Beginner's Guide to Gate.io Crypto Lending and P2P Loan

Apart from being a crypto exchange, Gate.io allows crypto holders to take a loan and lend their crypto tokens. Read further to learn more about it.

There are many ways to use cryptocurrency in general, but the most common option is crypto trading. Furthermore, crypto enthusiasts often tell others to HODL their digital assets – keep them safe in a crypto wallet until the price appreciates.

It's basically the same concept of keeping your money idle in your bank account until you feel the need to use it. But what if I tell you that while you wait for it to happen, you can get your digital currency to grow?

This is where crypto lending and loan come in. Crypto lending means you "lend" your idle currency to other users for a certain period of time in return for interest from the token.

This enables you as the saver to earn passive income without having to sell your asset. On the other hand, a crypto loan allows the borrowers to use their digital currency as collateral in exchange for a loan, either in other tokens, stablecoins, or fiat currencies.

Gate.io is a well-known crypto exchange that provides one of the best platforms to perform crypto lending and crypto loan. Let's find out how it works and why you should consider investing in it.

Introduction to Gate.io Crypto Lending

Gate.io crypto lending is a crypto-based peer-to-peer lending platform that enables users to lend their crypto assets to others. Users can request an order to lend at a specified daily interest rate of their own choice and simply wait for the borrower to take a loan with a matching order.

The process is very simple. You just have to register an account in Gate.io, deposit any amount of cryptocurrency in your balance, and submit an order for crypto lending. You can immediately start earning interest from the borrowers.

What are the Benefits?

There are numerous benefits that you can get from lending your cryptocurrencies in Gate.io, such as:

• Wide variety of assets – Gate.io offers over 200 digital currencies and stablecoins to lend or borrow. This number is pretty high compared to other crypto platforms, so definitely more choices for you here.
• Flexible daily interest rate and high profit – users can set the lending rate of their choice, starting from 0.01% to 1%. Users can also get a stable profit with an annual interest rate of up to 365% from crypto lending.
• World-class security – Gate.io has excellent security for its users. According to Coingecko's Trust Score for Top Cryptocurrency Exchange, Gate.io scores 9 points out of 10.
• 10-day duration and auto-order – the default period for crypto lending is 10 days and can be renewed automatically. Alternatively, you can also choose auto-order, which means the repaid amount will be automatically listed for new borrowers with the same rate as the initial or recalculated if the market rate is applied.

Borrowing Crypto in Gate.io

Gate.io offers two ways to borrow spot/margin and futures trading to get high APY, namely Gate.io crypto loan and margin borrowing. Let's explore them one by one.

Gate.io Crypto Loan

As the name suggests, the Gate.io crypto loan allows users to use one of their crypto assets as collateral to borrow another.

There are over 200 different tokens and stablecoins that you can borrow as well as a wide range of mainstream coins that can be pledged without a time limit. The interest will be counted on an hourly basis and can be borrowed or repaid at any time you like.

The crypto loan feature is available for all active Gate.io users. They can store funds in spot, margin, or future accounts and use the funds to trade.

The loan funds can be traded as long as users meet the qualification for using the service. In addition, they can also withdraw the money anytime.

The service enables users to borrow crypto coins at an initial pledge of 70% up to a maximum of 5 million USDT. Gate.io also accepts other coins as collateral including BTC, ETH, EOS, and GT.

Users can take a loan with a default period of 10 days – which can be automatically renewed and a daily interest rate as low as 0.01%. The duration of the loan essentially determines the amount of the interest rate that they have to pay.

Note that they can always repay the loan in advance.

Regarding the collateral ratio, there are several things to note. First of all, here's how it is calculated:

Collateral Ratio = Loan (interest payable included) value / collateral value

That being said, the lower the collateral ratio, the lower the chance of the collateral being liquidated. In Gate.io, the initial collateral ratio is 70%.

