According to CryptoPotato, MakerDAO's revenue matrix reveals that crypto-backed loans have become the decentralized finance (DeFi) protocol's largest revenue contributor, surpassing its real-world asset (RWA) vault. DeFi-native loans now account for 50.1% of MakerDAO's projected $243 million annual revenue, with crypto-backed lending standing at $2.4 billion. This is expected to generate $122 million in revenue, exceeding the protocol's RWA vault, which is estimated to bring in $107 million annually.
Crypto lending's resurgence as MakerDAO's primary revenue driver marks a return to the project's roots. In 2021, DeFi-native lending generated up to $200 million in annual revenue during the sector's peak period. However, the crypto market experienced a significant downturn, with two major crashes causing a massive deleveraging event. DeFi protocols like Maker and Aave managed to weather the storm, while smaller players struggled or closed their services.
The recent market recovery, which saw crypto's market capitalization double to $1.7 trillion, has led to a resurgence in demand for crypto-backed loans. This could indicate a renewed appetite for risky long bets on future crypto prices. MakerDAO's DAI stablecoin loans serve as a major liquidity driver for trading, and with crypto loans accounting for over half of the protocol's revenue, it suggests that sentiment has turned bullish.
A shift towards risk-on assets may also indicate that market participants expect rate cuts from the US Federal Reserve and see little reason to invest in US treasury bills when DeFi rates are trending towards double-digit yields. MakerDAO's earning potential remains strong, regardless of whether DeFi rates are higher or lower than US-fed interest rates. The protocol recently injected $100 million worth of RWA through BlockTower Andromeda, primarily allocated to short-term US Treasury bonds. This move is part of MakerDAO's 'Endgame' plan, which aims to increase investment in RWA and further decentralize its DAI stablecoin backing.