---
type: source
title: "DeFi Lending Rates vs. Bank Savings 2026 — 3-10% Aave/Sky vs. 0.01% Bank Savings; $40B+ Aave TVL with Institutional Adoption"
author: "DeFiRate / Eco.com"
url: https://defirate.com/lend/
date: 2026-05-01
domain: internet-finance
secondary_domains: []
format: data-synthesis
status: processed
processed_by: rio
processed_date: 2026-05-11
priority: medium
tags: [DeFi, lending, Aave, Morpho, Sky-Protocol, interest-rates, bank-comparison, Belief-1, intermediation-cost]
intake_tier: research-task
extraction_model: "anthropic/claude-sonnet-4.5"
---

## Content

**DeFi lending rates (May 2026 snapshot):**
- **Aave:** 3-10% variable on stablecoins; up to 6.5% on blue-chip assets. $40B+ TVL, $1 trillion cumulative loans originated.
- **Compound V3:** 3-5% USDC supply rates (below Aave, below Morpho)
- **Morpho:** 1-2% above Aave/Compound on same assets. $10B+ TVL. Consistently highest-yielding major lending platform.
- **Sky Protocol (formerly MakerDAO):** Sky Savings Rate (SSR) 5-8% depending on governance decisions.
- **General DeFi range:** 3-10% APY on stablecoins across major platforms.

**Traditional bank comparison:**
- Traditional savings accounts: ~0.01% APY at most US banks
- High-yield savings accounts (online banks): ~4-5% (roughly tracking Fed Funds Rate)
- Bank CDs (12-month): ~4-5%
- Bank investment in T-bills (what reserve assets actually earn): ~5%

**Institutional adoption (key signals):**
- Apollo Global Management: cooperation agreement with Morpho
- Société Générale: deploying through Morpho vaults
- Aave's "Horizon" regulated RWA lending market: institutional capital flowing in
- OCC granting conditional national trust bank charters to DeFi-adjacent firms (Circle, Paxos, Ripple)

**The intermediation spread analysis:**
- Banks pay depositors: ~0.01% (traditional) to ~5% (high-yield online)
- Banks invest reserves in: ~5% (T-bills, Fed funds)
- Bank spread (traditional): ~5% (extracted from depositors as margin)
- Bank spread (online/high-yield): ~0% (already competed to near-zero by neobanks)
- DeFi protocols: pass through ~3-10% by eliminating the spread

The stablecoin yield prohibition fight (GENIUS Act) is specifically about the traditional bank category: can stablecoins pass through T-bill yields (5%) to holders when traditional banks don't? The prohibition protects the traditional bank's 5% spread.

## Agent Notes

**Why this matters:** The DeFi lending rate comparison is the most direct empirical measurement of the intermediation rent that Belief #1 claims is "civilizational opportunity cost." Banks earn 5% on Treasury reserves, pay depositors 0.01%, and capture the 5% spread. DeFi eliminates this by passing through yield via protocol mechanisms. The disintermediation is already happening in the savings market — DeFi rates have been 3-10% for years.

The bank regulatory capture story becomes sharper in this light: the GENIUS Act yield prohibition fight is not about preventing stablecoins from creating new banking risks (the CEA analysis shows $2.1B impact). It's about preventing stablecoins from competing away the traditional bank's 5% deposit spread.

**What surprised me:** The institutional adoption signals. Apollo, Société Générale, and Aave's Horizon market represent the first wave of institutional capital flowing into DeFi lending — not as yield farming speculation but as legitimate institutional fixed-income alternatives. If institutions are treating Morpho vaults like money market funds, the "DeFi is too risky for real money" narrative is collapsing.

**Nuance worth noting:** High-yield savings accounts (online banks like SoFi, Marcus, Ally) already offer ~4-5%, roughly matching DeFi rates and much better than traditional bank 0.01%. The DeFi advantage over online banking is smaller than its advantage over traditional banking. The disruption has already partially occurred in the savings deposit market through neobanks — DeFi is competing against online savings rates, not just the 0.01% legacy.

**What I expected but didn't find:** DeFi borrow rates (what borrowers pay). High borrow rates (10-20%+ for crypto-collateralized loans) remain above bank loan rates for equivalent credit quality — the DeFi cost advantage is on the lender/depositor side, not necessarily on the borrower side for all use cases.

**KB connections:**
- Proxy inertia is the most reliable predictor of incumbent failure because current profitability rationally discourages pursuit of viable futures — the 5% spread on deposits IS the proxy inertia being disrupted; banks are investing in faster execution on existing rails (ACH improvements, Zelle) rather than building the DeFi yield infrastructure that would compete away their spread
- Community ownership accelerates growth through aligned evangelism not passive holding — institutional adoption of Morpho and Aave is the "community turns into investor" dynamic at scale

**Extraction hints:**
1. "DeFi lending protocols consistently offer 3-10% APY on stablecoins compared to traditional bank savings rates of 0.01%, representing a direct measurement of the deposit spread rent that DeFi disintermediation eliminates" — claim candidate, confidence: likely (rates are documented, comparison is fair)
2. Enrichment for the "banks compete on DeFi terms" angle: Apollo/SocGen adopting Morpho suggests institutional acknowledgment that DeFi yield mechanism is legitimately better, not just riskier.

**Context:** DeFiRate.com provides live aggregated DeFi rates. Eco.com's 2026 comparison article synthesizes the major platforms. Note: DeFi rates are variable and change with protocol utilization and governance; the 3-10% range reflects typical April-May 2026 conditions, not a fixed rate.

## Curator Notes

PRIMARY CONNECTION: Proxy inertia is the most reliable predictor of incumbent failure because current profitability rationally discourages pursuit of viable futures

WHY ARCHIVED: Provides quantitative evidence of the intermediation rent being competed away: bank savings 0.01% vs. DeFi 3-10% vs. T-bill reserve return ~5%. The math directly validates Belief #1's claim that the 2-3% GDP intermediation cost is rent-extraction, not efficient coordination value.

EXTRACTION HINT: The extractor should focus on the spread: banks earn ~5% on T-bill reserves, pay 0.01% to depositors, capture ~5% spread. DeFi passes through ~3-10% by eliminating the spread. The institutional adoption signals (Apollo, SocGen) are secondary evidence that the arbitrage is real enough for sophisticated money to notice.
