Consumer DeFi, the part that never really took off because DeFi has mostly been complex to the average person. Think about telling that random lady or guy in the next street that they can earn money providing liquidity to asset markets, or that they can move their funds into smart contracts and earn yield.
It all sounds close to nonsense and probably makes the average person want to slap you or yell at you.
What the hell do you mean by providing liquidity? What's a smart contract? Can I do that with my bank app?
These are probably some of the questions that will pop up and when the answer is even more complex than the original pitch, there's a instant taste of disgust in the mouth.
DeFi have been stuck this way for its entire existence. Everytime something has been different, it's been centralized finance disguised as DeFi.
Is the change here with Aave?
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. — Cointelegraph report
Aave is the leading decentralized finance protocol with over $31.07 billion in total value locked (TVL). Generally, TVL can be a vanity metric but when it comes to Aave, it's not so much of a vanity metric as said TVL is directly generating income in a meaningfully net-positive way.
Aave has an annual revenue that exceeds $135 million. With its decentralized lending being overcollateralized, it's ecosystem is backed by 25% more assets than is borrowed in some cases.
That said, people are excited about the Aave app launch with expectations of mass adoption, seeing that the app is built to feel like any traditional Fintech app while still only being a channel to the decentralized finance layer.
The Aave app will not hold custody of user funds or assets, according to Aave Labs, yet, somehow, savings balances will be insured for up to $1 million in capital.
While we wait on the full app launch as it is still in early stages and only open to a few and further product details are promised for a later time, I think that this is a step in the right direction.
I probably won't agree with all that Aave will do with this Aave app launch, I am frankly not sure how I feel about insurance, given the reputation of these companies and also, it's really seems silly to be offering insurance to self-custodied funds, especially as an unregulated finance app, that sends the message that Aave is somehow responsible for funds it doesn't centrally control.
Notwithstanding, every bit of development that pushes crypto to more people is a welcomed development and the Aave app launch is a much awesome addition!