Franklin Templeton Preps Money Market Funds for DeFi

Franklin Templeton's move into DeFi money market funds could stabilize stablecoin yields and reduce funding rate volatility in the long term, especially for assets like ETH and BTC which are commonly used as collateral. Increased institutional participation could also compress funding rate arbitrage opportunities, requiring more sophisticated strategies to extract alpha. In the short term, announcements might increase speculative activity, widening spreads.

This move signals growing institutional acceptance of DeFi. For delta-neutral traders, it's crucial to monitor the yield curves of these new money market funds and how they impact stablecoin borrowing rates. Look for potential cross-protocol arbitrage opportunities. The liquidity depth of these funds could also influence the effectiveness of hedging strategies using perpetual swaps. Any regulatory changes spurred by this institutional involvement need to be closely watched.