Peter Gaffney of O2O Capital Partners argues that fixed-rate, fixed-term lending is the missing piece for real-world assets (RWAs) to scale in DeFi, since borrow rates on variable-rate pools move with utilization. Illustratively, Aave's USDC borrow rate can climb from 4% to 14% as utilization goes from 92% to 100%, while JAAA yields 4.5%–5% and the one-year average USDC borrow rate is 4.56%, leaving only 50 basis points of spread. The April 2026 KelpDAO rsETH exploit pinned Aave's USDC pool at 100% utilization, forcing borrowers to pay 14% for five days. Morpho has opened fixed-rate markets, which Coinbase used to launch fixed-rate crypto-backed loans in September 2026, while Kamino offers 5.3% fixed-rate loans against Figure's auto loan portfolio. The piece also notes that a 5% shift in Sky and Ethena reserves could create $1.8 billion of demand for RWAs.
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