Aave Labs is launching a new savings app that’s designed to go toe-to-toe with traditional banks and higher-yield fintech options.
The platform will offer interest rates of up to 9% and “insurance-backed protection” on deposits up to $1 million, according to its website.
The app will enable users to deposit funds from a bank account or debit card, subject to daily limits, as well as unlimited stablecoin transfers. Over 12,000 banks and cards will be supported, according to the site.
Aave’s branding appears to set DeFi up as a genuine alternative to the traditional financial system, where users can expect to earn more without incurring additional risk. Decentralized lending has typically offered higher rates of return for users willing to accept potential smart contract flaws and fewer regulatory guardrails.
Ethereum founder Vitalik Buterin has started arguing for safer, lower-yield decentralized finance alternatives.
Aave, the largest decentralized lending protocol, has suffered security scares in the past, though it is generally considered to be among the gold-standard DeFi apps.
Interest will accrue 24/7 on the Aave App, earned through the Aave lending protocol. The Aave App “base rate” will initially be set at 5% per year with additional opportunities to earn “rate boosts” by inviting friends, setting up automated deposits, and verifying KYC information.
“Aave money markets are over-secured — borrowers are required to deposit more than they borrow, meaning your savings are backed by more than 100% of their value,” an FAQ reads. Aave Labs will earn a return based on the “small difference between the savings rates offered to users & the underlying rates earned.”
The app will launch first on the Apple App Store, with an Android version also in production.
A waitlist is currently open.
