Lending and borrowing rates

We can see how the cycles of "overheating" and "cooling down", based on the lending/borrowing rates on AAVE, Compound The current version (updated in June 2024) includes much more. Namely, we first observe "the price of the money" (the first 4 charts). What you can get in DAI DSR, AAVE and Compound for your stables (DAI, USDC and USDT) Here you will notice the cycles of "heat", "cooling down" and (a kind of) "winter". During "hot" times the rates for stables is very high, obviously above 10%, often spiking all the way up to 15-20% even. This is high risk area, the top is being formed. The bottoms are formed once we get down to "normal rates". They are about FED rate + max 2%. To further analyse the market dynamic, we have the events of "repayments" (this is where the market participants feel worries about their borrowed stables) and also "liquidations", this is where the real pain is being enforced on the market participants. Without the pain there is no real bottom.