What Is Lending Coin? Top Best Lending Platforms

June 8, 2022 - Around 13 mins mins to read

Lending coin is not a strange word for investors, especially in the field of cryptocurrency. There are so many sources of information surrounding this platform that we, who are new to the world of crypto lending, feel lost in the middle of a mess of information. Let’s learn about this topic with CoinCu.

What is lending coin?

Lending is a form of using an official base currency like Bitcoin and Ethereum to buy new crypto with a Lending mechanism. Most of them only accept Bitcoin and Ethereum because these are official cryptocurrencies with high liquidity.

You can hold the coin and wait for it to appreciate. Then bring it to the exchange to sell if you find the price suitable. If you choose to receive monthly interest, you will receive interest on a daily, weekly, or monthly basis in USD.

Cryptocurrencies like Bitcoin were introduced as a peer-to-peer (P2P) payment method. Later, Ethereum was introduced which had the properties of Bitcoin plus another smart feature of self-executing the contracts powered by the Ether token.

And after that, many other cryptocurrencies were added. Although Bitcoin/Ethereum is being used to make transactions, it is mainly used for “investment or store of value” along with other cryptocurrencies.

How coin lending platform works

Lending platforms work by connecting borrowers with a network of lenders registered on the platform. To get permission to borrow money, borrowers first need to collateralize their cryptocurrency.

The lender will lend the borrower the equivalent amount and they will earn interest on it. Once, the borrower repays the loan with interest and gets his crypto assets back from the coin lending platform.

For lenders, this can be an opportunity to earn some interest by lending money to other users. At the same time, borrowers will avoid pressure to sell cryptocurrencies when they feel that their prices could rise further in the future.

There are a number of ICOs (Initial Coin Offering – a form of fundraising by startups in the cryptocurrency and Blockchain industries) that have joined the coin lending platform and made the whole process a breeze and more democratic.

How to choose a cryptocurrency lending platform?

There are several factors that you need to consider while selecting any lending platform. Some of the key factors to consider are:

Interest rates – Choose a platform based on the interest rate of that particular coin on any specific platform.
Platform risks – Go through the track record of the platform for a better understanding.
Fees – Compare the costs of different platforms for different coins.
Deposit limit – See to it if there is any minimum deposit amount requirement or not.
Lending duration – Check if it is fixed or not.
Collateral – Compare the amount of collateral you need to get a specific loan amount among different platforms.

The most important point is that you should select the right platform for a particular coin. For instance, if you see that Binance provides better returns for lending Bitcoin, you should consider Binance for bitcoins.

You don’t need to lend all other cryptos on the same platform. You should research other platforms to find out where you can get better returns for your chosen cryptocurrency.

On the other hand, the borrowers should compare different platforms to see where they can get a crypto loan at the lowest interest rate for their crypto asset.

Top best lending platforms

CoinRabbit

When it comes to crypto lending, there is the simplest and fastest solution: CoinRabbit. The simple interface and a non-KYC approach (you only need your email or phone number to create an account) make CoinRabbit the best choice for beginners as well as for experts who value their time.

Despite the simplicity of use, CoinRabbit pays much attention to the security of clients’ funds. Multiple security and AML checks are always carried out. After receiving the funds, they are separately withdrawn to the system of cold wallets. Besides, you can always protect your account with 2FA additional protection.

The APR is just 1.2% per month and is supplemented by completely free withdrawals available anytime and unlimited time frames for your loans — repay them partially or in full when feeling that the time has come. Plus CoinRabbit provides the system to decrease your liquidation price as flexible as you want.

For those who want to make some decent passive income, CoinRabbit makes the process easy and fast. Fixed 10% APY with no additional conditions is by far the highest in the whole market. The interest is paid out on a daily basis and you choose when to withdraw your profit.

Despite the fact that the service is still very young, it is rapidly gaining momentum and has already established itself in the community of many crypto coins and cooperates in close partnership with such big market players as ChangeNOW, Guarda Wallet, Atomic Wallet, etc.

