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EVERYTHING YOU NEED TO KNOW ABOUT CRYPTO LENDING

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Reading Time: 3 minutes

What if I told you there was a lending system where borrowers could get loans without credit checks and low-interest rates? And in return, the lenders could generate solid APYs (Annual Percentage Yields) and a passive income on their assets.

Sounds too good to be true, right?

Welcome to the world of crypto lending.

WHAT IS CRYPTO LENDING?

The term “crypto lending” refers to a DeFi (decentralized finance) service that lets investors lend their cryptocurrency holdings and get interest paid on a monthly or annual basis, something like the interest they could earn on a savings account in a bank but usually at much higher rates. APYs of 15% or more are not uncommon- depending on the platform and other conditions. And returns on cryptocurrency investments compound daily, weekly, or monthly.

HOW DOES CRYPTO LENDING WORK?

Platforms for cryptocurrency lending serve as middlemen between investors and those seeking to borrow cryptocurrency. Lenders deposit their cryptocurrency investments into high-interest lending accounts, while borrowers get loans via the lending network.

Interest rates are not standardized across platforms and vary across cryptocurrencies. Since the platform determines the interest rates for both lending and borrowing, it can manage its net interest margins. Lenders who are prepared to keep their cryptocurrency in a platform’s cold wallet for longer can often earn higher interest rates or APYs, and the platform itself might charge a fee for its services.

When dealing with centralized crypto lending, you put your trust in a third party to manage and facilitate your lending and borrowing needs. Borrowers and lenders must register accounts before they can submit loan applications. To use a decentralized crypto lending protocol, both the lender and borrower simply need to link their cryptocurrency wallets to the protocol. From there, the smart contracts that govern the lending and borrowing procedures are executed automatically. When certain conditions are met, a “smart contract,” a piece of code, will automatically run on blockchain networks.

HOW TO START CRYPTO LENDING

To participate as a crypto lender, you must first sign up for one of the best crypto lending platforms, such as crypto.com, BlockFi, or Nexo, and choose a cryptocurrency to deposit and transmit funds to the platform. In a decentralized market, investors get interest payments and bonuses in the form of the asset they invested in. When using a centralized cryptocurrency lending platform, the interest that is owed may either be paid in kind or with the native token of the platform.

WHAT ARE THE BENEFITS OF CRYPTO LENDING?

Cryptocurrency loans are an alternative to conventional secured loans, and they offer benefits that appeal to crypto lovers, such as:

  • Fast Funding
  • More Accessible
  • Faster
  • Lower Fees
  • Flexible Loan Terms
  • Safe and Secure
  • No Credit Check

TYPES OF CRYPTO LOANS AVAILABLE

There are a few distinct varieties of cryptocurrency loans available, including the following:

  • Crypto Line of Credit
  • Collateralized Loans
  • Uncollateralized Loans
  • Flash Loans

CRYPTO LENDING RATES

The interest rates on crypto lending differ between exchanges. Typical APYs are in double digits so expect rates from 10%. So choose your platform carefully to make sure you get the best return on your investment (ROI). Different cryptocurrency investment returns range from 2%-9%, while stablecoins have an APY range of 10%-20%. Two other things to keep in mind: The costs per coin differ across all investment platforms, and to maximize the use of your coins, you must choose a compatible platform.

DEFI CRYPTOCURRENCY INVESTMENT OPPORTUNITIES

One of the easiest and possibly most cost-effective and profitable ways to generate a passive income is through yield aggregators. The benefits of yield aggregators and farming are straightforward. If you already hold a cryptocurrency investment long-term, you may as well look to increase the return you can get on those holdings, and staking provides a low-risk way to generate extra returns.

With companies such as Bolide.fi, you can start with any amount and invest in a vast range of staking and farming options while choosing a risk strategy that best suits your risk appetite. Even better, there’s no lock-up period, and you can get APYs of up to 30%!

Here are some of the benefits of investing with Bolide:

A one-stop investment product with access to leading protocols

Automated, stablecoin investing produces maximum yields

Low risk, market-leading yields of up to 30% APY

Earn an extra 20% staking your BLID tokens and enjoy 11% APY on farming

Start investing with any amount

Hands-off, automated investments using your stablecoins

No lock-up period-access your funds and profits instantly

No withdrawal limitations

Starting your yield farming and staking journey is easy with platforms like Bolide. Simply visit Bolide.fi, connect your crypto wallet, deposit either $USDT / $USDC / $DAI or $BUSD, and you’re good to go.

Start earning interest at the speed of light with Bolide today!

For more information on generating a passive income on your cryptocurrency investments, visit Bolide. fi