Sentora Data Debunks DeFi 'Hot Money' Myth as Onchain Yield Proves Durable

New data from Sentora reveals that decentralized finance (DeFi) users are holding assets significantly longer than previously thought, challenging the "hot money" narrative. For fintech professionals, this shift suggests that risk management and product design are becoming more critical than chasing high yields, indicating a maturing onchain ecosystem with more durable capital flows.

What was announced

Sentora has released proprietary data from its "Fintech Onchain: Annual Report 2026" that suggests DeFi capital is becoming increasingly stable. By analyzing address-level behavior across the USDC strategies utilized by Kraken DeFi Earn, Sentora found that the majority of users are not moving capital rapidly between protocols to chase marginal gains in Annual Percentage Yield (APY). Instead, the data shows that 66.6% of addresses depositing into the "Advanced" strategy remained active after 90 days. Short-term retention was also high, with 76% of users remaining after 30 days and 86.9% after just seven days.

The report highlights that median holding periods across all three USDC strategies—Advanced, Boosted, and Balanced—now exceed 100 days. Specifically, the median hold time for the Advanced strategy is 107 days, while Boosted sits at 103 days and Balanced leads with 144 days. This behavior is occurring at a significant scale; Kraken DeFi Earn has grown to support more than 100,000 depositors and holds close to $1 billion in assets, with over $800 million in deposits recorded since its launch in January.

Sentora also identified a divergence in how capital is retained based on strategy type. While the Advanced cohorts retained 47.6% of their cumulative deposited capital after 90 days, the Boosted and Balanced strategies saw lower capital retention at 19.2% and 10.3%, respectively. The findings suggest that the GENIUS Act may further entrench these trends. By preventing permitted stablecoin issuers from paying yield directly, regulation is expected to drive demand toward products built on top of stablecoins, such as curated DeFi vaults and tokenized money-market funds.

"Sentora’s view is that onchain yield is becoming more durable, with product design and risk management increasingly mattering as much as headline returns."

Sentora

The companies involved

Sentora is a research and data firm focused on onchain behavior and the intersection of traditional finance and decentralized protocols. Its latest report provides a granular look at how retail and institutional capital interacts with yield-bearing digital assets in a shifting regulatory landscape.

Kraken, the platform whose DeFi Earn strategies were the subject of the study, is a major global digital asset exchange operated by Payward. The company has established a significant presence in the market by bridging the gap between traditional banking and crypto-native services. Payward has recently focused on expanding its regulated footprint, securing approvals in key international jurisdictions and launching sophisticated trading products. The Kraken DeFi Earn product, which launched earlier this year, represents the company's effort to simplify access to onchain yield for a broader user base. Payward’s market position is characterized by its move toward institutional-grade infrastructure, including 24/7 settlement capabilities and regulated derivatives, positioning it as a central hub for the "onchain fintech" movement described in Sentora's research.

What FF News has reported before

FF News has closely followed the international expansion and product diversification of Kraken’s parent company, Payward. Recently, we reported that Kraken Parent Payward Secures VARA Approval for Full UAE Launch in Dubai, marking a major step in its Middle Eastern strategy. We also covered how Payward and Singapore Gulf Bank Launch 24/7 Institutional Digital Asset Settlement, a move that aligns with the growing demand for durable onchain capital. Furthermore, the company’s push into sophisticated trading was highlighted when Payward to Launch Regulated Onchain Perpetual Futures for US Clients via Hyperliquid was announced, showcasing a shift toward regulated onchain financial products.

What this means

The transition of DeFi capital from "mercenary" to "durable" marks a fundamental shift in the industry's maturity. If users are willing to park capital for over 100 days, the sector is moving away from speculative "yield farming" and toward a model that resembles traditional wealth management. This puts immense pressure on protocols that rely solely on high, unsustainable APYs to attract liquidity; they are now competing against structured products that prioritize risk management and user experience. As the GENIUS Act reshapes how stablecoins function, the market for curated vaults and tokenized money-market funds will likely become the primary battlefield for onchain liquidity, favoring established platforms with robust regulatory standing.