The popular decentralized finance (DeFi) protocol Aave has launched a new savings application that offers retail users higher yield deposit options and real-time interest tracking.
According to a blog post on Monday, the Aave App will provide an annual percentage yield (APY) ranging from 5% to 9%, with real-time updates on interest accumulation. The app includes balance protection of up to $1 million, allowing users to simulate potential earnings and supports fixed-term deposits.
The app accepts deposits from thousands of banks, debit cards, and supported stablecoins, offering instant withdrawals without a waiting period. A waitlist is currently open for early access.
Aave claims that this new application is designed to compete with banks and mobile savings tools, which the company believes typically offer APYs of 0.4% to 4% on high-yield accounts, "barely keeping up with inflation."
Aave is a decentralized finance protocol that facilitates the lending of crypto assets through smart contracts on the Ethereum network. It was launched in November 2017 under the name ETHLend and rebranded to Aave in September 2018.
On-chain researcher Willy Woo recently stated on X that the operation of traditional fiat currency systems resembles an annual "wealth tax," estimating the long-term depreciation rate of the dollar at about 6.9% per year, and noted that the money supply increased by 40% during the COVID-19 pandemic from 2020 to 2022.
One way cryptocurrencies compete with traditional banks and help individuals combat inflation is by offering users high yields on stablecoins. Although the U.S. GENIUS Act prohibits interest-bearing stablecoins, it does not prevent third-party platforms from offering yield products based on them.
In September, Coinbase partnered with the Morpho DeFi lending protocol to offer yields of up to 10.8% on USDC stablecoins held by users. The exchange had previously paid a 4.5% APY reward to users holding USDC on the platform.
Later that month, Coinbase CEO Brian Armstrong stated that the company intends to develop a full-service crypto "super app" that could eventually replace many traditional banking functions.
In October, Crypto.com also collaborated with Morpho to provide a stablecoin lending vault on the Cronos chain, allowing users to deposit wrapped Ethereum (ETH) or Bitcoin (BTC) to earn yields through Morpho's DeFi market.
Traditional banks are fighting back. On November 5, several banking groups urged the Treasury to extend the ban on interest for stablecoins to digital asset platforms, including exchanges and related service providers.
Related: Cboe to launch Bitcoin (BTC) and Ethereum (ETH) "continuous futures" in the U.S.
Original article: “Aave launches retail savings app offering up to 9% APY to compete with fintech and traditional banks”
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