Arch charges 7.75%–9% APR with a 1.49% origination fee using custodial (anchorage, qualified custodian). Aave charges ~4.4% (variable) APR with $0 origination fees using smart contract (wrapped btc via custodial bridge). See the full breakdown of rates, thresholds, and custody risk below.
Rates verified 2026-06-09
Aave advertises a lower headline rate at ~4.4% (variable) compared to Arch's 7.75%–9%. On a $1M loan held for 12 months, Aave saves $50,900 in total first-year cost (interest plus origination fees). From a custody perspective, Aave presents lower counterparty risk with its smart contract (wrapped btc via custodial bridge) model.
Arch offers tiered rates that decrease with larger loan amounts, while Aave charges a flat rate regardless of loan size. Total year-1 cost includes both annualized interest and any origination fees charged upfront.
| Loan Size | Arch APR | Aave APR | Arch Total Year-1 Cost | Aave Total Year-1 Cost | Savings |
|---|---|---|---|---|---|
| $100,000 | 9% | 4.4% | $10,490 | $4,400 | $6,090 with Aave |
| $250,000 | 8.5% | 4.4% | $24,975 | $11,000 | $13,975 with Aave |
| $500,000 | 8.5% | 4.4% | $49,950 | $22,000 | $27,950 with Aave |
| $1M | 8% | 4.4% | $94,900 | $44,000 | $50,900 with Aave |
| $5M | 7.75% | 4.4% | $462,000 | $220,000 | $242,000 with Aave |
Total year-1 cost includes annualized interest plus origination fees. Arch: 1.49% origination fee. Aave rates are variable; the table uses a representative recent rate. Rates sourced from each lender's public rate pages as of 2026-06-09.
Arch and Aave take fundamentally different approaches to collateral custody. Arch uses Custodial (Anchorage, qualified custodian). Your Bitcoin is held by Arch and could be at risk in the event of a hack, insolvency, or regulatory action. Aave holds collateral in audited smart contracts rather than with a single lender, but borrowing requires wrapped Bitcoin (WBTC or cbBTC) — your underlying BTC is held by the wrapper's custodian (BitGo/BiT Global for WBTC, Coinbase for cbBTC), reintroducing custodial bridge risk. Smart-contract and oracle risk also apply.
Arch triggers margin calls at 70% LTV and liquidates at 80% LTV. Aave has no margin-call mechanism: positions become liquidatable automatically the moment LTV crosses 78%, with no warning threshold or response window. Arch gives borrowers 24 hours to respond to a margin call before any collateral is sold.
| Threshold | Arch | Aave |
|---|---|---|
| Max Starting LTV | 60% | 73% |
| Margin Call | 70% LTV | None |
| Margin Call Window | 24 hours | None — automated liquidation |
| Liquidation | 80% LTV | 78% LTV |
Arch: 20.0 percentage point buffer between starting LTV (60%) and liquidation (80%). Aave: 5.0 percentage point buffer between starting LTV (73%) and liquidation (78%). Arch provides a wider safety margin.
Choosing between Arch and Aave requires evaluating total cost, custody risk, and which platform aligns with your borrowing profile. Arch uses custodial (anchorage, qualified custodian) with 7.75%–9% APR, while Aave uses smart contract (wrapped btc via custodial bridge) with ~4.4% (variable) APR.
On a $250,000 loan, Aave costs $11,000 in the first year versus $24,975 at Arch, a difference of $13,975. Part of Arch's higher cost comes from its 1.49% origination fee, which adds $3,725 upfront on this loan size. Aave charges no origination fee, so the only cost is interest.
The custody difference is material. Aave uses smart contract (wrapped btc via custodial bridge), which means your Bitcoin requires multiple key holders to coordinate, reducing single-point-of-failure risk. Arch uses custodial (anchorage, qualified custodian). In a platform insolvency scenario, Aave borrowers' collateral is protected by the multisig architecture, while Arch borrowers may face creditor claims.
Arch is the better fit for borrowers who need smaller loans or instant access. Aave is the better fit for borrowers who need smaller loans or more flexible access.
Key details to be aware of: Arch: Origination fee is tiered and falls with loan size: 1.49% below $750K, 0. Aave: DeFi money market — rates are variable and utilization-driven: USDC borrow against WBTC/cbBTC has ranged ~3.5-5.
Aave is cheaper. On a $500,000 loan held for 12 months, Arch costs $49,950 (8.5% APR + 1.49% origination fee) while Aave costs $22,000 (4.4% APR). That is a $27,950 difference in the first year.
Arch uses custodial (anchorage, qualified custodian). Aave uses smart contract (wrapped btc via custodial bridge). Aave presents lower custody risk because your collateral requires coordination among multiple key holders.
Arch's minimum loan is $5,000. Aave has no minimum. Aave is more accessible for smaller borrowers.
Arch issues a margin call at 70% LTV with a 24-hour response window and liquidates at 80% LTV. Aave has no margin call — positions are liquidated automatically the moment LTV crosses 78%. Starting from a 50% LTV, Arch provides a 30-point buffer before liquidation, while Aave provides a 28-point buffer.
It depends on your priorities. Arch (7.75%–9% APR, custodial (anchorage, qualified custodian), min $5,000) is better for borrowers who value custodial (anchorage, qualified custodian) and need smaller loan access. Aave (~4.4% (variable) APR, smart contract (wrapped btc via custodial bridge), no minimum) is better for borrowers who value smart contract (wrapped btc via custodial bridge) and need smaller loan access. Use the rate table and cost comparison above to model your specific scenario.
Lygos offers 10% APR, $0 origination fees, and DLC-secured collateral where rehypothecation is cryptographically impossible.