One way to invest in bitcoin is the possibility to use your cryptocurrency holdings as security for a loan, although if your holdings are minor. A similar approach is known as securities-based lending in traditional markets, although it is generally restricted to the high-net-worth clientele of financial institutions and major banks. Crypto loans are significantly more open, and they allow “hodl” investors to obtain value from their investment despite having to sell it. We’ll go through some of the greatest DeFi and CeFi crypto lending platforms in this post.
How Should You Select a Cryptocurrency Lending Platform?
Credit limit: Verify if a minimum deposit amount is required and what it shall be.
Interest rates: Select a crypto lending platform depending on the interest rate of a certain coin on each given platform.
Platform hazards: Examine the platform’s track record to have greater comprehension.
Lending duration: Determine whether it is fixed or variable.
Collateral: Look at the number of securities required to get a certain loan amount across various platforms.
Expenses: Analyze the fees charged by various platforms for various currencies.
Best crypto lending platforms
Binance is one of the top cryptocurrency exchanges in the world, with more than 1,400,000 transactions every single moment. Binance has created its own ecosystem in addition to being the largest cryptocurrency exchange. Binance has also released a currency known as “BNB.” Binance’s primary goal is to enhance the global level of decentralised finance. Presently, many network operators are developing blockchain apps on the Binance ecosystem.
With very few clicks, you may handle all of your digital currencies as well as get crypto-backed loans on MoneyToken. The procedure is straightforward and just involves a few mouse clicks. You will simply have to wait till your application is approved and your cash is sent into your account once you have chosen the loan conditions and deposited the collateral.
CoinLoan is just another reputable tool for managing all of your digital assets that are available on both Android and iOS. There really are no registration or withdrawal fees to be concerned about. You may also earn daily earnings by just putting your assets on the site.
Unchained Capital stands out among CeFi lenders due to its multisig collaborative custodial strategy, which provides borrowers with greater insight into their assets and boosts security. Managing collateralized assets in this system necessitates the use of three private keys. The borrower controls one, Unchained Capital controls another, and a third-party key agent controls the third.
With YouHodler, you can receive a crypto loan in any of the top 15 cryptocurrencies with a loan-to-value ratio up to 90%. You may use YouHodler to store, exchange, and perhaps even pay others in crypto-assets. By using your cryptocurrency as collateral, you may obtain fast cash. One of the greatest features of the platform is the capability to borrow coins like Bitcoin (BTC), Tether (USDT), EUR, or GBP.
Alchemix seems to be a micro DeFi lending system that enables loans which “pay themselves back over time” using a novel yet fascinating manner. In a nutshell, customers deposit DAI into something like a smart contract and get a token representing the deposit’s potential yield farming ability in exchange. This currency is known as alUSD, and it may be exchanged for DAI 1-1 upon this Alchemix platform and transacted on a DeFi exchange such as Sushiswap.
The AAVE system is a well-known decentralised liquidity mechanism. In this non-custodial system, users can earn interest on their cryptocurrency holdings as well as borrow cash by staking their holdings. Other than borrowing and lending cryptocurrencies, AAVE follows a highly potential liquidity protocol with a plethora of capabilities.
Another significant DeFi platform is Compound. The users contribute bitcoin to sustain the system while also earning interest on their deposits. The money they’ve contributed is reflected as cTokens, the value of which grows over time. This cToken supply balance, on the other hand, maybe used as security for a loan.
Celsius is a renowned brand when it comes to financing and investment in cryptocurrency. You could earn up to 17% in return each time you lend cryptocurrency on the Celsius network. You will not be charged any charges for borrowing, transferring, or lending the coins. Another amazing feature is that Celsius is available in both online and application modes.
Oasis Borrow (MakerDAO)
Oasis Borrow is a cryptocurrency lending hub in the Maker network that utilizes the DAI stable coin. Maker loans are attractive since they are fundamentally based on systems like providing personal loans. Everyone with cryptocurrency and a MetaMask wallet may open a Maker Vault and start minting DAI. Just keep putting up your asset as collateral using Oasis Borrow and commit to either mint a specified quantity of DAI or return the money amounting to your loan before releasing your asset.
Blockfi is yet another platform for purchasing, selling, and generating bitcoin. You may anticipate up to 8.5 per cent APY on various coins, with payments sent weekly. There really are no hidden fees or reserve ratio requirements to be concerned about. You can save all of your digital currencies in one location while also making them earn more money for you.
Even while crypto loan sites are widespread and provide attractive interest rates, it is critical to thoroughly consider all options. Aside from examining each crypto lending platform on our list, you need also be aware of the crucial features that crypto lending platforms must-have.