Cryptocurrency lending is a kind of trade where you earn a specific interest rate by lending your crypto, providing people with an amazing source of passive income. There are many crypto lending platforms that facilitate this kind of lending trade facility. Lending crypto coins and the technology behind them are gaining prominence and popularity.
This is because the blockchain based smart contracts help lenders as well as borrowers in agreeing to fair and feasible terms of the contract (including proof-of-funds as well as payment planning). The best thing about blockchain lending platform apps is that alternative crypto lending comes with a decentralized network and doesn’t need any intermediary such as banks and lawyers. As these lending platforms are decentralized in nature, they offer borrowers access to a larger and highly competitive pool of financing facilities.
A wide array of digital assets including Bitcoin, Ether, AAVE, or Stable Coins offer the best returns. Though the lending rates vary depending on the platform, they are often very competitive in nature. In fact, 12% Annual Percentage Yield (APY) is also not uncommon for crypto owners. These crypto lending platforms usually loan the assets with collateral along with cryptocurrencies. That’s why they are also called crypto-backed loans. This article will help you get answers to all your questions (including pros and cons) through this step by step guide.
Cryptocurrency Lending Liquidity Pools
In comparison to lending fiat money, a big difference with crypto lending is that it provides users with an option other than P2P matching. There are many users who simply want to earn the interest rate, ranging from 4-to-9%. They don’t bother with the P2P lending process that involves matching for scans as well as funding agreements, which then could be delayed.
The entire p2p lending process can be bypassed if you want to. Your cryptocurrency can be invested fully into a liquidity pool, which lends your money to a borrower (who puts up the needed collateral) at a fixed rate. Your idle money starts working and earning money right away in an easy and fast manner. You don’t have to see whether the loan you like and invest in is getting fully funded.
One of the new generation DeFi (decentralized finance) platforms is called Compound Finance. It lends only through liquidity pools. There is an estimated US$3.86 billion in collateral locked up for borrowers. Don’t think that Compound Finance is the largest DeFi crypto lender. All the largest Decentralized Finance DeFi platforms have over US$32 billion of collateral on their platforms. There are many other similar DeFi lending platforms including Twino and Bondora.
If you are thinking of increasing your cryptocurrency assets through lending, the leading crypto lending platforms are given and discussed here.
Top 3 Best Cryptocurrency Lending Platforms
Now, let’s take a closer look at these leading crypto lending platforms.
This platform was started by two entrepreneurs from Singapore in March 2019. They were self-proclaimed Bitcoin maximalists. Hodlnaut platform provides individual investors with financial services that offer users favorable interest in cryptos by lending them to those margin traders who would otherwise struggle to accept cryptocurrency loans.
- Bitcoin’s (ETH) interest rate is 6% with the annual rate being 6.2% effectively.
- Ethereum’s (ETH) interest rate is 6.5% with the annual rate being 6.7% effectively.
- DAI, USDC, and USDT’s interest rate is 8% with the annual rate being 8.3% effectively.
No minimum deposits or lock-in periods are there. A user can withdraw his/her crypto funds anytime. Hodlnaut is one of the most happening emerging players in the crypto lending industry that aspires to become an industry leader.
This is a European Union company, based in Switzerland, that specializes in offering crypto assets-backed lending with fiat loan options. Crypto loans provided by YouHodler include USD, EUR, CHF, GBP, EUR, and stablecoin loans along with BTC, ETH, XRP, and other major cryptocurrency collaterals.
Suppose, you don’t have a certain cryptocurrency that you wish to deposit and earn interest from. In that case, you can convert another crypto you have to the one that you wish to deposit or fiat currency. The interest rates for stablecoins on YouHodlers are 12% annually and 4.8% for Bitcoin (BTC). This platform supports 15 cryptocurrencies, 7 stable coins, and 4 fiat currencies.
BlockFi is one of the most trusted financial services providers in the crypto market. It was founded in the year 2017. It provides market-leading rates with institutional-quality benefits. You can earn up to 8.6% interest rate on a wide array of cryptos including BTC, ETH, LTC, USDC, GUSD, and PAX.
You can buy stablecoins with your preferred fiat currency so that you can deposit the coin in an interest account and start earning interest. Interest Payment Flex is an exciting BlockFi feature, allowing users to choose the currency of the interest payments and diversify their portfolio without having to buy additional cryptocurrencies.