Blockfi

Blockfi is the one-stop solution for buying, selling, and earning cryptocurrency. You can expect up to 8.5% APY on different cryptocurrencies, where you will be paid monthly. There are no hidden charges or minimum balance requirements that you need to worry about. You can store all your crypto assets in one place and also make them earn more for you.

If you require urgent cash, you can borrow funds from Blockfi by staking your crypto assets. You can borrow money at 4.5% APR. It is a pretty simple process to open an account on Blockfi, where you only need to enter a few details, and you are good to go.

The best thing about Blockfi is that it is an ideal choice for people of all expertise levels. If you are a beginner, you can expect complete information about crypto from the service managers. On the other hand, if you are an expert, you can get support for your queries. The security system of Blockfi is top-notch to safeguard your crypto assets.

Celsius

When it comes to lending and borrowing cryptocurrencies, Celsius is a huge name. You can earn up to a 17% yield when you lend crypto on the Celsius network. You don’t have to pay any fees, whether borrowing, lending, or transferring the coins. Another fantastic thing is that you can find Celsius on both web and application formats.

You can expect up to 17% APY (Annual Percentage Yield) that will be paid to you every week. No matter what crypto you are lending on the platform, you will see excellent rates. On top of that, if you choose to earn in CEL token (exclusive to the Celsius portal), then you can expect 25% more rewards.

When you visit the Celsius website, you can find a calculator to see how much you can earn based on the crypto you select and the duration inserted by you. If you need emergency funding, there is no need to sell your crypto because you can stake it as collateral and borrow funds from Celsius for interests as low as 1% APR (Annual Percentage Rate).

Crypto.com

Next up we have Crypto.com, which is home to some of the best crypto lending rates in the market for stablecoins, as well as offering the best crypto credit and debit cards with great crypto rewards. To give you an example of how competitive this popular altcoin exchange is, Crypto.com offers an APY of 6% on stablecoins like USD Coin, Tether, TrueUSD, and Paxos Standard.

And, best of all, to earn this APY of 6% – there is no requirement to lock your tokens up for a minimum amount of time.

With that said, we like the fact that Crypto.com offers even higher yields when you decide to lock up your stablecoins for either one or three months. While the former pays an APY of 8%, the latter increases the yield to 10%. And, should you decide to stake a minimum number of CRO tokens, even higher interest rates are offered. Take note, in addition to stablecoins, Crypto.com supports lots of standard digital tokens.

AAVE

AAVE is a pretty famous decentralized liquidity protocol. It is a non-custodial protocol where you can earn interest on your crypto deposits and also borrow funds by staking your assets. AAVE is a well-developed liquidity protocol with plenty of features other than lending and borrowing crypto assets.

When you move through the platform, you will see that it allows the users to deposit or borrow assets. The interest rates are also clearly mentioned to make it easy for you to compare the deposit and borrow rates on different platforms.

There are different concepts involved in AAVE Protocol like Bug Bounty and Flash Loans. The fascinating thing is that if you see any bug and report it to the developers, you can even get up to $250,000 from the developers’ community in USDC tokens. So, this is definitely worth exploring!

Compound

Compound is another big name in the world of crypto protocols for lending and borrowing. There are plenty of cryptocurrencies listed on the protocol, and you can deposit or borrow any of them. Compound also has its own COMP token that can yield better returns while lending your crypto to the platform to provide liquidity.

The security of the protocol is top-notch, so you can rely on it for your assets. There is a live price feed on Compound to easily track the prices on the platform based on the availability of liquidity. You can deposit or withdraw assets from your account every 24 hours.

Other than that, Compound is also building plenty of products, services, and tools for the decentralized finance (DeFi) ecosystem. You can even integrate different interfaces with the Compound Protocol.

