As mentioned above, rates differ because of trust, supply and demand. The more trust in the system, the lower the interest (such as with Compound and Aave). Also, if there needs to be more liquidity, the interest rates would be higher to incentivize people to lock up their money, and vice versa when they don’t need as much.
Does anybody know how reliable BlockFi is?
Not financial advice: I have few btc and eth for little bit more than a year, their staking is quite nice, withdrawals must be done through a request, which can take over 48hours.
I have a very tiny portion of my funds on them just to get a little bit of their nice APY, but remember that there is always a possibility that they go into troubles, and that mean that your money is on troubles too.
Carlos Z
Hi Carlos,
Yes, I’m thinking maybe I should put a small portion into BlockFi. I’m afraid of vulnerabilities in the code, but may be worth a try. Thank you!
Different rates are due to the supply and demand, and this is why early projects will have a crazy high rate because they are drawing in liquidity and as it comes in, the rate decreases. I think a really great example of this at the moment is the LOOKS token for looksrare that have a staking (i know this is different form lending but same idea) rate of over 600%. As more people stake, this rate can not be honored and will decrease until an equilibrium is met.
i agree! as well as the market cap. The higher it goes, the less drastic the changes in rates, assuming steady activity on the protocol.
The highest USDC rate that was mentioned in the video was 7.85% through the Cream lending platform, compared to today’s rate on DeFirate at 8.5% through the BlockFi lending platform. I believe these rates are higher now because the amount of borrowers of the USDC coin have increased since the video was made. Thus, the more borrowers will increase the yield percentage given to the lender.
Before i start to answer, i would like to say that the link that Josh provided is broken…
I think the differences arise from the supply/demand ratio, lending/borrowing. I’m usually a Solana DeFi user, and Francium is really displaying those numbers nicely. The higher the utilisation, the higher APY.
Rates on DeFi protocols vary depending on a few variables.
the more risk involved in a protocol the more incentive there will be to use it, due to the rates offered being higher.
DeFi protocols are just like any business in a sense, they are competing for customers, through means of services they provide to the user, such as easier accessibility through their software and the user interface, as well as brand recognition and a stable reputation for security, which is why the bigger projects with well known teams that have a higher level of security on their smart contracts tend to have lower rate due to more users.
Defipulse must have updated or I’m not conversed how to move about on these websites. I can’t find the rates stated in there and the link below the video show a “404 Error”.
I checked the last link like someone else. https://defirate.com/
Previous:
AAVE 2.91%
Cream 2.6%
Compound 2.44%
dYdX 2.23%
When I looked (21/02/2022):
AAVE 2.22%
Cream —
Compound 2.38%
dYdX 0%
AAVE and Compound fairly similar, slightly down. Cream somewhat disappeared and dYdX dropped to 0%.
The market has gone down a fair bit in the last couple months and only slowly builds up again. I suppose that effects the market value and put a lot of users into wonder and pausing activity to a certain degree.
That’s pure speculation as I don’t understand much of the financial world and crypto yet and hence make a judgement based on common sense.
I got a 404 with the defipulse link as well.
I looked at the lending rates here https://defirate.com/lend/ and saw that lending rates are around 5-8%. And in some cases even higher. I’m guessing that those are short-term situations as demand spikes in different crypto exchanges.
Indeed, defipulse has renew his interface, we already update the link on the lesson so it should be working again 
Sorry for the inconveniences guys, and thank you for notifying it.
Carlos Z
The market has dipped recently, market cap dropped(liquidity) this in turn effects rates available as the market consolidates.
looking at DeFi Pulse rates of various crypto and comparing them to the rates mentioned in the video, protocols with good fundamentals,
e.g creating a bridge to other networks enabling better accessibility for customers have been able to create stronger stability. monetisation of their supply and demand ratios helps them control their liquidity.
thanks for straight/short breakdown.
thanks.
I have always rated Blockfi
I guess a good thing to note is that the whole DeFi space got a lot of stable blockchains and platforms to use, nonetheless it’s still “early days”. Even big banks can be hacked and there can be unexpected crisis causing havoc, just like now. There is war in Ukraine caused by Russia, which is causing a lot of fluctuations in different departments of different countries.
I would say though as I sometimes have a though time to get into it, that there is no replacement for practical experience. There are a lot of very save platforms to start with and as you build knowledge and confidence, all the while having an awareness of the risk factor, then you can really start understanding and working within the DeFi spaces. That’s at least my take away. Good to invest a little (no financial advise) into something that you are not to afraid of loosing just for the experience, till you are ready for more if so desired.
All rates seems a little lower which over time is understandable as there is gravitation to the mean after initial over exhuberance so I expected that. But I did actually think there might have been a raising of rates or even a spike with the crisis in Ukraine, I thought there may have been some risk on indicators here, but thats markets for you, if the they did what we expected we’d all be rich.
And the crypto price market is also erratic, but as I say thats markets, predicting the longer trends is easier than the timing.
Rates are influenced by perceived risk as well as by supply and demand.
Wow, that seems low to me now. It will have to go higher than that to even keep up with inflation. Perhaps it’s only a matter of time before major CEXes begin dealing in stablecoins pegged to other currencies.
There is money to be made in DeFi but there’s always a learning curve; in order to learn something you must be willing to fail, which in this case means losing money, which no one prefers to do.