Since the Binance hot-wallet incident, Binance has launched a “Community Appreciation” campaign offering some users more than 10% on USDC. I've also seen other exchanges promoting high stablecoin APYs to steal customers who put their money on Binance.
Meanwhile, USDT and USDC supply rates on major DeFi platforms like Aave and Morpho seem to be around 3–6% in many markets, although they change with utilization and market conditions.
It’s not an apples-to-apples comparison. CEX promotions can have bonus tiers, caps, eligibility requirements and end dates, while DeFi comes with its own risks, including smart contract risk and variable rates. Still, the gap has me wondering about the longer-term outlook for DeFi lending.
- Is this just a short-term competition for deposits that fades when the promotions end?
- Will lenders move to CEXs for the higher rates and then return to DeFi?
- What would make you choose DeFi lending over a higher yield on an exchange: self-custody, transparency, flexibility, or something else?
Disclosure: I currently work for a fixed-term lending protocol. I’m interested in hearing outside perspectives, not pitching a product. Happy to hear disagreement.
Where are you putting your stablecoins right now, and how do you weigh the yield against the risks?
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