The Interplay of Real Interest Rates and Crypto Rates

Guy Young, the founder of Ethena, rejoins the show to give us an update on Ethena and to discuss the nature of crypto interest rates.

In this episode:

• Reflections on the Ethena launch
• ETH funding rates versus ETH ETF expectations
• Funding rates on crypto native exchanges versus CME
• Why Ethena versus doing the cash and carry trade
• At what point does Ethena start to drive down funding rates
• The history of the cash and carry trade in crypto
• Did yield farming represent a real form of yield?
• Why is yield farming less viable today?
• The ultimate convergence between tradfi and crypto yields
• Where risk premia come from for Ethena versus the risk free rate
• ETH taking yields and their development
• Guy’s concerns about Eigenlayer and its effect on DeFi
• Interactions between real rates and crypto rates
• Stablecoin supply versus tradfi interest rates
• Crypto yields versus RWA supply
• The share of stablecoins that is speculative in nature
• Guy’s expectations for the medium term future of crypto rates