Recursive Lending is a very popular strategy in DeFi. It involves lending and borrowing on Compound / AAVE in order to harvest the maximum reward possible. This strategy was very profitable at the beginning of 2021. However, returns have dropped considerably as more money flew into the strategy and the value of the Compound Token fell from $800 on May 21 to $125 at the end of January 22.
In this blog post, we show that given current market conditions, there are simpler, and more rewarding alternatives for DeFi users that are uncorrelated to token prices. One of these alternatives is fixed rate lending on [Notional Finance]( The latter is even more compelling in the DAI pool, as Compound returns have been historically lower versus USDC. **Lending on** [**Notional Finance**]( **increases on average your lending returns by 4 to 5% based on current prices.**
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