CoinDesk Indices, in collaboration with institutional DeFi firm Sentora, has launched the CoinDesk Overnight Rates (CDOR).
This groundbreaking benchmark interest rate transforms Aave’s on-chain lending data into standardised overnight money market rates for stablecoins such as USDC and USDT.
This initiative marks a major leap in bridging decentralized finance (DeFi) with traditional money markets. By leveraging Aave v3’s variable borrow pools, CDOR converts real-time supply and demand dynamics into reliable daily rates. These rates are intended to serve as the foundation for a wide range of financial products, including interest rate derivatives, floating-rate loans, and fixed-income instruments within the stablecoin ecosystem.
According to Aave Labs founder Stani Kulechov, CDOR introduces “transparent, risk-free lending rates,” creating scalable, automated financial infrastructure for stablecoins. This transparency is expected to unlock new DeFi use cases that mirror the efficiencies of traditional finance.
CoinDesk Indices’ Head of Product, Andy Baehr, added that while stablecoins are projected to grow into a multi-trillion-dollar market, the infrastructure needed to hedge and trade interest rate exposure has remained underdeveloped. CDOR, modelled on traditional finance benchmarks, addresses this gap and brings a critical layer of sophistication to DeFi markets.
To support liquidity and adoption, key market players—including Galaxy, FalconX, Flowdesk, and Tyr Capital—will act as founding market makers. Additionally, exchange-traded futures linked to CDOR are already in development, signalling a broader move toward institutional integration.
Sentora CEO Anthony DeMartino emphasised CDOR’s practical utility, noting that it allows users to switch between floating and fixed rates or speculate on yield curves in a single, capital-efficient transaction—a capability long absent in DeFi markets.
In a related development, Sky Inc. reported a $5 million loss for Q1 2025, a sharp reversal from its $31 million profit the previous quarter. The loss stems from higher interest payouts aimed at accelerating the adoption of its newly launched stablecoin, Sky Dollar (USDS), signalling the strategic importance stablecoins now hold in the evolving DeFi landscape.
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