With higher yields and flexible deposits, Aave’s new app marks a deeper move into the consumer banking terrain as inflation drives demand for better savings tools.
Aave, a popular decentralized finance (DeFi) protocol, has unveiled a new savings app that offers higher-yield deposit options and real-time interest tracking for retail users.
According to a Monday blog post, the Aave App will offer 5% to 9% APY and show interest accrual in real time. The app includes up to $1 million in balance protection, lets users model potential earnings and supports recurring deposits.
The app accepts deposits from thousands of banks, debit cards and supported stablecoins, and offers instant withdrawals with no waiting period. A waitlist is currently open for early access.
Aave claims the new app is designed to rival banks and mobile savings tools, which it argues typically offer rates from 0.4% to 4% APY on high-yield accounts and “barely keep up with inflation.”
Aave is a decentralized finance protocol that facilitates lending and borrowing of crypto assets through smart contracts on the Ethereum network. It was launched as ETHLend in November 2017 and rebranded to Aave in September 2018.
Related: Aave to offer zero-fee stablecoin ramps in Europe after MiCA approval
Onchain researcher Willy Woo recently argued on X that the traditional fiat system operates like an annual “wealth tax,” estimating long-term dollar debasement at approximately 6.9% per year and pointing to a 40% increase in the money supply from 2020 to 2022 during the COVID-19 period.
One way crypto is competing with traditional banks and helping individuals fight inflation is by offering users high yields on stablecoins. Although the US GENIUS Act banned yield-bearing stablecoins, it did not prohibit third-party platforms from offering yield products built on top of them.
In September, Coinbase partnered with Morpho DeFi lending protocol to offer users up to 10.8% on their USDC (USDC) stablecoin holdings. The exchange was already paying users 4.5% APY in rewards for holding USDC on the platform.
Later that month, Coinbase CEO Brian Armstrong said the company intends to develop a full-service crypto “super app” that could eventually replace many traditional banking functions.
In October, Crypto.com also partnered with Morpho to offer users stablecoin-lending vaults on the Cronos chain, allowing deposits of wrapped Ether (ETH) or Bitcoin (BTC) to earn yield through Morpho’s DeFi markets.
Traditional banks are fighting back. On Nov. 5, several banking groups urged the Treasury to apply the stablecoin interest ban to digital asset platforms as well, including exchanges and related service providers.
