with uncertainty. From gold prices reaching new highs to Bitcoin returning to high levels, risk-averse sentiment is quietly resurfacing. Against this backdrop, assets with structural support that can withstand volatility have become particularly precious. "Cryptocurrency yield-bearing assets" in the on-chain financial system may represent this new form of certainty.

Since the Federal Reserve began its interest rate hike cycle in 2022, the concept of "on-chain interest rates" has gradually entered the public eye. In the face of a risk-free interest rate maintained at 4-5% in the real world, crypto investors are beginning to reassess the sources of returns and risk structures of on-chain assets. A new narrative is quietly taking shape—crypto interest-bearing assets, which aim to construct financial products "competing with the macro interest rate environment" on-chain.

Currently, the yield-bearing assets of decentralized applications can be roughly divided into three categories: exogenous returns, endogenous returns, and real-world assets ( RWA ) linked.

Exogenous Returns: Subsidy-Driven Interest Illusion

The rise of exogenous returns is a microcosm of the rapid growth logic in the early development of DeFi. In the absence of mature user demand and real cash flow, the market has replaced it with "incentive illusion." Many ecosystems have successively launched massive token incentives, attempting to exchange user attention and locked assets through the method of "yield distribution."

However, these subsidies are essentially more like short-term operations where the capital market "pays for" growth indicators, rather than a sustainable revenue model. It once became a standard for cold starts of new protocols, whether it is Layer2, modular public chains, LSDfi, or SocialFi, the incentive logic is similar: relying on new capital inflows or token inflation, with a structure resembling a "Ponzi."

Historically, when external incentives weaken, a large number of subsidized tokens will be sold off, damaging user confidence and causing TVL and token prices to often experience a death spiral decline. Data shows that after the DeFi Summer boom faded in 2022, about 30% of DeFi projects saw a market cap decline of over 90%, largely related to excessive subsidies.

Investors looking for "stable cash flow" need to be more vigilant about whether there is a real value creation mechanism behind the returns. Using future inflation to promise today’s returns is ultimately not a sustainable business model.

Endogenous Returns: Redistribution of Use Value

Endogenous revenue refers to the money earned by the protocol through "real work" that is then distributed to users. It does not rely on issuing tokens to attract people or external subsidies, but rather generates income naturally through genuine business activities, such as lending interest, transaction fees, and even penalties in default liquidations. This income is somewhat similar to "dividends" in traditional finance, which is why it is also referred to as "quasi-dividends" in crypto cash flow.

The main characteristic of this type of income is its closed-loop nature and sustainability: the logic of making money is clear, and the structure is healthier. As long as the protocol is operational and users are utilizing it, there will be income coming in, without relying on market hot money or inflation incentives to maintain operations.

Endogenous returns can be divided into three prototypes:

1. Interest Rate Spread Type: Users deposit funds into the lending protocol, which matches borrowers and lenders and earns the interest rate spread. This type of mechanism is transparent in structure and efficient in operation, but the level of return is closely related to market sentiment.

2. Fee rebate type: The protocol will return a portion of the operating income (, such as transaction fees ), to participants who provide resource support. Its return is directly linked to the protocol's business volume, and its stability and ability to withstand cyclical risks are not as strong as that of the lending model.

3. Service-oriented Protocol: The protocol earns returns by providing services to other systems (, such as security support ). This type of revenue comes from the market pricing of the protocol's own service capabilities, reflecting the market value of on-chain infrastructure as a "public good."

On-chain Real Interest Rates: The Rise of RWA and Interest-bearing Stablecoins

An increasing amount of capital is beginning to pursue a more stable and predictable return mechanism: on-chain assets anchored to real-world interest rates. The core of this logic lies in connecting on-chain stablecoins or crypto assets to off-chain low-risk financial instruments, thereby maintaining the flexibility of crypto assets while obtaining "certainty interest rates from the traditional financial world."

Interest-bearing stablecoins, as a derivative form of RWA, have also begun to come to the forefront. Unlike traditional stablecoins, these assets are not passively pegged to the US dollar, but actively embed off-chain yields into the tokens themselves. They attempt to reshape the usage logic of "digital dollars," making them more like an on-chain "interest account."

Under the connectivity role of RWA, RWA+PayFi is also a future scenario worth paying attention to: directly embedding stable yield assets into payment tools, breaking the binary division between "assets" and "liquidity". This not only enhances the appeal of cryptocurrencies in actual transactions but also opens up new use cases for stablecoins—transforming from "dollars in an account" to "capital in active circulation".

Three Indicators for Finding Sustainable Income-Generating Assets

The logical evolution of "yield-generating assets" in crypto actually reflects the process of the market gradually returning to rationality and redefining "sustainable returns." For investors seeking stable returns, the following three indicators can effectively assess the sustainability of yield-generating assets:

1. Is the source of income "endogenous" and sustainable? Truly competitive yield-generating assets should have their earnings derived from the protocol's own business.

2. Is the structure transparent? On-chain trust comes from openness and transparency. Is the flow of funds clear? Is the interest distribution verifiable? Is there a risk of centralized custody?

3. Does the yield justify the opportunity cost in reality? In a high interest rate environment, on-chain product returns need to be sufficiently attractive.

However, even "yield-bearing assets" are never truly risk-free assets. No matter how robust their yield structure is, one must remain vigilant of the technical, compliance, and liquidity risks in the on-chain structure.

The future market for income-generating assets may be a reconstruction of the on-chain "money market structure." The on-chain world is gradually establishing its own "interest rate benchmarks" and "risk-free return" concepts, creating a more robust financial order.