DeFi Utilisation Efficiency Analyzer | Capital Productivity & Underutilised Opportunities

Pools Tracked

Avg Efficiency

0.070

Underutilised

Avg Utilisation

64.0%

Understanding Utilisation Efficiency

In lending protocols, utilisation rate measures the percentage of supplied capital currently being borrowed. Whilst this metric is commonly tracked, few analyse the relationship between utilisation and yield—essentially, how "hard" each percentage point of utilisation works to generate returns. Our efficiency ratio (APY ÷ Utilisation %) reveals which pools deliver maximum yield per unit of capital deployment.

This analysis serves dual purposes: (1) Identifying high-efficiency pools where capital is exceptionally productive (high yields despite moderate utilisation), and (2) Uncovering underutilised opportunities—pools with substantial idle capacity where increased borrow demand could drive yields higher without requiring additional supply. Understanding these dynamics enables more sophisticated capital allocation beyond simply chasing highest headline APY.

Core Concept

Two pools offering 6% APY are not equivalent if one operates at 80% utilisation whilst the other at 40%. The 40% pool delivers 0.15 APY per 1% utilisation (6÷40) versus 0.075 APY per 1% utilisation (6÷80) for the high-utilisation pool. The former represents superior capital efficiency—achieving identical returns whilst leaving 40% capacity available, suggesting either exceptional borrow demand or favourable rate curve parameters.

Most Capital-Efficient Pools

These pools demonstrate exceptional efficiency ratios, delivering high yields whilst maintaining moderate to low utilisation rates. They represent the most productive capital deployment opportunities in DeFi.

Highest Efficiency

USDS

Ratio: 0.070

Highest Available

USDS

$1,430,633,362

Capital Efficiency Rankings

Ranked by efficiency ratio (APY per 1% utilisation). Higher ratios indicate more productive capital—greater returns per unit of utilisation.

Pool	Protocol / Chain	APY	Utilisation	Efficiency Ratio	Grade	State
USDS	Sky Protocol Ethereum	4.50%	64.0%	0.070	GOOD	MODERATE
sUSDS	Sky Protocol Ethereum	4.50%	64.0%	0.070	GOOD	MODERATE

Underutilised Opportunities

Pools operating below 50% utilisation with substantial idle capacity. These represent potential value opportunities—increased borrow demand could drive yields higher without requiring additional supply.

Underutilisation Analysis

Low utilisation can indicate: (1) Excess supply relative to borrow demand—common in newer pools or chains with limited DeFi adoption, (2) Conservative rate curves—protocols setting high interest rates even at low utilisation to protect liquidity, or (3) Genuine opportunity—protocols with strong fundamentals but limited awareness. Distinguishing between these requires examining historical utilisation trends and protocol-specific factors.

Protocol Efficiency Comparison

Average efficiency metrics across protocols, revealing which platforms achieve optimal capital productivity.

Protocol	Pools Tracked	Avg Efficiency	Avg Utilisation	Assessment
Sky Protocol	2	0.070	64.0%	Efficient

Protocol Dynamics

Protocols demonstrate varying efficiency profiles based on their rate curve designs and market positioning. Morpho and Spark often show high efficiency due to optimised rate curves targeting specific utilisation bands. Aave V3 and Compound V3 balance efficiency with stability, maintaining moderate utilisation across diverse pools. Lower efficiency doesn't necessarily indicate inferior protocols—it may reflect conservative risk management or different market segments.

Efficiency Analysis Methodology

Our utilisation efficiency framework quantifies capital productivity through the efficiency ratio: APY ÷ Utilisation %. This metric reveals how effectively each percentage point of deployed capital generates yield, enabling direct comparison across pools with different utilisation levels.

Efficiency Ratio Calculation

Efficiency Ratio = APY ÷ Utilisation %
Example: Pool A (8% APY, 40% util) = 0.200 ratio vs Pool B (8% APY, 80% util) = 0.100 ratio
Interpretation: Pool A delivers double the yield per utilisation percentage—superior capital efficiency.

Efficiency Grades

EXCELLENT (≥0.08): Exceptional capital productivity. Yields significantly outpace utilisation—indicates strong borrow demand, optimal rate curves, or both.
GOOD (0.05-0.079): Above-average efficiency. Capital working productively with room for increased utilisation without yield compression.
AVERAGE (0.03-0.049): Standard efficiency. Typical relationship between utilisation and yield for mature pools.
POOR (<0.03): Low productivity. High utilisation required for modest yields—may indicate over-supply or compressed rate curves.

Utilisation State Classifications

SEVERELY UNDERUTILISED (<30%): Substantial idle capacity. Potential opportunity if borrow demand increases, or concern if chronically underutilised.
UNDERUTILISED (30-50%): Below optimal range for most protocols. Growth potential exists.
MODERATE (50-70%): Healthy range. Balanced supply/demand with capacity for growth.
EFFICIENT (70-85%): Optimal zone. High productivity without liquidity risk.
HIGHLY EFFICIENT (85-95%): Peak efficiency. Maximum productivity before liquidity constraints.
AT CAPACITY (>95%): Liquidity risk zone. Withdrawal constraints possible; yields may spike further but risk increases.

Data Considerations

Analysis uses current utilisation and APY snapshots updated hourly. Historical averages (30-day) provide context for utilisation stability. Theoretical APY projections at higher utilisation levels assume linear rate curve relationships—actual curves may exhibit non-linear behaviour, particularly approaching 100% utilisation where many protocols implement exponential rate increases.

Strategic Applications

1. Value Investing Approach

Target underutilised pools with high efficiency ratios—these represent potential value plays where increasing borrow demand could drive yields higher without requiring additional supply. Monitor 30-day utilisation trends: rising utilisation + high efficiency = strong signal. Declining utilisation despite high efficiency = potential concern requiring protocol-specific investigation.

2. Capital Allocation Optimisation

For equal yields, favour lower-utilisation pools (higher efficiency ratios). These provide: (a) Greater withdrawal liquidity—more available capital reduces exit friction, (b) Yield upside potential—increased utilisation drives yields higher, (c) Lower systemic risk—not operating at capacity limits. Exception: Very low utilisation (<20%) may signal protocol adoption concerns.

3. Protocol Selection Framework

Protocols demonstrating consistently high efficiency ratios across multiple pools suggest superior rate curve design or strong borrow demand dynamics. When choosing between protocols for same asset, efficiency ratio provides tie-breaker beyond simple APY comparison. Higher efficiency = more sustainable yields less dependent on pushing utilisation to extreme levels.

4. Risk Management

Pools at >95% utilisation demand caution regardless of efficiency ratios. Whilst yields may be attractive, withdrawal constraints can emerge during market stress. Maintain allocation limits (e.g., max 20% of portfolio) in high-utilisation pools. Diversify across utilisation bands: 40% in 50-70% util, 40% in 70-85% util, 20% in 85-95% util provides balanced risk/return profile.

UTILISATION EFFICIENCY ANALYZER