DeFi lending and staking are two fundamentally different ways to earn yield on crypto – and choosing between them depends on what assets you hold, how much flexibility you need, and what risks you're comfortable with.
DeFi lending earns you variable interest by supplying assets to borrowers through protocols like Aave v3, Compound, and Morpho Blue. Staking earns you fixed-rate rewards for helping secure a proof-of-stake blockchain like Ethereum. Lending works with almost any token. Staking only works with PoS network tokens like ETH, SOL, or ATOM.
Most experienced DeFi users do both – and the smartest ones combine them. But before you can combine strategies, you need to understand what makes each one tick.
What is DeFi Lending?
DeFi lending means depositing your crypto into a protocol's liquidity pool so borrowers can take out collateralized loans against it. In return, you earn a share of the interest borrowers pay.
The key mechanics:
- You supply assets (ETH, USDC, WBTC, stETH – almost anything with demand) to a lending pool
- Borrowers put up collateral – typically 150% or more of their loan value – and pay interest to access your liquidity
- You earn variable APY that fluctuates based on supply and demand. When borrowing demand spikes, your rates go up. When demand drops, rates fall
- You can withdraw anytime – there's no lock-up period on most lending protocols
Rates on stablecoins like USDC typically range from 3-8% APY. Volatile assets like ETH or WBTC tend to earn less – often 1-4% – because borrowing demand for those assets is lower.
Superlend is a non-custodial aggregator that connects you to 350+ money markets across 11+ chains, making it straightforward to compare lending rates across Aave v3, Compound, Morpho Blue, Euler v2, and others from a single dashboard. For a deeper walkthrough, read the complete guide to DeFi lending.
What is Staking?
Staking means locking up a proof-of-stake token to help validate transactions on its network. In exchange, the network pays you newly minted tokens as a reward.
Staking is fundamentally different from lending: you earn inflation-based rewards from the network itself, not interest from borrowers. This makes staking yields more predictable but also more rigid.
Direct staking on Ethereum requires 32 ETH and technical setup. For most users, liquid staking is the practical alternative. Protocols like Lido and Rocket Pool let you stake any amount of ETH and receive a liquid staking token (LST) in return – stETH, rETH, or cbETH.
These LSTs represent your staked ETH plus accumulated rewards. They trade close to the value of ETH and can be used across DeFi – including as collateral for lending.
Current ETH staking yields sit around 3-4% APY. This rate is set by the Ethereum network's validator economics, not by market demand, so it changes slowly and predictably compared to lending rates.
Head-to-Head: Lending vs Staking
Here is how the two strategies compare across the dimensions that actually affect your decision.
Yield Potential
- Lending: Variable, driven by borrowing demand. Stablecoin lending typically earns 3-8% APY; volatile assets earn 1-4%. Rates can spike above 10% during high-demand periods but can also drop below 2% when markets are quiet
- Staking: More predictable, driven by network economics. ETH staking currently earns around 3-4% APY. Changes are gradual – you won't see dramatic spikes or crashes in staking yield
- Verdict: Lending has a higher ceiling, staking has a more stable floor. If you want consistency, staking wins. If you're willing to actively monitor and switch protocols for the best rates, lending can outperform
Risk Profile
- Lending: Smart contract risk from the lending protocol, liquidation risk for borrowers (not lenders – your principal is safe unless the protocol itself fails), and utilization risk where very high pool utilization can temporarily delay withdrawals
- Staking: Slashing risk if validators misbehave (very rare – under 0.04% of Ethereum validators have been slashed), smart contract risk from liquid staking protocols, and a depeg risk where LSTs could temporarily trade below ETH's value during extreme market stress
- Verdict: Both carry smart contract risk. Staking adds slashing and depeg risk. Lending adds protocol-level insolvency risk. Neither is categorically "safer" – they have different failure modes. For more on evaluating DeFi safety, see is DeFi lending safe
Liquidity and Flexibility
- Lending: Fully liquid. You can withdraw supplied assets at any time from most protocols – no waiting period, no unstaking queue. The only exception is during periods of extreme utilization when nearly all deposited funds are borrowed out
- Staking: Less liquid. Direct staking involves an unstaking queue that can take days. Liquid staking tokens (stETH, rETH) solve this by being tradeable on secondary markets, but you may take a small price hit if you need to exit quickly during a market downturn
- Verdict: Lending is more flexible. If you need fast access to your funds, lending wins clearly
Asset Options
- Lending: Works with dozens of tokens – stablecoins (USDC, USDT, DAI), ETH, WBTC, LSTs (stETH, rETH, cbETH), and many others. If there's borrowing demand for a token, there's usually a lending market for it
- Staking: Limited to proof-of-stake network tokens. You can stake ETH, SOL, ATOM, DOT, and other PoS tokens – but you cannot stake USDC, WBTC, or any token that doesn't secure a blockchain
- Verdict: Lending is far more versatile. If you hold stablecoins or WBTC, lending is your only option for earning yield without swapping assets
Complexity
- Lending: Straightforward. Connect wallet, choose asset and protocol, deposit. The main complexity comes from comparing rates across protocols – which is exactly what Superlend simplifies
- Staking: Simple for liquid staking (deposit ETH, receive stETH). Direct staking is significantly more complex, requiring 32 ETH and validator node management
- Verdict: Both are accessible through liquid staking and lending aggregators. Lending across multiple protocols is more complex to optimize manually but easier with tools like Superlend
When to Lend vs When to Stake
The right choice depends on your situation. Here is a practical decision framework.
