A recent wave of lending incentives on a major DeFi platform has been reshaping the market dynamics. The push to boost USD1 liquidity through reward mechanisms has quietly triggered some notable shifts. Ethereum now stands as the top chain by total value locked—a significant move that signals where liquidity is flowing. More interesting is the knock-on effect: USD1 borrow rates have compressed to below 2.4%, tightening spreads and making yield strategies more competitive. This has opened up opportunities for savvy traders running looping strategies on staked USD variants. The numbers don't lie—risk-adjusted returns have hit 51% APR for those positioned correctly. It's a reminder that DeFi rewards aren't just about the headline APY; they're about understanding the cascade effects across protocols and finding the layered yield opportunities.