Did Aave and CoinDesk Alter the DeFi and Stablecoin Landscape with CDOR?

CoinDesk Indices, in strategic alliance with Aave, is introducing CDOR, an onchain benchmark for stablecoin interest rates, commencing with USDT and USDC. Leveraging data from Aave V3, CDOR has the potential to transform DeFi, akin to SOFR’s role in TradFi.

The U.S. government is eager to see stablecoins that are backed by Treasuries flourish. Following the approval of the GENIUS Act in the Senate, it is now up for debate in Congress and is likely to gain approval.

Even though some legislators, including Elizabeth Warren, contend that certain revisions to the GENIUS Act were overlooked, the bill has received price floor across party lines. If it is enacted by Congress, it will establish a framework that allows businesses to issue stablecoins with a clear understanding of their legal status.

At this time, the stablecoin sector is expanding, offering investors opportunities to acquire some of the next 1000X cryptos. As of June 18, the combined market cap of all stablecoins exceeded $261 billion.

(Source)

USDT, recognized as the pioneer stablecoin, continues to be the largest with a trading market cap exceeding $155 billion. It holds far more value than all of the best cryptos to purchase, apart from BTC ▼-1.85% and ETH ▼-1.51%.

USDC from Circle, which recently completed its public listing on the NYSE, ranks as the second-largest stablecoin, valued at over $61 billion.

Algorithmic stablecoins, like USDS and Ethena Labs’ delta-neutral USDE, are also favored by investors looking for yield.

DISCOVER:9 Best Crypto Presales to Consider in June 2025 – Leading Crypto token Presales

What Does the CDOR Launch by Aave and CoinDesk Entail?

Acknowledging the significant role of stablecoins in crypto and their impact on Decentralized finance, particularly on Ethereum, CoinDesk Indices collaborated with Sentora (previously known as IntoTheBlock) and Aave, the foremost DeFi network based on total value locked (TVL), to create the CoinDesk Overnight Rates (CDOR).

CDOR serves as the first institutional-grade on-chain benchmark interest rate for stablecoins, initially available for USDT and USDC.

The tracker captures real-time borrowing activity from Aave V3’s variable-rate lending pools, enhancing transparency in overnight interest rate pricing within Decentralized finance and establishing a uniform framework. Updates to the overnight interest rates will be provided daily.

In a statement, Stani Kulechov, the founder of Aave Labs, expressed that CDOR offers “a transparent, risk-free lending rate” that unlocks fresh use cases for stablecoins. He anticipates that innovators will create intricate derivatives and fixed-income products, thereby increasing DeFi crypto market efficiency.

Anthony DeMartino, CEO of Sentora, mentioned that CDOR enables users to “transition from floating to fixed funding or speculate on the curve with a single, capital-efficient trade; a critical building block that has been missing for years.”

DISCOVER: Top Meme Coin ICOs to Invest in 2025

Is This the Beginning of a New Decentralized finance Age?

CDOR effectively presents a DeFi alternative to SOFR and CORRA, which are utilized in traditional finance (TradFi).

Owing to the transparency issues and the “subjectivity” associated with LIBOR, it was substituted with SOFR and CORRA in 2023. Like SOFR and CORRA, CDOR is free of risk and transparent, depending on real transaction data instead of subjective approximations.

Distinctively, CDOR gathers its data exclusively from on-chain sources, specifically Aave V3 pools, eliminating counterparty risk, unlike SOFR and CORRA, which are backed by collateral and subjected to TradFi.

CDOR tackles a significant obstacle in DeFi: the absence of a standardized, trustworthy funding benchmark.

Without such a benchmark, institutions have faced challenges in hedging borrowing costs or designing interest rate products, hindering DeFi’s capability to attract billions in institutional investment.

The effectiveness of CDOR is yet to be determined. Rapid adoption might trigger a surge in Decentralized finance liquidity as new products are introduced.

Galaxy, FalconX, and Tyr Capital are initial supporters, reflecting a robust institutional interest in exploiting the potentially multi-trillion-dollar stablecoin industry.

DISCOVER: Next 1000x Crypto – 10 Coins That Could 1000x in 2025

The article Did Aave and CoinDesk Change the Decentralized finance And Stablecoin Game with CDOR? first appeared on 99Bitcoins.