DeFi Yield Curves are Inverted
At first I thought DeFi yield curves were flat and high. There is no additional yield provided a DeFi investor in a staking pool or liquidity pool or any other yield-generating DeFi opportunity for staying in that opportunity for any longer.
However, the more I think about it, I believe that DeFi yield curves are inverted and very steeply inverted.
The longer an investor stays in a specific DeFi opportunity, the more time can pass for that platform offering that DeFi opportunity to grow. And typically, yields are boosted from a combination of sparse demand and reward tokens; both of which are greatly reduced over time, with growth.
So assuming that the DeFi TVL continues to grow, it is a relatively safe assumption that there will be some continued growth in the protocol in question.
And as that protocol grows, the yields that can be earned on that protocol should compress.
Hence, a longer duration DeFi investment will, with near certainty, yield less.
This would allow some interesting integrations of DeFi and TradFi, specifically in lending/borrowing in the real world — specifically, borrowing long duration from DeFi, and lending at the same duration in TradFi, or borrowing short term in TradFi to invest short term in DeFi.