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High DeFi yields aren’t just about better tech—sometimes they depend on collateral reuse. This simulation shows how two lending models impact rates: → Rehypothecated Pools: Higher yields, lower borrowing costs. But: More risk, cascading failures in stress scenarios. → Isolated lending Pools: Safer, predictable costs. But: Lower yields, higher borrowing rates. No approach is strictly better. When choosing a lending protocol, you’re not just picking an APY—you’re deciding how your collateral is used and how volatile your borrowing costs might be.
