How to Calculate DeFi Lending Rate Comparison

What is DeFi Lending Rate Comparison?

The DeFi Lending Rate Comparison Calculator provides real-time comparison of supply (lending) and borrow rates across major DeFi protocols like Aave, Compound, and MakerDAO, helping users optimize yield or minimize borrowing costs.

Formula

Net Lending APY = Supply APY + Reward Token APY - Gas Cost / Principal

SA: Supply APY (%) — Base interest rate earned by lenders
BA: Borrow APY (%) — Interest rate charged to borrowers
RA: Reward APY (%) — Additional yield from governance token incentives
U: Utilization (%) — Percentage of deposited assets currently borrowed

Step-by-Step Guide

1Select the asset you want to lend or borrow (USDC, ETH, WBTC, etc.)
2Compare current supply rates and borrow rates across Aave V3, Compound V3, and others
3Factor in any additional governance token rewards (COMP, AAVE) that boost effective APY
4Account for gas costs on deposits, withdrawals, and reward claims to get net APY

Worked Examples

Input

$50K USDC lending, Aave 4.2% supply + 0.3% AAVE rewards, Compound 3.8% supply + 0.5% COMP rewards

Result

Aave effective = 4.5%, Compound effective = 4.3% — Aave wins by 0.2% ($100/year on $50K)

Input

Borrowing 5 ETH, Aave borrow rate 2.8%, Compound 3.1%

Result

Aave saves 0.3% annually on the borrow = 0.015 ETH/year

Common Mistakes to Avoid

✕Comparing raw supply rates without including reward token incentives
✕Not checking utilization rates — high utilization means rates will spike and you may not withdraw
✕Ignoring the difference between variable and stable borrow rates

Frequently Asked Questions

Why do DeFi lending rates change constantly?

DeFi rates are algorithmically determined by supply and demand (utilization rate). When more people borrow, rates increase to attract more lenders. When borrowing decreases, rates drop. This happens in real-time, block by block.

Is DeFi lending safe?

Major protocols like Aave and Compound have billions in TVL and years of security track record, but risks remain: smart contract bugs, oracle manipulation, and liquidation cascades. Use only audited, battle-tested protocols.

Ready to calculate? Try the free DeFi Lending Rate Comparison Calculator

Try it yourself →