If you want to explain the "risk-free rate" in the crypto world to others, remember one core point: the Ethereum PoS staking yield is the ETH "risk-free rate" recognized by @Treehouse Official .
Why choose it? Because ETH staking yield is stable and predictable, like government bonds in traditional finance, and it is the "lifeblood" of the Ethereum network.
Without users staking ETH to maintain the PoS network, Ethereum cannot operate; this "systemic necessity" gives its yield a "safety bottom line" characteristic, which is currently around 3.5% annually.
The problem with DeFi now is that the interest rates are too chaotic: Aave's borrowing rates and Lido's staking yields are calculated separately, without a unified standard. This is where Treehouse comes in, as it aims to solve the problem of "interest rate fragmentation". It wants to use Ethereum staking yield as a foundation and then create a unified DeFi benchmark interest rate through DOR (Decentralized Interest Rate System).
In simple terms, with this "risk-free rate", DeFi finally has a fixed return "yardstick", and @Treehouse Official aims to implement this "yardstick" so that people can earn money in the crypto world just like in traditional finance, with a clear set of rules to follow.
