What a bank would do — and what you do instead
A bank pays you interest on savings and lends your deposit out behind the scenes, with deposit insurance as a backstop. On-chain, you can see the lending directly: you supply stablecoins, borrowers pay interest, and the rate moves with demand. You keep custody of the position and can usually exit any time, but you also take on the risks a bank and its insurer would normally absorb. That is why every rate here is dated, labeled variable and compared with an insured baseline.
The four options
| Option | How it works | May 2026 30-day range (variable) |
|---|---|---|
| Aave V3 | Large pooled market; many assets; ~$14.6B TVL | USDC 3.8–5.2% |
| Morpho vaults | Curated vaults allocate to isolated markets | USDC 4.1–6.8% |
| Compound V3 | One borrowable base asset per market; ~$1.8B TVL | USDC 3.6–4.9% |
| Spark / sUSDS | Savings rate on Sky’s USDS, set by governance | Spark 3.9–4.7% |
Aave
Aave is the largest lending protocol. Its eMode lets borrowers reach up to 97% LTV on correlated assets, which supports demand for stablecoin loans. Aave has come through past crashes without lender losses, though that is history, not a guarantee. Rates on L2 deployments are often 0.5–1.5 points above mainnet.
Morpho
Morpho separates markets into isolated pairs and lets “curators” build vaults on top. That can produce higher rates, but you are also trusting the curator’s choice of collateral and limits. Coinbase’s bitcoin-backed loans run on Morpho on Base.
Compound
Compound launched in 2018 and released V3 (“Comet”) in August 2022. Each V3 market has a single borrowable base asset, which keeps risk contained. Some markets add COMP rewards on top of interest.
sUSDS
sUSDS is not a borrower-to-lender market you choose directly. You hold USDS in a savings module and receive a rate set by Sky governance, funded by the protocol’s revenue. It is simpler, but you take on USDS’s own design and governance risk.
Frequently asked questions
Which one is safest?
There is no single answer. Track record, audits, TVL and how risks are isolated all matter. Our Risk Center scorecard is a starting point.
Why are Morpho rates sometimes higher?
Vaults can lend into riskier or less liquid markets. Higher rate usually means more risk somewhere.
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