DeFi lending protocols such as Aave and Compound pay variable, market-set rates from borrowers, and every loan is visible on-chain. CeFi lenders are companies that set their own rates and lend your coins out on terms you cannot see. Celsius, Voyager, BlockFi and Genesis froze withdrawals in 2022 and then filed for bankruptcy, and none of those deposits were FDIC insured. Below are current DeFi rates from DefiLlama and what to check before lending anywhere.
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Supply rates on Aave, Compound, Morpho, Spark markets with at least $10 million supplied. The supply APY is what depositors earn; the borrow APY is what borrowers pay.
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| Protocol | Chain / market | Supply APY | of which rewards | Supplied (TVL) | Details | ||
|---|---|---|---|---|---|---|---|
Variable rates that change every block. Supply APY includes reward-token incentives where shown; those can end at any time. Morpho rows are curated vaults whose risk depends on the curator. Not a recommendation.
| CeFi (company) | DeFi (smart contract) | |
|---|---|---|
| Who holds your coins | The company | A public smart contract; you keep your own wallet |
| Who sets the rate | The company, often tiered by loyalty or token holdings | Supply and demand, via a utilization curve |
| Where the money goes | Lent to borrowers the company chooses; usually not disclosed | Over-collateralized loans visible on-chain |
| Main risk | Company failure, withdrawal freezes, mismanagement | Smart-contract bugs, oracle failures, bad debt |
| If it fails | Bankruptcy court; you are an unsecured creditor | Losses fall on depositors of the affected market |
| Government deposit insurance | None | None |
| Account needed | Yes, with identity checks | No, just a self-custody wallet |
Four of the biggest crypto lenders failed within about seven months. Each advertised steady yields, each froze withdrawals first, and each left customers waiting in bankruptcy court.
Froze withdrawals June 12, 2022; filed for bankruptcy July 13, 2022 (Chapter 11)
Promised high yields while taking concentrated, illiquid bets with customer deposits. Froze withdrawals for about 1.7 million users. Its founder was later convicted of fraud and sentenced to 12 years in prison.
Froze withdrawals July 1, 2022; filed for bankruptcy July 5, 2022 (Chapter 11)
Lent a large share of customer assets to the hedge fund Three Arrows Capital, which defaulted. US regulators said Voyager had wrongly implied customer funds were FDIC insured.
Froze withdrawals November 10, 2022; filed for bankruptcy November 28, 2022 (Chapter 11)
Survived the mid-2022 crash through a credit line from FTX, then failed when FTX collapsed. Had already paid $100 million in 2022 to settle SEC and state charges over its interest accounts.
Froze withdrawals November 16, 2022; filed for bankruptcy January 19, 2023 (Chapter 11)
A large institutional lender hit by the Three Arrows and FTX failures. Its freeze also locked the savings of Gemini Earn customers, whose deposits Gemini had lent to Genesis.
Your coins are lent out on terms you cannot see
CeFi lenders re-lend (rehypothecate) deposits to trading firms and other borrowers. You do not see who borrowed, how much collateral they posted, or how concentrated the book is.
Withdrawals can be frozen overnight
Every one of these firms paused withdrawals first and filed for bankruptcy days or weeks later. Terms of service usually allow this.
No FDIC or SIPC protection
Crypto deposits at a lender are not bank deposits. In bankruptcy, depositors are generally unsecured creditors and wait in line, sometimes for years, for a partial recovery.
"Insured" rarely means what it sounds like
Where a platform mentions insurance, it typically covers specific events such as theft from a custodian, not the lender's own losses or insolvency. Read the policy scope before relying on it.
The largest DeFi lending market, running on Ethereum and many layer 2s. Pooled markets: every depositor of an asset earns the same variable rate, set by a utilization curve.
One of the original DeFi lending protocols. Version 3 ("Comet") uses separate markets, each with a single borrowable asset such as USDC, and several accepted collateral assets.
Isolated lending markets plus "vaults" run by third-party curators who choose which markets to lend into. Rates and risk vary a lot by vault and curator.
SparkLend is a lending market connected to the Sky (formerly MakerDAO) ecosystem, focused on DAI/USDS and ETH-based collateral.
We list only facts we can date and source. CeFi rates are set by the company and usually depend on loyalty tiers, so we do not quote them.
US availability: Announced a US relaunch in 2025; which products are offered can differ by state. Check the provider before signing up.
Rates: Variable and tier-dependent: advertised top rates usually require a loyalty tier, holding the NEXO token, or fixed terms. See the provider for current rates.
Crypto loans are over-collateralized: you deposit more than you borrow. If the collateral's value falls far enough, the loan is liquidated and you lose part of the collateral plus a penalty. Try your own numbers:
Each market publishes its own threshold per collateral asset; check it in the protocol's app.
Health factor = collateral × liquidation threshold ÷ debt. Below 1.0 the position can be liquidated. Interest accrues on the debt over time, which slowly lowers the health factor.
No form of crypto lending is risk-free and none is FDIC insured. DeFi lending risks smart-contract bugs, oracle failures and bad debt; CeFi lending adds the risk that the company itself fails, as Celsius, Voyager, BlockFi and Genesis did in 2022-23. Only lend what you could afford to have locked up or lost.
CeFi (centralized) lenders are companies: you hand them your coins, they set the rate and decide whom to lend to. DeFi (decentralized) lending runs on public smart contracts such as Aave or Compound: rates are set by supply and demand, and every loan, its collateral and liquidations are visible on-chain. DeFi removes company risk but adds smart-contract risk and requires managing your own wallet.
Rates follow utilization, the share of a pool that is borrowed. Most markets have a "kink": below a target utilization rates rise slowly, above it they rise steeply to attract deposits and push borrowers to repay. When many traders borrow stablecoins at once, supply rates can jump for days.
All three froze customer withdrawals and filed for Chapter 11 bankruptcy in 2022 (Celsius and Voyager in July, BlockFi in November after FTX collapsed). Genesis followed in January 2023. Customers became creditors in bankruptcy and recovered their funds only partially and slowly.
Loan-to-value is how much you borrow relative to your collateral. Each market has a liquidation threshold; if your debt grows past that share of your collateral's value (for example because the collateral price falls), anyone can repay part of your loan and take some collateral at a discount. Borrowing well below the maximum leaves room for price swings.
From DefiLlama's free yields dataset, filtered to Aave, Compound, Morpho and Spark markets with at least $10 million deposited, cached on our server for about an hour. The snapshot time is shown above the table.
Educational information only, not financial advice. Crypto lending can lose you some or all of your principal. Links on this page are plain links; we do not earn a commission from them.