Buy Lending Crypto Assets Now
If you are ready to invest in PoS coins or buy Bitcoins through online brokers for beginners and pros, you can do so in a legit way by investing through cryptocurrency apps. You have to open an account with such a crypto exchange, verify details (including basic personal information), and then fund your cryptocurrency trading account.
You can start depositing funds to your crypto exchange account to buy cryptocurrencies by connecting your bank account (savings accounts or checking accounts), and then transferring fiat currency money online through bank transfer, credit cards, debit cards, and other payment options. If you need further assistance, you may consider taking help from the vibrant and helpful community. You can trade these cryptos with credit cards, debit cards, or other payment options through reliable crypto trading platforms.
In case you are bullish on the future prospects of staking crypto, you can buy them with USD or other fiat currencies of your choice. Once bought, transfer them to hot wallets (including mobile app wallets and software wallets) or cold wallets (including most secure hardware wallets) and hold them for a longer time period for a significant price appreciation. Keep your coins safe with Ledger Nano S, Trezor One, other Ledger and Trezor models, or other popular ones and stake them directly from there.
This will help you get a higher return in the long run, much more than investing in stocks, mutual funds, index funds, real estates, yield savings accounts, real estate investment trusts, fiat currency trading (forex trading), stock market, money market accounts, and others. In fact, many retirement funds or IRA accounts such as Roth IRA are allowing investors to purchase these altcoins.
Get better guidance on improving your personal finance, retirement planning, management of cash flows or capital gains, and investment ideas from financial advisors, wealth managers, and financial institutions, especially the ones who are not averse to Bitcoin and other cryptocurrencies.
Choose Cryptocurrency Copy-Trading Bots to Increase ROI
Cryptocurrency Trading Robots (such as NapBots.com) automatically scan the market in real-time and trade for you. They run 24×7, which means that you can keep earning your passive income even when you are sleeping. This gives you an edge over other investors as it enables the bot to book profits on your behalf when other investors are sleeping.
Smart crypto investors always remain prepared to get the best of a big market move. They don’t wake up suddenly. To remain alert round the clock, they use cryptocurrency trading bots so that they don’t miss any big market movement.
NapBots.com is a Trading Bot, cloud-based platform, on which you can connect to major exchanges such as Binance, Bitmex, Bitfinex, OKEX, Kraken, Bitstamp, and Bitpanda.
The best thing about the Napbots trading software is that you don’t have to monitor charts and candles to predict your next move. Any novice trader with zero skills can also start trading like a pro and earn money with this unique trading tool. Let Napbots take full control over your trades in just a few clicks. Now, sit back and enjoy earning money.
What’s so special about NapBots?
NapBots crypto trading software is special because it comes with:
- A unique trading algorithm that processes market data for you
- A unique crypto trading bot library so that you can create your own mix of trading strategies
- Autopilot mode that enables you to automate trading 24×7
- An easy-to-use interface so that you can copy the proven strategies of NapBots to make successful trades and make money
How does NapBots help you to Make Money?
With NapBots, you can enjoy financial independence by trading cryptocurrencies on autopilot mode and earn money automatically. To make it work on your behalf, you have to do the following:
Step #1: Connect to one of the available trust exchanges.
Step #2: Select from the unique list of performing Bots of NapBots
Step #3: Choose a plan that suits your investment style
Once you have completed these three steps, NapBots is ready to trade crypto and earn money for you. Happy Trading!
Why Choose NapBots?
- NapBots offers complete trading automation solutions through the use of its own tested trading strategies; offering quantitative trading strategies previously reserved for hedge funds to the public.
- The setup and installation process are easy. So, non-experts can also use it. The simple and special approach of NapBots helps it provide you with excellent ROI.
- The team of professionals behind NapBots has extensive experience in the financial market. They have put their years of experience in place so that you can easily automate the management of your funds with no technical skills. This service can run 24/7 and work as your passive source of revenue even when you sleep.
Pricing is simple and there are no setup fees. A 7-day trial is also available.
Are You Ready To Start Automating Your Passive Income Now?
If you still need assistance, you can refer to the following step-by-step purchasing guides for the various payment methods: