In recent times, one of the biggest parts of Decentralized Finance was lending and borrowing crypto. Money market protocols are another name for the crypto lending platforms, and in 2021, they made up almost half of the total value locked up in DeFi. These protocols are decentralized, which means that there is no one in charge of them.
Since there are now a lot of crypto lending platforms on the market, it may be harder than ever to figure out how crypto lending works and which platforms you can trust.
In this blog, we’ll take a look at how it works and the best places to do it.
Let’s get into what Crypto Lending is and how it works.
A blockchain is a safe place where crypto transactions happen. Crypto lending is the same as traditional lending in that you give money to someone else and earn interest on it.
On the DeFi platforms, people can lend and borrow cryptocurrency. A p2p crypto exchange development owner will lend cryptocurrency to a borrower for an agreed-upon annual percentage yield (APY) (annualized percentage yield). Most of the time, the APY rate is between 5% and 12%. To process the transaction, the crypto platform charges a small fee. It is a safe, quick, and easy way to lend or borrow cryptocurrency online.
Note: APY is the amount of interest the lender makes from the deal, and APR is the amount of interest the borrower owes the lender.
Here are the Best Crypto Lending Platforms
CoinRabbit is a platform for lending and borrowing cryptocurrency that is based in London. In a short amount of time, it has become one of the best. This platform is easy to use and has a simple user interface. It is also easy to create an account and lend cryptocurrency.
- To make an account, you only need an email address or phone number (no KYC)
- Authentication with two things
- Any number of free withdrawals
- 10% APY fixed
- APR of 1.2% per month
- Interest is paid every day
- No free platform
Even though CoinRabbit is still pretty new, it has gained a lot of users in a short amount of time. Even though the APR is high, it is still a good choice because of the other features. Blockfi
It was started in 2017 and has its main office in New Jersey, the US. Blockfi is an all-in-one service that lets people buy, sell, and earn cryptocurrency through its platform. It lets people keep all of their crypto assets in one place and make money off of them.
- No hidden charges
- Up to an APY rate of 8.5%
- No minimum balance
- 4.5% APR for those who borrow
- Everyone loves it (be it novice or professional)
- You can buy stablecoins with fiat money
Blockfi lets you buy and sell cryptocurrencies like BTC, ETH, USDC, LTC, PAX, and GUSD. It has a special feature called Interest Payment Flex that lets users choose the currency in which borrowers will pay them interest.
YouHolder is a platform for lending crypto that is based in Switzerland and also works with fiat. On the platform, users can change one cryptocurrency into another or convert fiat currency into cryptocurrencies. They can also lend money to other people to earn a lot of interest.
- Works with the top 15 cryptocurrencies
- 90% LTV ratio (loan to value)
- You can get up to 12% interest
- You can get cash right away by putting up crypto as collateral
- Multi HODL feature
It is one of those DeFi platforms where people can borrow money but pay a high APR. It can be anywhere from 13.68% to 36% or more. But YouHolder is well-known for its small loans and ability to work with fiat currencies.
CoinLoan is an Estonian platform for crypto lending that lets crypto lenders and crypto borrowers use services that work well on mobile devices. Both Android and iOS devices can work with the platform. It’s easy to use and also it has a clean interface.
- Interest is paid every day
- No fees to put money in or take it out
- Up to a 12.3% APY
- APR ranges between 4.95% and 11.95%
- There is no contract
- For security, biometric authentication is used
You can also borrow cash from CoinLoan by putting up crypto as collateral. It is easy to use and has features like a fiat-on-ramp that makes it possible to move crypto assets from an exchange to a lending service.
SpectroCoin began in 2013 and is based in Belarus. Over the years, the platform has consistently given good results. It also offers a variety of crypto services, such as crypto loans.
- It takes collateral in the form of ETH, BTC, DASH, and XEM.
- 25% to 75% LTV ratio
- Get loans range from 25 euros to 1 million
- Maximum loan term of one year
- Automatically taking out the amount of interest
SpectroCoin is a platform for borrowing cryptocurrency. Instead of lending your cryptocurrency to other people, you can get a loan from the company.
A crypto lending platform lets you trade cryptocurrency with other people and make passive income from your crypto assets. A lot of new businesses are hiring a reputable cryptocurrency exchange development company to build a platform and make it easier for crypto fans to do similar transactions. By making changes to existing solutions to fit your business goals, you can launch a crypto lending platform faster.