A couple of days ago, some old classmates who don’t play with crypto asked me: “That on-chain finance thing you’re into, how does it actually make money? Bank interest rates are pathetically low, Yu’e Bao isn’t working anymore either, so how are you pulling off double-digit annual returns?”

That’s a great question. Today, let’s break it down: when it comes to DeFi stablecoin yields versus traditional financial products, which one is really better?

**When it comes to yield, the gap is huge.**
Regular bank savings? You’re capped at 0.2%. A one-year fixed deposit tops out at 1.5%. Yu’e Bao is just over 2% now, and it keeps dropping. The synthetic dollar protocol I use has yields that fluctuate between 10% and 20%. Just looking at the numbers, on-chain finance absolutely crushes traditional products.

**But when it comes to money, you can’t just look at returns.**
Bank deposits are insured up to 500,000 RMB, so you can relax with your eyes closed. In theory, money market funds can lose money, but in practice, they never have. DeFi? Smart contracts could have bugs, the project team could run off with the funds, and extreme market conditions can blow everything up. The risk level isn’t even in the same league.

**Liquidity is another thing to consider.**
Bank savings and money market funds? Withdraw anytime, instant arrival. DeFi protocols depend on specific designs—some allow instant redemption, some require you to queue up and wait. Worst of all, if there’s a market panic, liquidity can dry up in an instant and you might not be able to get out even if you want to.

**The barrier to entry is also pretty discouraging.**
Traditional finance? All you need is a bank card—your grandma can use it. DeFi? You need to know how to set up a wallet, switch networks, calculate gas fees… For an average person, just learning all this is overwhelming.

As for regulatory protection