A structural shift is reshaping DeFi yield
According to Hotcoin Research’s article, “DeFi Yield Logic Reconstruction: From Native On-Chain Yield to TradFi Yield Distribution,” DeFi returns over the past several years were primarily generated from internal on-chain activity. The report notes that lending protocols earned revenue from user borrowing demand, while decentralized exchanges captured fees from trading volume. In that model, protocol income was largely tied to capital usage inside crypto markets, transaction flow, and the intensity of native on-chain financial activity.
The article argues that this yield framework is now being reconstructed. The key transition described by Hotcoin Research is a move away from relying only on endogenous on-chain yield and toward the distribution of TradFi-originated returns through DeFi infrastructure. That marks a notable change in how yield is sourced, packaged, and delivered to on-chain users. It also suggests that market participants may increasingly evaluate DeFi protocols not just by internal token incentives or cyclical on-chain demand, but by the quality and sustainability of underlying off-chain financial income being routed into crypto rails.
In practical terms, the report highlights a broader reorientation of DeFi revenue logic. Historically, lending spreads and DEX fees served as representative examples of internally generated returns. Under the emerging framework, attention shifts to how traditional financial yields can be introduced into blockchain-based products and distributed through decentralized systems. This changes the reference point for valuation, risk assessment, and yield sustainability across the sector.