Aave, a noteworthy decentralized finance (DeFi) platform, has introduced its latest savings application designed for individual users, providing competitive deposit options with enhanced yields and real-time interest tracking.
According to a recent blog post, the Aave App offers an annual percentage yield (APY) between 5% and 9%, with interest accrual visible in real-time. The platform is equipped with features such as balance protection for amounts up to $1 million, a potential earnings calculator, and supports regular deposits.
Users can make deposits from various banking sources, debit cards, and compliant stablecoins, enjoying instant withdrawals with no processing delay. Currently, a waiting list for early access has been opened.
Aave asserts that their innovative app aims to compete directly with traditional banks and existing mobile savings services, which generally provide yields ranging from only 0.4% to 4% APY and struggle to match inflation rates.
Aave, which operates on the Ethereum network and utilizes smart contracts for lending and borrowing cryptocurrency, was initially introduced as ETHLend in late 2017 before rebranding to Aave in 2018.
Crypto Challenges for Conventional Banks
Onchain analyst Willy Woo recently made a provocative claim on the platform X, saying the traditional fiat monetary system effectively functions like a yearly wealth tax. He estimates that long-term inflation has reduced the value of the dollar by around 6.9% annually and noted a significant 40% increase in money supply from 2020 to 2022 due to the COVID-19 pandemic.
Crypto platforms are counteracting conventional bank offerings to aid users in countering inflation by presenting attractive yields on stablecoin holdings. Although the U.S. GENIUS Act prohibits yield-bearing stablecoins, it does not restrict third-party service providers from creating yield-based products using these assets.
In September, Coinbase forged a partnership with Morpho, a DeFi lending protocol, to deliver up to 10.8% returns on USDC (a stablecoin) holdings. The exchange previously incentivized users with a 4.5% APY for holding their USDC.
Later that month, Coinbase CEO Brian Armstrong announced the aim to develop a comprehensive crypto “super app” that could eventually substitute various traditional bank functions.
In October, Crypto.com also allied with Morpho to create stablecoin-lending vaults on the Cronos blockchain, allowing users to deposit wrapped Ether (ETH) or Bitcoin (BTC) to yield returns via Morpho’s DeFi markets.
Traditional banking institutions are responding vigorously. On November 5, several banking groups requested the Treasury to extend the stablecoin interest prohibition to encompass digital assets on platforms like exchanges and related services.
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Source: Willy Woo
