Defi Platform C.R.E.A.M’s Interest Rates Are Consistently Crypto’s Most Volatile

Crypto Borrowing Interest Rates
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Mooloo data reveals deposit interest rates from popular DeFi platform C.R.E.A.M are consistently the most volatile across the crypto-finance sector.

Although many consider the Decentralized Finance (DeFi) sector as poised to take on legacy financial services markets, data gathered by Mooloo throughout 2021 shows the level of interest rate volatility amongst DeFi platforms continues to be problematic for sector participants.

Mooloo records the current lending and borrowing interest rates of all the major DeFi and CeFi platforms across a range of the most popular cryptocurrencies multiple times a week – then assigns a volatility rating based on the percentage change between each reading. The volatility ratings are as follows:

  • STABLE = No Change
  • LOW = less than a 5% change
  • MODERATE = from 5.1% to 10%
  • HIGH = from 10.1% to 39.99%
  • EXTREME = greater than 40%

The Mooloo shows that interest rate swings on the C.R.E.A.M Finance platform are routinely the sector’s most volatile. Between the 1st of October and December 31st 2021, for example, 46% of C.R.E.A.M’s interest rate changes for deposits were in the HIGH to EXTREME range.

Interest rate volatility on the Compound DeFi platform was also high, with 28% of Compound’s rate changes being in the HIGH to EXTREME range over the same time frame. Similarly, deposit rate volatility on the AAVE DeFi platform was also elevated, with HIGH to EXTREME changes being recorded 25% of the time.

Ironically, the cryptocurrencies that routinely experienced the most extreme swings across all the platforms were the so-called ‘stablecoins’ DAI, USDT and USDC.

Although they also deal in cryptocurrency lending and borrowing, CeFi platforms such as BlockFi, Nexo and Celsius experienced almost zero volatility during the same period. 

Mooloo’s latest rolling volatility ratings can be found here