Woken up by my phone vibrating at 3 a.m., as soon as the Fed Chairman spoke, Bitcoin immediately plunged 5%. Half-asleep, I opened Lorenzo’s data dashboard, intending to check just how bad my losses were. But—the staking yield line, after a few jitters, actually climbed back up on its own? I was instantly wide awake. This didn’t make sense. Traditional finance is tightening its belt, so why are DeFi protocols on this side still so lively?

While traditional markets are draining liquidity, DeFi is generating its own

When I used to do macro analysis, I was a firm believer in the Merrill Lynch Clock—move in the dollar index, and you could predict asset trends. But now, looking at protocols like Lorenzo, those old frameworks don’t seem to apply anymore. Last week, I had coffee with my college professor—he’s now a senior advisor at a central bank somewhere. Halfway through our chat, he suddenly said: “You DeFi folks are actually creating credit outside the banking system.”

That’s when it clicked for me. Why are Lorenzo’s yields defying the trend? Because with the Fed shrinking its balance sheet, there’s less money in traditional markets, but inside the crypto world, money is circulating even faster. Through restaking, Bitcoins just sitting idle in wallets are turned into hens that lay eggs—this process itself injects liquidity, and to some extent, mitigates the shocks of macro tightening.

Inverted yield curve hides opportunities

Right now, the U.S. Treasury yield curve is still inverted, and traditional financial institutions are struggling to survive on maturity mismatches. Lorenzo’s model actually offers an interesting approach: by combining different staking terms, you can DIY your own yield curve.

I tried it myself on Lorenzo: allocating funds according to