Crypto lending emerged as one of the fastest-growing mechanisms in the financial sector which has changed the whole payment mechanism globally.
The process allows investors or cryptocurrency holders to lend their digital coins like Bitcoin, Ethereum, Litecoin and more to different borrowers. The purpose is to generate money in the form of interest they will receive in exchange for lending money to potential borrowers. The more digital coins you will lend to borrowers the greater you can generate yields.
Increasing Trend of Cryptocurrency Lending!
Cryptocurrencies have attracted masses of people including businesses, institutions and industries leading them to invest in digital coins for various purposes including buying, selling, investing and trading cryptos to generate money. Another trend that has been witnessed in the past couple of years is the entirely transforming borrowing and lending ecosystem. It is when traditional financial sectors like banks have tightened the conditions for borrowers to apply for loans. With cryptocurrencies, people can now easily borrow money in form of digital coins from the crypto lenders.
[Read More: Lending Money – Finance Topics Information]
How Safe Is Crypto Lending?
Cryptocurrencies are built on a distributed ledger technology called blockchain which makes trading, investment, borrowing and lending secure, transparent and fast. When lending digital assets or crypto coins to borrowers, lenders are sure that there is no risk associated with getting their assets stolen. In addition, the process of lending and borrowing digital coins is peer-to-peer which means that there is no need for third-party or intermediator like banks which makes the process and transactions highly protected, secure and transparent.
What’s The Best Time to Lend Your Digital Coins?
There is a concept to hold on to digital coins or assets until the price soars higher and higher. Cryptocurrency investors do it with the purpose to generate more profit by selling those coins to potential buyers. However, there’s another approach to growing digital currency to earn higher yields and that’s cryptocurrency lending.
The ideal time to lend digital assets is when their prices are lower as at that time it is not wise to hold on to them. Rather, holders can lend them to potential borrowers and generate money in form of interest.
How to Lend Your Cryptocurrency?
Cryptocurrency holders can lend their coins anytime to earn interest return which they can make as a source of passive income as well. Since there are a large number of cryptocurrency lending and borrowing platforms offering their services, users have to find the best one which can offer them all the useful features. After finding the crypto lending platform, users have to decide on an exchange – flexible or fixed. In addition, users also have to decide on the coins they want to lend to borrowers. Make sure to choose the coins smartly. Try to go for ones with maximum stability and sustainability so that you can earn profits. However, it depends on the market trends and recent conditions as well as how well you tolerate the risk associated with cryptocurrencies.
Once you choose your cryptocurrency, now you can give a loan to a borrower. Then, you will stake your digital collateral and wait for investors to fund the loan. In addition, the investors will receive interest and finally, the collateral will be returned once the loan is paid by the borrower.
How to choose a Cryptocurrency Lending Platform?
When choosing the best cryptocurrency platform, multiple factors must be in your mind to land on the best platform out of all. A few key elements to consider include:
- Fees – visit multiple service providers and compare their costs for different cryptocurrencies.
- Interest rates – select the network based on the interest rate of the particular coin that you want to lend to borrowers.
- Lending duration – assess if it is fixed or not.
- Platform risks – visit and overview the platform to analyze its track record for better understanding.
- Available features – assess all the available features and advantages a platform can offer you. It better is to compare multiple platforms to assess their features.
| Lending Platform | Supported Coins / Currencies | Token Required | Interest Rates |
|---|---|---|---|
| YouHolder | ETH, DAI, BTC, USDT, DASH, PAX, XRP LTC, and 30 more | No | 3% – 12.7% |
| Hodlnaut | ETH, USD, BTC, and 3 more | No | 1% – 12.73% |
| CoinLoan | USDC, EUR, PAX, GBP, USDT, TUSD, BTC, LTC, ETH, and 9 more | Yes | 5.2% – 12.3% |
| Celsius | ETH, BUSD, CEL, USDT, BTC, DAI, XRP, GUSD, LTC, DASH, and 29 more | Yes | 2.02% – 17.78% |
| Vauld | BTC, ETH, USDT, and 200 more | No | 4% – 12.68% |
| Yield | ETH, USDT, BTC, and 3 more | Yes | 4% – 12.3% |
| Crypto.com | LTC, BTC, CRO, USDC, ETH, BNB, CAD, and more | Yes | 1.5% – 14% |
| Haru Invest | ETH, USD, BTC | No | 6% – 17% |
| BlockFi | ETH, BTC, LTC, LINK, GUSD, USDC, PAX, and USDT | No | 0.5% – 9.3% |
| Cabital | BTC, ETH, USDT | No | 1.8% – 12% |
| Ledn | BTC, USDC | No | 2% – 7.25% |
| BlockFi | ETH, BTC, LTC, LINK, GUSD, USDC, PAX, and USDT | No | 0.5% – 9.3% |
Wrapping It Up
To make your crypto investment successful and generate higher profits it is essential to exercise the best practices. The very first and foremost thing is to keep checking and evaluating the cryptocurrency price charts and industry analyses from the best crypto analysts actively monitoring the crypto market.
[Read More: Lending Money – Your Resource For Everything Finance]
In addition, it is always suggested to do your own research tremendously about the expected platforms you are going to consider for lending as poorly secured crypto lending platforms might cause you financial loss ultimately.
