Risks of earning interest on crypto

The largest stablecoin (about USD 184 billion), with very high liquidity. However, its reserves include a significant share of BTC, gold and loans, are only attested quarterly, and S&P rates its peg stability as 'weak'. USDT is not licensed in the EU or the US.

Reserves are almost entirely cash, Treasury bills and repo, attested monthly; the issuer is licensed in the EU (MiCA), New York and by the OCC. The main risk is the banks holding reserves, as in the depeg to USD 0.87 when SVB collapsed in 2023.

Backed by cash and US Treasury bills, held in custody at BitGo, with monthly attestations. It is a new coin (2025), supply is very highly concentrated on Binance, there are political factors, and its OCC licence is only at the preliminary stage.

Circle's euro-pegged stablecoin, with reserves entirely held as deposits at regulated financial institutions and attested monthly by Deloitte; the issuer is a crypto-asset institution licensed in France under MiCA. It remains small in scale, at around EUR 400 million.

Backed by cash and US Treasury bills with monthly attestations, but the issuer is based in the BVI and has no stablecoin licence. Its size has shrunk sharply and it depegged to about USD 0.87 in 2025.

A decentralised stablecoin with no licensed issuer that cannot be frozen, overcollateralised by crypto, USDC and real-world assets. Being gradually replaced by USDS; it depegged to USD 0.88 along with USDC in 2023.

Ethena's USDe is a synthetic dollar: backed by hedged crypto derivatives, stablecoins, and loans rather than cash. It has no licence; BaFin required Ethena to withdraw from the EU in 2025. It once fell to USD 0.65 on Binance (10/2025).

The oldest and largest digital asset, with no organisation controlling supply. Only two serious consensus incidents, in 2010 and 2013.

The largest smart contract platform, with decentralised supply. The network has never stopped producing blocks.

Closely tied to Binance: supply is highly concentrated in CZ and Binance, and the BSC network was deliberately halted in 2022. The SEC lawsuit was dropped in 2025.

Large ecosystem, with ETFs in the US. The network has halted 7 times, most recently in February 2024; validators remain concentrated in infrastructure.

Closed its dispute with the SEC in 2025 and has ETFs in the US, but Ripple still controls about 1/3 of supply. XRP Ledger had two brief halts in late 2024 and early 2025.

The largest network for USDT circulation, but power is highly concentrated: Justin Sun is believed to hold most of the supply and only 27 validators produce blocks.

Long-standing meme coin (since 12/2013), using merged PoW mining with Litecoin, with no network outages to date. Supply is uncapped (around 5 billion DOGE per year) and market capitalization currently ranks 12th.

The world's largest exchange, licensed in Dubai (VARA) and Abu Dhabi (ADGM), with a SAFU fund of ~USD 1 billion. From 1/7/2026 it stopped Earn and new deposits for EU customers as it lacks MiCA authorisation; the US DOJ is investigating (per Bloomberg, no charges yet).

Monthly proof of reserves (135% ratio), protection fund of ~USD 382 million held in BTC. Only an AUSTRAC registration, no major licence; no MiCA, so it does not accept new EU customers, and it is withdrawing from Japan.

Holds MiCA (Austria) and SCA (UAE) licences. Hacked for USD 1.46 billion in 2025 (the largest in history) but fully covered within ~72 hours, with no interruption to withdrawals. No dedicated user protection fund.

Monthly proof of reserves (verified by Hacken), fully covered the 2020 hack. Its MiCA (Austria) and Thailand licences are both under an operating ban / suspension, so in practice only the AUSTRAC registration remains; Dubai issued a cease order (3/2026). Pleaded guilty in the US in 2025.

A DCG-owned exchange focused on Africa and Southeast Asia: licensed by the FSCA (South Africa), SC (Malaysia), OJK (Indonesia), and BMA (Bermuda); monthly proof of reserves verified by Moore. It has closed accounts in some regions since 1/9/2026.

Holds MiCA (Malta), VARA (Dubai), MAS (Singapore) and multiple US state licences; monthly proof of reserves checked by Hacken. Does not disclose a user protection fund.

Operating since 2013 (formerly Bter), holds MiCA (Malta), VARA (Dubai), registrations in Japan and Australia, and licences in multiple US states. Proof of reserves was irregular in the first half of 2026; compensation for the 2015 and 2018 hacks could not be verified.

A long-established exchange (since 2013), with MiCA (Ireland), a Wyoming SPDI bank, and multiple other licences; quarterly proof of reserves by an independent accounting firm. It has never lost customer funds; Dubai is only a preliminary approval.

Centralised crypto lending platform: Nexo lends out deposited assets, so depositors take on additional credit risk. Published rates are for the Platinum tier (≥10% of the portfolio in NEXO), and the portfolio must exceed USD 5,000 to earn interest. Only an auditor's reserve attestation, no Merkle.

Indonesian exchange owned by Binance, licensed by OJK. Merkle + zk-SNARK proof of reserves is disclosed irregularly (most recently 1/1/2026), with no third-party confirmation. No publicly disclosed user protection fund.

