The side effect of huge TVL inflow is supply rates will get compressed if the liquidity demand couldn't catchup. Katana's Morpho Liquidity jumped 3x but it fails to sustain as supply rates dropped to ~1% due to lack of liquidity demand. On the market level, even with negative interest rate for borrowing, between -4% to -20%, there are still millions of idle liquidity.
donnoh.eth
@donnoh_eth
03-17
crazy how easy it is to gain and lose liquidity nowadays. @katana already lost ~40% of the funds gained a couple of weeks ago and still dropping
screenshot below is just last 24h x.com/l2beat/status/…
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Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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