The crypto yield pitch was simple: accept smart contract risk, earn more than with a bank. It doesn’t work like that anymore.

Nowadays, Aave, the largest DeFi lending protocol by deposit base, offers just 1.84% on the world’s largest stablecoin, USDT, and an equally dismal 2.61% APY on the Coinbase-Circle stablecoin USDC.

Lido, the largest Ethereum liquid staking service, returns just 2.53%. 

By contrast, Interactive Brokers pays 3.14% on idle cash with no lockup and zero crypto exploit risk. Another basic high-yield savings account at Axos Bank pays 4.21%.

The risk premium that justified DeFi’s existence has inverted.

Many of DeFi’s flagship products now pay less than a federally insured deposit account….