Popular Crypto Defi Lending Platforms
If you are a crypto enthusiast, you would have come across various crypto market solutions. Also, if all of your crypto assets are at “HODL”, you need to pay attention to this article. You keep all of your tokens in your wallet for a long time, which is equivalent to depositing a certain amount in the bank, and watching it bring little or no interest daily. Most people wonder if there is something they can do other than keep their assets idle.
A solution called crypto lending is what you have been looking for. You are not only eligible to get the profit of your Bitcoin, but you get increased value from it by using it as collateral to acquire a loan. In doing all of that, there are decentralised lending platforms where you can apply for any size of loan which has the backing of stable coins. Such coins could be fiat, Ethereum, BTC, or USDC. Learn more about the crypto lending world by continuing with the popular crypto DeFi lending platforms.
What Is Defi Lending?
Credmark reports that as of Q4, 2019, the crypto lending market reached about $8 billion and has now exceeded $10 billion in lifetime loans. Defi is the alternative way crypto users and traders address decentralised finance. It is a system that aims to reinvent the norms obtained in financial capacities with the use of cryptocurrency. Defi lending involves using cryptocurrency to loan or borrow and earn interest, as you would do with fiat at the bank. This online lending market is where you will find lending platforms like Aave, dYdX, Zopa, Prosper, and others.
No regulator is serving as the intermediary, and borrowers cannot be held accountable because there are no physical assets as a means of collateral. The anonymousness is also heightened, as all of the trading is done with codes, algorithms, and smart contracts. All you need to do to get a loan is to push out your coin, which would serve as collateral to the wallet, which is issuing the loan. In perspective, a bank would give you an interest rate of 0.50% and then lend your money to gain 3% interest for them, pocketing the 2.5% profit. Defi allows you to earn the complete 3% yourself, as you would ultimately be in charge. Now the next section will look into the cryptocurrencies that are accepted in DeFi lending.
What Cryptocurrencies Are Involved in Defi Lending?
Not all cryptocurrencies are accepted in DeFi lending. This is because some factors like stability, trustworthiness, blockchain backing, amongst other factors, have to be used as criteria guiding the selection. Some of the currencies accepted include DAI, Ether, and USDC. These three coins mentioned have all of the characteristics highlighted previously; hence they qualify as stable coins received for DeFi lending.
What Are The Popular Crypto Defi Lending Platforms?
The most popular crypto DeFi lending platforms, which serve as the best crypto tools in 2021, includes and are not limited to the following:
This floating interest DeFi lending platform gives you mind-blowing interest rates far better than those of other platforms. You can decide to go for a shirt frame or long frame using ETH, DAI, or USDC, and it gives you five times more advantage. Crypto enthusiasts like dYdX because it gives them more control and value for their tokens.
With this platform, the rise of DEX gives you a cross margin between lending and borrowing and allows you to earn passive income even whilst your supporting assets have been exchanged according to the contract. This translates to earning interest from your asset, even though it is inactive trading. You also have insurance backing in the form of smart contract protection or coverage with the aid of Nexus Mutual.
This platform uses its native tokens named cTokens. It can track different lending pools and gives each asset its own cToken, be it in DAI, USDC, or ETH, where it has its highest returns. It also comes with a floating interest and is affiliated with the dashboards of asset management boards like InstaDapp, Zerion, Defi Saver, SaveDai, etc.
Aave has had several features transformed over the years to give the best values to crypto loaners and borrowers. It was known as ETHLend initially and used AAVE tokens, which tracks interest earned continuously. It has a floating interest rate and backs more than 20 variants of cryptocurrencies. You can decide to pay back with your collateral like Uniswap LP tokens and TokenSets, or just repay your loan manually.
This comes as a mobile-friendly app and is available on IOS and android app stores. It serves as a medium with which you can link your fiat account to a DEX. It does not operate like the regular banks, of course, as it uses multiple protocols not limited to Aave, Yearn, and others in lending and borrowing funds. It also comes with a floating interest rate and allows you to swap from USD to USDC quickly.
Coin Shark is not responsible for any content, accuracy, quality, advertising, products or other content posted on the site. The review is for informational purposes only, reflects only the opinion of the author and is not a proposal for action. The financial market is dangerous and full of risks, investments in cryptocurrencies can lead to losses. Users should do their own research before taking any action.