BlockFi and AAVE Overview
BlockFi is a centralized lending platform that offers over 15 cryptocurrencies and up to 15% annual interest on digital assets. It is the largest CeFi crypto interest account in the world, with over $3 billion in cryptocurrencies deposited on its platform.
AAVE on the other hand is a decentralized lending application that is deployed on Ethereum, Avalanche, Optimism, Arbitrum, Polygon, and other networks. AAVE is the largest liquidity protocol and lending platform in the world with over $9 billion in assets locked across 13 different cryptos.
AAVE vs BlockFi: Best Crypto Interest Rate
BlockFi offers slightly higher yields than AAVE when you compare major coins like Bitcoin, Ethereum, AVAX, USDC, AAVE, and other high market capitalization assets. That said, for the higher yield on BlockFi, you are also taking on considerably more risk, so you will need to weigh that up in your decision-making.
Crypto Interest Accounts: Decentralized vs Centralized
Since the collapse of Terra (LUNA), Three Arrows Capital, Celsius, Voyages, and most recently BlockFi - it is clear that the decentralized model for crypto apps is superior. The main issue with centralized lending platforms is that their agreements and yield-generating methods are not verifiable on-chain.
This means that they could be taking excessive risk and be over-levered, which could result in an implosion like the recent Celsius debacle. Centralized platforms also have the ability to arbitrarily pause withdrawals, which restricts users' access to funds. Decentralized applications do not have this functionality and require governance from token holders.