Lygos charges 10% APR with $0 origination fees using non-custodial (dlc). 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 Lygos's 10%. On a $1M loan held for 12 months, Aave saves $56,000 in total first-year cost (interest plus origination fees). From a custody perspective, Lygos presents lower counterparty risk with its non-custodial (dlc) model.
Total year-1 cost includes both annualized interest and any origination fees charged upfront.
| Loan Size | Lygos APR | Aave APR | Lygos Total Year-1 Cost | Aave Total Year-1 Cost | Savings |
|---|---|---|---|---|---|
| $100,000 | 10% | 4.4% | $10,000 | $4,400 | $5,600 with Aave |
| $250,000 | 10% | 4.4% | $25,000 | $11,000 | $14,000 with Aave |
| $500,000 | 10% | 4.4% | $50,000 | $22,000 | $28,000 with Aave |
| $1M | 10% | 4.4% | $100,000 | $44,000 | $56,000 with Aave |
| $5M | 10% | 4.4% | $500,000 | $220,000 | $280,000 with Aave |
Total year-1 cost includes annualized interest plus origination fees. Lygos: $0 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.
Lygos and Aave take fundamentally different approaches to collateral custody. Lygos uses Non-custodial (DLC). Your Bitcoin is locked on the Bitcoin blockchain in a smart contract. Neither Lygos nor any third party can access or move your collateral. 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.
Lygos triggers margin calls at 70% LTV and liquidates at 85% LTV. Aave has no margin-call mechanism: positions become liquidatable automatically the moment LTV crosses 78%, with no warning threshold or response window.
| Threshold | Lygos | Aave |
|---|---|---|
| Max Starting LTV | 70% | 73% |
| Margin Call | 70% LTV | None |
| Margin Call Window | Threshold-based | None — automated liquidation |
| Liquidation | 85% LTV | 78% LTV |
Lygos: 15.0 percentage point buffer between starting LTV (70%) and liquidation (85%). Aave: 5.0 percentage point buffer between starting LTV (73%) and liquidation (78%). Lygos provides a wider safety margin.
The choice between Lygos and Aave comes down to three factors: total cost, custody architecture, and who the platform is designed for. Lygos serves borrowers from $50,000 to $50,000,000 with a single transparent rate and non-custodial DLC security. Aave serves borrowers of any size with no minimum, using smart contract (wrapped btc via custodial bridge).
On a $250,000 loan, Aave costs $11,000 in the first year versus $25,000 at Lygos, a difference of $14,000. Aave charges no origination fee, so the only cost is interest.
The custody difference is material. Lygos uses non-custodial (dlc), which means your Bitcoin is locked on the Bitcoin blockchain in a smart contract where no party can access it. Aave uses smart contract (wrapped btc via custodial bridge). In a platform insolvency scenario, Lygos borrowers' collateral is protected by the Bitcoin protocol, while Aave borrowers may face creditor claims.
Lygos is the better fit for borrowers who prioritize non-custodial security, want a single transparent rate, and are borrowing $50,000 or more. Aave is the better fit for borrowers who need smaller loans or more flexible access.
Key details to be aware of: 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, Lygos costs $50,000 (10% APR) while Aave costs $22,000 (4.4% APR). That is a $28,000 difference in the first year.
Lygos uses non-custodial (dlc). Aave uses smart contract (wrapped btc via custodial bridge). Lygos presents lower custody risk because your collateral is locked on the Bitcoin blockchain where no party can access it.
Lygos's minimum loan is $50,000. Aave has no minimum. Aave is more accessible for smaller borrowers.
Lygos issues a margin call at 70% LTV (threshold-based, no fixed window) and liquidates at 85% LTV. Aave has no margin call — positions are liquidated automatically the moment LTV crosses 78%. Starting from a 50% LTV, Lygos provides a 35-point buffer before liquidation, while Aave provides a 28-point buffer.
It depends on your priorities. Lygos (10% APR, non-custodial (dlc), min $50,000) is better for borrowers who prioritize non-custodial security and want a flat transparent rate. 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.
See why borrowers choose Lygos over Aave for Bitcoin-backed liquidity without custody risk.