CeFi High-Yield vs DeFi Lending
**CeFi high-yield** accounts and CDs offer insured (within limits) simplicity. **DeFi lending** can quote higher APYs but adds smart-contract, oracle, and stablecoin depeg risk—net yield depends on fees, gas, and token volatility.
Step by step
1. Normalize to APY
Compare compounded yields on the same holding period.
2. Subtract risk haircut
Model contract exploits, freezes, and emission dilution.
3. Tax and gas
On-chain interest creates taxable events and claim costs.
CeFi vs DeFi yield
Higher headline DeFi APY often compensates for risks CeFi underwrites.
- CeFi / HYSA: FDIC/SIPC-style protections (limits apply); instant ACH in many cases.
- DeFi lending: Non-custodial options; variable rates; composable but complex.
Use our calculators
Common mistakes
- Chasing promotional APY
- Ignoring withdrawal queues or lockups
FAQ
Is DeFi yield risk-free at high TVL?
No—exploits and governance failures still occur on large protocols.