Did you know that apart from buying and selling, you can also lend and borrow crypto assets? Find out more about crypto lending and the best platforms to do it.

7 Best Crypto Lending Platforms

As the name suggests, crypto lending refers to the act of lending crypto assets to borrowers in accordance with a particular interest rate. Generally speaking, crypto lending is more or less similar to the process of lending money in traditional banking systems.

There's the lender who owns the asset and is looking for opportunities to earn passive income. And on the other side, there's the borrower who typically needs a loan for business or other purposes.

Basically, the bank would receive the funds from the lender's savings account and then lend the money to the borrowers. The bank offers the lender a specific interest rate while at the same time, charges the borrower with a higher interest to earn profit.

The only difference here is that in crypto lending, the lender should lend cryptocurrency instead of fiat currency.

Moreover, there are some advantages that you can get from crypto lending as compared to the traditional one.

Firstly, blockchain technology makes the process of crypto lending more secure and risk-averse. The smart contracts will guarantee that the crypto loans are paid back on time, even without checking the borrower's credit.

Another advantage is that if you use stablecoins, you can earn great interest rates without being exposed to the extreme volatility of Bitcoin or other altcoins.

So, here are a few popular crypto lending platforms recently:

  1. BlockFi: great for any type of investors and beginners
  2. Celcius: a wide variety of cryptocurrencies are available for lending
  3. Binance: the most popular cryptocurrency exchange with 1 million transactions per sec
  4. Compound: has its native coin with great returns
  5. AAVE: you can earn interest from crypto holdings alongside borrowing funds
  6. YouHodler: allow crypto lending with up to a 90% loan-to-value ratio
  7. CoinLoan: offers daily interest for storing assets with no deposit and withdrawal fees

Those 7 crypto lending platforms have another benefit for lenders. That's why they gain more popularity recently. Check the complete explanation below.

 

Best Crypto Lending Platforms

In this list, we will explore 7 best crypto lending platforms to consider in 2022:

 

1. BlockFi

When it comes to crypto lending platforms, BlockFi is definitely considered one of the best ones. Apart from being a huge and reliable company, BlockFi is great for almost any type of investor, including beginners.

You can fund your account balance with Bitcoin, Ethereum, Litecoin, or stablecoins. You can earn an APY of up to 8.5% depending on the crypto asset. Conveniently, there are no minimum deposit requirements and no hidden fees.

Blockfi logo

Other than that, you can withdraw your crypto at any time you want. You will get 1 free withdrawal per month and for any extra withdrawal, you will have to pay a small fee.

BlockFi also offers loans in USD but you must put up cryptocurrency as collateral. The amount of collateral you put in will affect the loan rate, which ranges from 4.5% to 9.75%. There is no maximum loan amount.

See also: List of Exchanges Accepting USD Fiat Deposits

 

2. Celcius

Another top crypto lending platform that you can choose is Celcius. The company was founded in 2018 and so far has processed around $8.2 billion in loans between its 340,000 users.

In terms of safety, Celcius has passed the asset verification by a trusted auditor, Chainalysis. The most notable advantage of using Celcius is that it offers a wide variety of cryptocurrencies available for crypto lending.

The annual percentage yield (APY) is also relatively higher compared to other platforms, especially for stablecoins. You can earn up to 17% APY that will be paid every week.

On top of that, you can also boost your earn rates by up to 25% if you choose to earn the interest in the CEL token.

Celcius logo

Celcius requires a minimum loan of $500 and no maximum loan that you can take out. But, you would need to put up a proportional amount of crypto to get the loan. Apart from that, Celcius also offers a great mobile app to manage your transactions.

 

3. Binance

Binance is a highly popular cryptocurrency exchange with over 1,000,000 transactions per second. Other than being an exchange, Binance also has several other purposes, including being a crypto lending platform. It even has its own native coins, BNB.

Overall, Binance offers a one-stop solution for all crypto holders who want to purchase, sell, exchange, and trade crypto assets.

Binance logo

 

4. Compound

Compound is another popular crypto lending platform that's definitely worth checking out. The platform supports various cryptocurrencies and allows users to lend and borrow any type they prefer. The company has issued its native token, COMP, which offers greater returns for lenders.

The biggest benefit is that Compound is one of the safest platforms right now and it offers a live price feed that allows you to make better tracking of crypto prices according to the liquidity.

compound

 

5. AAVE

AAVE is undoubtedly one of the biggest names in the world of crypto lending and borrowing.

It is a decentralized liquidity protocol that is non-custodial, which means it allows users to earn interest from their crypto holdings alongside borrowing funds by staking their crypto assets.

If you take a look at the platform, you'll notice that it allows users to deposit or borrow assets.

AAVE logo

The interest rates are displayed publicly so you can easily compare them. Additionally, there are many interesting concepts such as Bug Bounty and Flash Loans.

Another thing to keep an eye on is that if you notice any bug and report it to the developers, you can get a reward of up to $250,000 from the developers in the form of USDC tokens.

 

6. YouHodler

YouHodler is one of the earliest names in the crypto lending industry. The company essentially allows users to lend and borrow any coin of the top 12 cryptocurrencies with up to a 90% loan-to-value ratio.

You can store, exchange, and pay anyone with crypto assets. If you want to lend, simply deposit your crypto and earn interest of up to 12% on various crypto coins and stablecoins.

If you want to borrow some cash, you would only have to put your crypto as collateral. You can get a loan of up to $100 in BTC, USDT, USD, EUR, CHF, and GBP.

 

7. CoinLoan

The final entry on this list is CoinLoan. It is a great crypto lending that is supported in both Android and iOS platforms. One of the notable benefits is that there is no deposit and no withdrawal fees.

Interestingly, you can also get the opportunity to earn daily interest by simply storing your asset in CoinLoan. Apart from lending and borrowing, you can also purchase, sell, or exchange your crypto assets with just a few clicks.

You don't need to worry about the safety of your assets because there's a biometric authentication attached to the app for better security.

 

Types of Crypto Lending Platforms

Since we're only lending cryptocurrency, then we cannot use traditional banks to facilitate the transaction. Instead, we must use a cryptocurrency lending platform. There are two types of platforms that you can choose, namely:

 

Centralized Platform

Centralized crypto platforms generally operate like traditional banks. They serve as intermediaries for the execution of the crypto lending process.

The platform would handle and take control of the assets and the collateral during the loan term. You simply have to store your crypto assets on a savings account and let the platform lend your coins to prospective borrowers.

 

Decentralized Finance (DeFi) Platform

DeFi platforms, on the other hand, use smart contracts to replace any third party in the transaction. Instead of putting a big trust in lending companies, DeFi allows you to use escrow accounts and codes to manage the money autonomously.

Some people would find this more beneficial because the transaction will be executed automatically according to the specific conditions in the contract.

 

Selecting a Crypto Lending Platform

When it comes to choosing a crypto lending platform, there are several key considerations that you should keep in mind, such as:

  • Interest Rates: This is the first thing that you need to check before choosing a platform. Choose a lending platform that offers a favorable interest rate for the crypto asset that you own.
  • Fees: Compare the fees that you need to pay for different platforms and different coins. Pick the one that's most profitable to you.
  • Platform Risks: Always check the track record of the platform and consider the risk in using them.
  • Minimum Deposit Limit: See if the platform has any specific requirements regarding the minimum deposit amount.
  • Loan Duration: Verify whether the lending duration is fixed or flexible so you can make a choice based on your preference.
  • Collateral Amount: Another important thing to keep an eye out for is the collateral amount. Compare the amount of collateral you must put in order to get a specific amount of loan.