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PYUSD, PayPal’s stablecoin experiment, hit turbulence. After soaring above $1 billion cap in August, it’s now spiraling, crashing down to a humble $618M. The token’s bullish run, which splashed onto Ethereum in ‘23 before infiltrating Solana, just took a hard reality check.

Kamino’s Yield Bribe Fizzles Out

Back in the heyday, Solana’s Kamino Finance turned PYUSD holders into kingpins. Kamino, one of those DeFi renegades, was tossing out fat yields—17%, give or take. But the faucet’s slowing, and now, users are barely scraping 7%. Traders, hunting for yield like sharks smell blood, ain’t sticking around for peanuts.

Solana’s other platforms like Drift and Marginfi—once dishing double-digit APRs—are also in contraction mode. Can’t expect whales to swim in shallow waters when the payouts are drying up. DragonFly’s Haseeb Qureshi nailed it when he said, “PYUSD circulating supply has completely round tripped as the KaminoFinance incentives they were blasting out have tapered off.” Simply put—no yield, no HODL.

Kamino’s Hail Mary Play

But Kamino ain’t ready to fold just yet. This week, they let PYUSD holders borrow against their WIF, POPCAT, and BONK—yeah, meme coins are still making noise. Plus, they’re sweetening the pot with a weekly $10K PYUSD handout. It’s a desperate throw to revive the action, but the market’s seen tricks before.

Meanwhile, on Ethereum’s side of town, lenders playing it safe on Aave are clocking a modest 4.3%. Not bad, but next to Solana’s fading high-rollers’ party, it’s just a quiet evening out.

Solana Drains, Ethereum Stabilizes

Solana’s PYUSD supply? Free-falling to $267M from its August peak of $600M+. That’s a rude awakening for those banking on Solana’s momentum. Ethereum’s sitting a bit steadier with $350M floating around, but without the big incentives, the vibe’s not quite as euphoric.

And sure, the total PYUSD cap’s up 375% year-on-year, but with the Solana crowd moving on, it’s clear this once-hyped coin’s honeymoon is running on fumes.