- Aave has announced a new savings app designed for mainstream users with crypto details removed from the interface.
- The app will offer up to $1 million in “Balance Protection” coverage, focusing on specific risks like security breaches.
- The total value locked (TVL) in Aave currently exceeds $30 billion, making it the largest platform in decentralized finance (DeFi) lending.
- The new app supports transfers to and from over 12,000 banks and cards, enabled by Push’s MiCA approval in Ireland.
- Critics question the scope and conditions of the insurance policy, noting exclusions like bad debt and limited eligibility.
Aave, a leading decentralized finance (DeFi) lending protocol, announced on Monday the launch of a savings app aimed at mainstream users by removing visible crypto references. The app features a “Balance Protection” insurance policy reportedly covering up to $1 million, intended to reassure new users.
Currently, Aave holds over $30 billion in total value locked (TVL), marking it the largest DeFi lending platform. The new app, styled more like a traditional neobank, plans to integrate transfers from over 12,000 banks and cards. This functionality follows the recent approval of Push, a subsidiary of Aave Labs, as a Crypto Asset Service Provider under the EU’s MiCA regulation in Ireland, as outlined in their official blog.
Members of the Aave community have described this development as “Aave’s iPhone moment,” highlighting the combination of user-friendly design with on-chain transparency as a key feature to attract non-crypto users. Despite this optimism, some experts remain skeptical of the insurance offering.
The “Balance Protection” insurance is designed to cover specific loss events such as security breaches and technology failures but notably excludes coverage for bad debt, a significant risk in DeFi when collateral liquidation falls short. The app’s website notes that the insurance is for “eligible customers”, with full terms and eligibility details promised at launch. Critics, including Nick Cannon of Gauntlet and Luke Chmiel of Cork Protocol, have described the coverage as narrow and questioned comparisons to traditional bank deposit insurance. They emphasize that the policy is limited in scope and subsidized for a limited period.
Additionally, questions have been raised about the insurer named Relm, linked to Deltec International and the former insurer of collapsed entities FTX US and FTX Australia. Although Relm holds a strong rating, some observers express concern over its credibility due to its history. More information is expected following responses from Aave.
The announcement also revealed a brief privacy issue involving the referral system, which reportedly exposed users’ names. Aave founder Stani Kulechov confirmed that the problem was fixed shortly after it was reported. Traditional Aave users will not have access to the insurance coverage without completing know-your-customer (KYC) verification. Nonetheless, governance delegate Marc Zeller reassured that Aave’s core protocol remains permissionless and unaffected by the new app’s KYC requirements.
For more information, visit the Aave app website.
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