Stani on EURC yield on Aave

Okay, but isn't the differential here essentially too low for the risk that you're taking? Let's say I can borrow with a German bank Euros and I put them on-chain into Aave for a slightly higher yield. This would still leave me very exposed to a number of risks like custodial risk, I would have to leverage my position, Aave could get hacked, or my bank could change the credits costs, etc.

I think the main argument is that with Aave your lending rate is determined by people who typically borrow it against their ETH. So when ETH goes up, so does the demand for EUR and so does your yield.

Since printing correlates with ETH goes up, it should correlate with your lending yield. Which is contrary to what happens in banks, where more printing means less yield, as they primary borrow money from central banks, not from the people.

But you ofc have different types of risk when you lend money on Aave vs banks :)