No licence from any major regulator; the Seychelles regulator (where the operating entity is based) took enforcement action for unlicensed activity and said it cannot help recover funds. Has monthly proof of reserves and a USD 100 million Guardian fund.

A US-listed exchange, with BitLicense (New York), MiCA (Luxembourg), and MAS (Singapore). It does not publish proof of reserves, only audited financial statements. It reimbursed scammed customers following the 5/2025 data breach.

Has MiCA (Malta), VARA (Dubai), and MAS (Singapore). There is no current proof of reserves: the only report was Mazars' 12/2022 report. It fully compensated the USD 34 million hack in 2022.

Sanctioned by the UK (5/2026) and banned from trading by the EU from 23/8/2026 under the Russia sanctions package. No licence from any major regulator; the press found proof of reserves that did not match on-chain balances.

Indonesian exchange licensed by OJK, with assets held in custody at ICC and Fireblocks. No currently valid proof of reserves (the only instance was in 2022), and no publicly disclosed user protection fund.

Indonesian exchange (formerly Rekeningku) licensed by OJK, with crypto assets held in custody at ICC. It does not disclose proof of reserves and has no publicly disclosed user protection fund.

Indonesia's largest exchange, licensed by OJK. Its hot wallet was hacked for ~USD 22 million (9/2024); the exchange said user balances were unaffected, but there has been no independent confirmation. The most recent proof of reserves is from 1/2023. Police and OJK are reviewing complaints of asset losses.

A Nigerian exchange, approved in principle by Nigeria’s SEC (ARIP) since 8/2024, but not yet fully registered. It does not publish proof of reserves and has no publicly disclosed user protection fund.

The largest lending protocol in DeFi, audited by multiple firms. Two incidents in 2026 (CAPO oracle, bad debt from Kelp's rsETH) were both covered by the DAO and the DeFi United alliance, and markets returned to normal.

Each Compound III market lends only one base asset. It was affected by the collapses of deUSD (11/2025) and rsETH (4/2026); bad positions were liquidated and no depositor losses have been recorded.

A major liquid restaking protocol (eETH/weETH) since 3/2023, audited by multiple firms, with upgrades subject to a 10-day timelock. There have been no incidents involving eETH/weETH; the 9/2026 exploit affected only an old ether.fi Liquid contract, with losses of approximately USD 43 thousand.

JitoSOL liquid staking token on Solana, live since 11/2022, no incidents recorded.

The largest ETH staking protocol (stETH), live since 12/2020, audited by multiple firms. Only a few validator slashing events with very small losses recorded.

Decentralised ETH staking (rETH) since 11/2021; node operators must post a bond. No protocol incidents.

Sky (formerly MakerDAO) has issued DAI/USDS since 2017–2019. The only major incident was "Black Thursday" in 3/2020; DAI holders were not affected.

sUSDS/sDAI savings deposits via Spark, earning the Sky Savings Rate set by Sky governance. No incidents recorded.

A fork of Aave V3 with DAI/USDS liquidity from Sky, live since 5/2023. No incidents recorded; it removed rsETH before the Kelp incident.

USDe is a synthetic dollar (not a cash-backed stablecoin); sUSDe yield comes from perpetual futures funding. No contract incidents; live since 2/2024.

A Solana lending protocol built on the Fluid architecture, launched 8/2025 (over 1 year). No incidents recorded.

The largest lending protocol on TRON (a Compound V2 fork), operating since 12/2020, with no incidents recorded. The lending segment has only 1 public audit (CertiK, 2022), and governance depends on the JST token and is closely tied to the Justin Sun ecosystem.

A large lending protocol on Solana, live since 11/2023, with no incidents or bad debt recorded.

Unsecured/secured lending to institutions (syrupUSDC/USDT). In 2022 borrower Orthogonal Trading defaulted on USD 36 million in an old pool, and lenders recovered only part.

Liquid SOL staking (mSOL) since 8/2021, no contract incidents. TVL is now about USD 260 million.

Morpho's core contracts have not been exploited; all incidents were in isolated markets/vaults managed by curators (Stream/xUSD 11/2025, USR 3/2026, rsETH 4/2026). Actual risk depends on the vault you choose.

A modular lending vault platform, launched in 8/2024, audited by many firms and offering a bug bounty of up to USD 7.5 million. Third-party curator vaults incurred bad debt from xUSD (11/2025); Euler v1 was hacked for USD 197 million in 2023, but users were fully reimbursed.

A shared liquidity layer for lending, vaults and DEX. Bad debt from the Resolv USR exploit (3/2026) was absorbed by the treasury, the team and Resolv; the reward distribution key leak (5/2026) was small and covered.

Morpho-style isolated lending markets on BNB Chain, launched 4/2025. The Resolv incident (3/2026) was repaid 1:1 with no losses.

The oldest lending protocol on BNB Chain, but it has repeatedly incurred bad debt from price manipulation of illiquid assets; it could not be confirmed that the THE incident (3/2026) has been fully covered.

Aave's new version under a Hub-and-Spoke model, running on Ethereum since 30/3/2026 (Avalanche since 7/2026), audited by multiple firms, with no incidents recorded. The new code is under 1 year old, and initial limits remain low.