Imagine earning 7-9% interest on your savings without tying up your money or taking on excess risk. That’s our promise with Nook, a modern savings app that leverages decentralized finance (DeFi) lending to grow your savings.

In this article, we’ll explore how Nook works from a user’s perspective - from onboarding to withdrawals - and compare our user experience and returns to those of conventional savings options. We’ll also share an early sneak-peak to upcoming features.

What Is Nook and How Does It Work?

Nook is essentially a high-yield savings account powered by DeFi lending. When you deposit money into Nook, it gets converted into stablecoins (digital USD equivalents) and supplied to decentralized lending protocols in the background. Those protocols then lend your funds to borrowers who pay interest - which comes back to you as earnings. Nook handles all the complexity behind the scenes. As a user, you just see a savings balance grow at a high annual percentage yield (APY), without needing any crypto expertise. As of march 2025, DeFi lending platforms collectively manage over $32 billion in assets. These platforms are over-collateralized, meaning borrowers must provide more value than they borrow, keeping your savings protected. If collateral value drops, smart contracts automatically liquidate assets to repay lenders, ensuring principal security. Combined with rigorous audits and proven safety records, these protocols allow Nook to grow your money securely and transparently.

→ Here’s a blog post that dives deeper into how DeFi lending works.

Let’s Walk Through the User Experience

1. Sign Up: Download the Nook app and create an account. The onboarding is quick - you enter your e-mail address and complete an identity verification. This will take no more than 2 minutes.

2. Deposit Funds: Next, you can make a deposit. You can transfer money from your bank (ACH or card), Apple Pay, connect your Coinbase account, or deposit crypto stablecoins directly if you already have some. Your funds are then converted into USDC (a stable coin, pegged 1:1 to the USD).

3. Earn High Interest: Once deposited, your money immediately starts earning in the DeFi lending markets. You’ll see your balance in Nook increase in real time and will earn a much higher APY than at a traditional bank. That being said - Nook’s rate will vary with market conditions (more on that shortly).

4. Withdraw Anytime, Instantly: Need your funds back? No problem - your savings aren’t locked up. You can withdraw anytime through the app. There are no penalties or lengthy waiting periods.

Overall, Nook is designed so that there’s no learning curve: if you’ve used any online banking or savings app, Nook will feel familiar.

Here’s a more in-depth technical overview on how your account, the Nook App and your wallet interact:

Now, let’s explore how Nook stacks up against the status quo of traditional banking and savings platforms in some key areas:

• Interest Rates: Perhaps the biggest difference. As of March 2025, the national average savings rate in the U.S. is just around 0.5%, while inflation averages around 3%, after peaking above 9% in mid-2022. That substantial gap means money kept in traditional savings accounts is quietly losing value and purchasing power year after year. In contrast, Nooks average return over the last 365 days is sitting at 8% APY. To put that into perspective - with $10,000 saved, a typical bank might pay you $50 a year, the highest yield accounts like Robinhood (4% APY) would pay around $400. AT 8% APY, Nook would earn you $800.

• Speed & Access: Opening and using a Nook account is fast and convenient. You sign up online in minutes and start earning interest the same day. Traditional banks often require branch visits or days of verification to open accounts. Sending money is also faster with Nook - crypto networks settle transactions within seconds, whereas bank transfers (ACH) can take 1-3 business days. With Nook, your money is working for you 24/7, and you can deposit or withdraw whenever you want. Need to move funds at midnight on a Sunday? No problem. Traditional finance simply doesn’t offer that kind of always-on service.

• Flexibility & Freedom: Traditional savings accounts often have minimum balance requirements, monthly fees, or limits on withdrawals (for example, some savings accounts limit you to ~6 withdrawals per month). Nook imposes none of those constraints. You can start with any amount - whether $5 or $100k - and you won’t be charged any fees.

• Fairness & Profit Sharing: Did you know that banks on average keep around 80% of the profits they generate with your money? Nook passes the bulk of the profits to you (it’s your money after all) and doesn’t take more than 10%.

• Security: Traditional banks have FDIC insurance up to $250k, protecting deposits (albeit at the cost of very low interest). Nook isn’t a bank and not FDIC insured but it prioritizes safety differently, by using regularly audited smart contracts and over-collateralized lending. Your principal is not exposed to market volatility and is secured by collateral from borrowers at all times. Additionally, Nook sticks to reputable protocols that have undergone extensive security audits and have a proven track record of no past security issues or exploits.

Even During Market Crashes, You’re Still Saving

Yields can fluctuate over time. DeFi lending rates respond to supply and demand: when lots of people want to borrow, interest rates go up; when borrowing demand cools or supply floods in, rates go down.

Just a few months ago, in late 2024, stablecoin lending APYs were extremely high - often around 13% or higher on big platforms, with some spikes into double digits. Since then, the broader crypto market cooled off and those rates have come down to roughly 5-6% currently. Rates are poised to go back up, as the market stops going down.

You might wonder - should you really be excited about a 5% yield? The answer for many savers is yes, and here’s why: Nooks APY comes with no risk to your principal and no market volatility. This makes it a much more comfortable place to keep money you may need in the near future compared to something like the S&P 500, which in recent weeks has dropped over 10%.

Upcoming Features

Nook’s upcoming features aim to keep your rate at the high end of what’s available - automatically. We will be introducing a cross-protocol yield strategy. This will enable diversifying your deposits across multiple DeFi lending pools and dynamically shifting allocations to whichever is paying the best interest at the time, resulting in higher APY’s.

Here’s a sneak peak:

Why We Built Nook

Many people, including us have been using and benefiting from these lending protocols for years (there’s currently over 300,000 monthly active users). But we noticed a recurring challenge: whenever we tried to share this opportunity with friends and family, the complexity of crypto was a major barrier. Without prior knowledge of wallets, stablecoins, or DeFi protocols, it felt intimidating - even though the benefits were clear. That’s exactly why we built Nook: to take the powerful advantages of decentralized lending and make them accessible to everyone. No prior crypto experience needed and no complicated setup - just a simple, secure way to grow your savings effortlessly and actually get ahead.

sources: https://defillama.com/lending https://docs.aave.com , https://www.cnbc.com/quotes/.SPX , https://nookapp.xyz/blog/defi-lending , https://www.statista.com/statistics/273418/unadjusted-monthly-inflation-rate-in-the-us/ , https://robinhood.com/us/en/ , https://www.halborn.com/ , https://moonwell.fi/discover