If it reaches 80%, the exchange will send you a notification either through messages, app notifications, or email. If it reaches 90%, liquidation will be triggered to repay the loan by exchanging the collateral for the loan currency.

Alternatively, you can add additional collateral to reduce the ratio and lower the risk of liquidation.

Apart from that, here are some rules and notes that you need to know before taking a loan on Gate.io:

• Users must repay the loan before or on the repayment date.
  If overdue, the collateral, as well as the loan money, will be held in custody and liquidation may be triggered to repay the loan. To make sure that you repay the loan on time, you can choose to use Auto-Repay or Auto-Renew if you need a longer loan duration.
• Users must repay the loan in full, so no partial repayment is allowed.
• Before you repay the loan, you can't use the collateral in any way.
• Gate.io reserves the right to liquidate orders with overdue loans or loans with high risks.
• Collateral loans may come with interest, commission, and other fees.
• It's important to understand that crypto coin prices can be extremely volatile, so you should be aware of the risks and able to manage them accordingly.
• You should agree that any decision you make in terms of investment and operation is fully based on your own will, so you're responsible for the risks and gains.
• Gate.io shall not responsible for the loss or of the notifications sent through any channels, including email, app, or short message. Users must be aware of their own order status and be responsible for knowing the real status despite the false update posted on Gate.io.
• Gate.io has the right of final interpretation to all points above.

Gate.io Margin Borrowing

Traders with limited resources always have the option of margin trading and add leverage to their positions. This can help to increase the amount invested without actually holding the asset.Gate.io offers a user-to-user borrowing market with over 250 kinds of crypto assets on the market. You can find any popular cryptocurrency on Gate.io margin trading.

Currently, more than ten million users have tried using Gate.io's margin borrowing feature. The high popularity is mainly caused by the favorable conditions offered by the exchange. For instance, compared to other platforms, the margin rate in Gate.io is very favorable, starting from 0.01%. There's also no time limit and the default borrowing period is 10 days. In addition, users can choose to automatically renew or repay the loan at maturity.

However, unlike the crypto loan, margin borrowing is only available for margin traders. If you are a margin trader, you could borrow some margins by first transferring your funds to your margin account, then go to margin borrowing and use the margin to increase your purchasing power.

Here are the terms for margin borrowing in Gate.io that you should know:

• Long refers to the act of buying an asset at a low price and selling it at a higher price to gain a profit.
• Short refers to the act of selling an asset at a high price and buying at a lower price later to benefit from a price drop.
• The base currency refers to the token against which exchange rates are quoted.
• The quote currency is used as a reference to the relative value of the base currency. So, in the BTC/USDT pair, BTC is the base currency and USDT is the quote currency.
• Total asset is the sum of assets in the user's margin trading account. This includes locked assets and usable assets.
• Transferred in asset is the asset that's transferred into the margin account from the exchange account.
• Borrowed asset is the asset borrowed and transferred into margin trading as collateral.
• Available asset is the asset in the margin trading account that's available to use. Users can use it to place orders.
• Locked asset refers to assets in order. It is used when the balance is not available to place orders in margin trading.
• Risk rate is the total-to-loan ratio in a margin trading account. The higher the risk rate, the lower the loan ratio, and the less chance for it to be liquidated.
• Forced liquidation happens when the risk rate is low to the liquidation threshold. This means that all positions are closed automatically to prevent further loss.
• Estimated liquidation price is the calculated price when the risk rate is equal to the liquidation threshold. A forced liquidation will be triggered if the price reaches this value.

All in all, crypto lending and crypto loan certainly sound great for any crypto holder. The process is very simple, the capital requirement is low, yet the benefit is quite tempting.

Gate.io presents an opportunity to lend and borrow crypto coins in a favorable manner and safe environment. But before you register yourself as a lender or borrower, make sure to understand the specifics as well as requirements. Also, consider the risks because you are fully responsible for any loss or gain you make.