Lend your crypto when:
- You hold stablecoins or non-PoS tokens. USDC, USDT, WBTC, and similar assets can't be staked. Lending is how you put them to work
- You need immediate liquidity. Lending lets you withdraw anytime without waiting for an unstaking queue
- You want to chase higher short-term yields. Lending rates can spike significantly during bull markets and high-demand periods. If you're willing to actively move between protocols, you can capture these opportunities
- You want diversified exposure. You can lend across multiple protocols and chains simultaneously, spreading risk. Our stablecoin yield strategies guide covers this approach in detail
Stake your crypto when:
- You're a long-term ETH holder. If you plan to hold ETH for years regardless of price, staking earns a steady yield on an asset you'd hold anyway
- You want predictable returns. Staking yields change slowly. You won't wake up to find your APY cut in half overnight
- You don't need to move funds quickly. If you can tolerate the unstaking queue or are happy holding an LST, the predictability of staking rewards may outweigh the flexibility of lending
Do both when:
- You want maximum capital efficiency. The most interesting strategy combines staking and lending – covered in the next section
The "Both" Strategy: Stake, Then Lend
Here is where things get interesting. You don't have to choose one or the other.
The combination strategy works like this:
- Stake your ETH through a liquid staking protocol like Lido or Rocket Pool
- Receive an LST – stETH, rETH, or cbETH – that earns staking rewards automatically
- Lend that LST on a protocol like Aave v3 or Morpho Blue to earn lending interest on top of your staking rewards
This effectively earns you double yield: the base staking reward (around 3-4% APY) plus the lending interest on the LST (often 0.5-2% additional APY, sometimes more during high demand).
For example, if you hold stETH earning 3.5% staking APY and lend it on Aave v3 for an additional 1% supply APY, your effective yield is roughly 4.5% – meaningfully better than either strategy alone.
The extra risks are also layered: you're now exposed to the staking protocol's smart contract risk, the LST's depeg risk, and the lending protocol's smart contract risk. This stacking of risks is important to understand, but each individual layer uses established, audited protocols.
Superlend makes this strategy practical by letting you compare where your LSTs earn the most lending interest. Instead of manually checking stETH and rETH rates across Aave v3, Morpho Blue, Compound, and Euler v2 on every chain, you see all the rates in one view. For more on ETH-specific strategies, check out the ETH lending rates guide.
How Superlend Helps You Decide
Whether you lend, stake, or combine both strategies, the hardest part is comparing opportunities. Rates differ across protocols, chains, and assets – and they change constantly.
Superlend is a non-custodial DeFi lending aggregator that solves this by connecting you to 350+ money markets across 11+ chains. Here is what that means in practice:
- Compare lending rates instantly. See what USDC, ETH, stETH, rETH, WBTC, and other assets earn across Aave v3, Compound, Morpho Blue, Euler v2, and more – sorted by APY, TVL, or risk profile
- Find where to lend your LSTs. After staking ETH and receiving stETH or rETH, use Superlend's Discover page to find which protocol and chain offers the best lending rate for your specific LST
- Execute directly from one dashboard. No need to visit each protocol separately. Compare, choose, and deposit from Superlend – your funds go directly to the underlying protocol. Superlend never controls your assets
- Track everything in one place. Monitor your positions across protocols and chains from a single portfolio view
If you're focused on stablecoins specifically, SuperFund in the Vaults section on Superlend automates yield optimization across lending protocols – effectively handling the "protocol hopping" strategy for you.
The Bottom Line
DeFi lending and staking serve different purposes. Lending gives you flexibility, works with virtually any token, and lets you chase variable yields across protocols. Staking gives you predictable rewards on PoS tokens with less need for active management.
For stablecoin holders, lending is the clear path – staking isn't an option. For long-term ETH holders, the smart move is often to do both: stake for the base yield, then lend the LST for extra returns.
Whatever strategy you choose, comparing rates is the single highest-leverage action you can take. A 2% rate difference compounded over a year is significant – and with 350+ markets across 11+ chains, those differences exist constantly. Explore current rates on Superlend to see what's available right now.
Rates are variable and subject to change. Past performance does not guarantee future results. Not financial advice. DeFi involves risks including smart contract vulnerabilities. DYOR.