I think mastercard visa etc will focus on #2 above and it will bring extremely powerful dynamic to these ecosystems
Unfortunately, it doesn't offer the speculative upside of something like Bitcoin. People don't actually care if their transactions are carried across a blockchain or a database, as long as it gets done.
Bitcoin is hot specifically because it's so detached from any real-world use cases or metrics that might put bounds on its price. There's a narrative that because no one can determine an upper limit for Bitcoin price, there's infinite upside. Of course that narrative is no different than any other arbitrary asset, but the Bitcoin narrative is strong because it's been in the news so much.
Does the interest return come from actual investments? Or is it paid forward by newcomers? The latter is the literal definition of a ponzi scheme.
There's no free lunch when it comes to generating interest.
It may also interest you to know that AAVE was granted an Electronic Money Institution license by the U.K. Financial Conduct Authority (https://register.fca.org.uk/s/firm?id=0010X00004U9vVAQAZ).