WHY THE DEFI LENDING MOAT IS BIGGER THAN YOU THINK

Summary from the TLDR Crypto newsletter

A common narrative is that vaults and curators own distribution, so they'll capture the economics. However, lending protocols (e.g., Aave and Spark) often earn more than the vaults built on top of them because they skim a reserve factor on interest paid on borrowed notional, while vault fees are usually charged on TVL. Aave and Spark capture multiples of vault revenue per unit of TVL and, in aggregate, even rival or beat upstream issuer economics (e.g., staked ETH issuers) in today's market structure.