MakerDAO

MakerDAO has come up with its cryptocurrency named “Dai.” It can be used by anyone, anytime, and anywhere. As soon as you open a vault on Maker, you can deposit up to 25+ crypto assets as collateral. Now, you have two options after putting your crypto asset as collateral. You can either borrow Dai and hold onto it or purchase additional collateral to increase your exposure.

The Maker community has successfully built a complete ecosystem with Dai that consists of various apps and services. You can find the right app for getting, using, holding, and even accepting Dai in the ecosystem. Other than that, there are plenty of Games on the Maker protocol, among which Sandbox has gained massive attention.

CoinLoan

CoinLoan is another trusted platform available on both Android and iOS to manage all your digital assets. There are no deposit and withdrawal fees that you need to worry about. On top of that, you can also enjoy daily interest by simply placing your assets on the platform.

You can borrow cash in exchange for your crypto assets by staking them as collateral. The official website mentions all the supported crypto-assets and their rates. Other than that, whether you wish to buy, sell, or swap your crypto, you can make it happen with a few clicks.

With CoinLoan, you can expect the complete safety of all your assets. There is biometric authentication provided in the apps for enhanced security of all your digital assets.

YouHodler

Using YouHodler, you can get a cryptocurrency loan in any of the top 15 coins with up to a 90% loan-to-value ratio (LTV). You can use YouHodler for storing, exchanging, and even paying anyone through crypto-assets. You can get instant cash by putting your crypto as collateral. The best thing is you can get a loan in Bitcoin (BTC), Tether (USDT), USD, EUR, CHF, or GBP.

On top of that, you can get a loan even for $100. You can exchange your assets into different forms with the universal conversion in YouHodler. By simply depositing your crypto in YouHodler, you can earn interest up to 12% on various cryptocurrencies and stablecoins.

Another fascinating feature is the Multi HODL feature. This is an efficient tool that will help you multiply your favorite cryptocurrencies where you have to place small bets, and there are pretty high investment rewards provided.

Nexo

Nexo is a hugely popular crypto lending site that not only offers a large number of supported tokens but highly attractive APYs. In a similar nature to Crypto.com, Nexo allows you to increase the amount of interest earned when you stake its native digital token. For example, if you’re looking to earn a yield of Bitcoin, you can earn an APY of 6% without staking.

But, by staking Nexo, this APR is increased to 8%. If you’re looking to diversify into other digital currencies, you earn 9/11% on ATOM, 14/16% on MATIC, and 16/18% on FTM. Stablecoins like USDT, GBPX, and EURX are also supported with various APYs – most of which are attractive when compared to the industry average.

Regardless of which digital token you decide to earn interest on – and whether or not you wish to stake Nexo, no lock-up periods are in place.

Binance

Binance is the world’s leading cryptocurrency exchange, with 1,400,000+ transactions taking place every second. Other than being the leading cryptocurrency exchange, Binance has built its own ecosystem. Binance has also launched a coin named “BNB.”

The main aim of Binance is to increase the level of decentralized finance around the globe. Currently, there are plenty of service providers building their blockchain applications on the Binance ecosystem.

You can say that Binance is a one-stop solution for everything in the blockchain world. Whether you wish to buy, sell, exchange, or trade your crypto asset or even get a loan or lend your crypto asset, you can do it all over here. You can even become a liquidity provider on Binance to get much better rewards. On top of that, Binance has also built its own NFT marketplace to develop a place where the creators can auction their NFTs.

Binance is a lot more than only a lending and borrowing platform. You can perform any task related to blockchain on the Binance ecosystem.

Conclusion

If you are in the crypto world, then you should definitely consider lending options. You can earn high interest on your crypto assets by lending them on different platforms.

All you need to do is the deposit and provide liquidity on different platforms instead of just keeping them in your wallet. This is the best way to gain passive income.

Hopefully, the article will help you learn more about the working mechanism of crypto lending and help you earn profits.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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