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The crypto-market can provide both investors and traders with an opportunity to make huge profits. Lending works similarly in both the traditional and crypto-spaces with the only difference being that the lenders lend cryptocurrencies on a platform rather than fiat. Users usually borrow cryptocurrencies from various platforms for trading and other purposes. The lenders in return get crypto-dividends for the amount they lend to the borrowers on any decentralized platforms.
There are two major types of crypto-lending platforms – Centralized crypto-lenders and decentralized crypto-lenders. While both offer access to high-interest rates and require borrowers to deposit collateral to access crypto loans, every user should choose the platform that suits their own needs.
Here we take a look at the top 8 lending protocols in the crypto space –
1. Crypto.com
Crypto.com is one of the most popular multi-chain DeFi lending platforms offering a wide range of services including a fully-fledged crypto exchange, DeFi wallet, loans, credit cards, interest-earning accounts, and much more.
The platform allows users to earn interest on a variety of crypto assets. The APY (Annual Percentage Yield) depends upon the tokens and their chosen lock-up terms but the users also have the option of a flexible account for a term of 1-3 months. Crypto.com also lets users stake CRO and boost their interest rates.
2. Binance
Binance is one of the world’s most popular cryptocurrency exchanges with more than 1,400,000+ transactions taking place every second. The platform is a one-stop solution for everything relating to the blockchain and crypto space.
Both flexible and locked savings options are available to users on the platform along with an auto-invest option which can help users earn passive income automatically.
3. YouHodler
YouHodler aims to help crypt- enthusiasts unlock the benefits of crypto in a simple and secure manner through their platform. Users can buy, sell, trade, exchange, store and earn cryptocurrency with ease. They can also avail of a crypto loan with up to 90% LTV (loan-to-Value ratio) and get instant cash by using their coins as collateral.
YouHodler lets people earn crypto with 8.32% APY and even get a loan of $100. Through their universal conversion option, any asset can be exchanged into different forms. Furthermore, by simply depositing their crypto on the platform, a user can earn up to 12% on tokens and coins.
4. Solend
Solend is a decentralized protocol based on the Solana blockchain. It focuses on lending and borrowing digital assets, while also letting users earn interest through lending their assets and enabling a fast and affordable process.
Lenders on the platform who provide liquidity, earn through the APY that borrowers pay. This APY is divided across the whole pool. Solend has a native token called SLND which helps in running its protocol as a DAO and is managed by its token holders who are members of its community. SLND is also used to reward its early adopters and investors.
5. BlockFi
BlockFi acts as an all-in-one crypto solution for users who can expect up to 8.5% APY on various cryptocurrencies paid on a monthly basis. Borrowers can get loans for rates as low as 4.5% APR in a fast and secure manner. There are no minimum balance requirements or hidden charges on the platform.
Users can borrow upto 50% of the value of their crypto and use it to buy different assets or broaden their portfolios or meet their financial goals. BlockFi has something for users of all expertise levels whether it is a beginner or an expert trader.
6. Compound
Compound is an Ethereum-based protocol that establishes asset pools with interests derived from algorithms and is based on the demand and supply for these assets. The platform has a lot of assets and protocols available for lending and borrowing. It also has its own COMP token that can assist users in yielding better returns when they lend their crypto to the platform to provide liquidity.
Compound has a secure network with a live price feed that can be helpful in tracking the prices depending on liquidity.
7. Aqru
Aqru is a leading platform that helps users earn interest on their idle digital tokens. The platform distributes interest payments every 24 hours meaning that users can instantly reinvest their interest payments into the same account and get compounding benefits.
Investors can get up to 8% APY interest on their tokens and coins and also track their interest payments by the hour.
8. AAVE
Aave is one of the most popular DeFi lending platforms in the crypto-space. Ever since its launch in 2017, it has expanded significantly to facilitate lending and borrowing markets for a range of assets on various networks. It is an open-source liquidity protocol that creates pools for digital assets that facilitate lending for users.
The total TVL on Aave is more than $21 billion spanning 7 networks, all of which is managed in a decentralized manner. The AAVE token helps users get a discounted fee when trading or can be used as collateral. The platform offers various lending rates from 1%-3% wherein some assets can generate a higher yield.
Bottom Line
There are several factors a user needs to consider while choosing a lending platform, these range from choosing the correct interest rates, keeping in mind the risks of the platform, comparing the costs of different platforms, collateral, lending duration, and deposit limits.
Additionally, one of the most important factors is to select the right platform as per the coin and do your own research extensively before zeroing in on a platform.
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