Real-world assets need fixed-rate loans to scale in DeFi, analysts say

Analysts say fixed-rate lending is the clearest growth lever for real-world assets (RWAs) in decentralized finance, enabling credit desks to borrow against quality income assets at locked rates below asset yields. With stablecoins at $300 billion supply and vault assets nearing $20 billion, platforms like Morpho Midnight are expanding fixed-rate markets to match loan terms with RWA redemption timelines, attracting institutional counterparties. This addresses a key gap as current variable-rate pools, where rates surge with utilization, limit RWA looping to high-yield assets and scare off investment-grade credit due to rate variance.