Only 10% of crypto earns yield now — why most investors are sitting on dead money
Despite existing infrastructure, only 8% to 11% of crypto assets currently generate yield, primarily due to a lack of standardized risk disclosure compared to TradFi.Summary
Only about 8% to 11% of the total crypto market generates yield, significantly lagging behind the 55% to 65% seen in traditional finance (TradFi) assets, according to a RedStone analysis. This gap is attributed not to a lack of yield products—such as staking, DeFi lending, and yield-bearing stablecoins—but to a severe 'disclosure problem.' TradFi benefits from standardized risk ratings, mandatory disclosures, and stress-testing frameworks that allow for comparable evaluation of yield products. Crypto currently lacks this apparatus, offering only APY leaderboards and TVL dashboards that fail to quantify underlying risks like smart contract vulnerabilities, concentration risk, or rehypothecation.
The GENIUS Act provided clarity for stablecoins, boosting growth by removing regulatory uncertainty, but regulation alone is insufficient. Institutions require robust risk metrics to compare a stablecoin's risk-adjusted return against a money-market fund. The core barrier to institutional adoption is the lack of risk transparency, meaning there is no comparable scoring system to quantify the different risks associated with staking ETH versus holding a Treasury-backed stablecoin.
Closing this gap requires building a measurement layer, not inventing new products. This involves standardized risk disclosures, third-party audits of collateral, and uniform treatment of metrics like double-counting. Until crypto can clearly articulate what risk is attached to its yield opportunities, the bulk of global capital will remain on the sidelines.
(Source：CryptoSlate)