In recent years, many people have been left wondering what the future of finance might look like, especially as it relates to cryptocurrency. Financial institutions around the world are currently thinking up new ways to manage traditional fiat currencies and blockchain-based assets at the same time. In a market where anything can happen and everything is still largely unregulated, there are plenty of opportunities for those who want it bad enough. Crypto lending platforms offer a great example of this opportunity in action.
By definition, a crypto lending platform is any business entity that facilitates loans using cryptocurrencies as collateral. In some cases, you can deposit your coins on an exchange or wallet provider’s account and borrow cash from them without even having to sell your coins. More often, however, crypto lending platforms are third-party services that work with lenders directly to offer their users the opportunity of borrowing against their purchased cryptocurrencies for a specific period at pre-determined interest rates.
So, if you are interested in getting involved in a crypto lending platform as a borrower, here are your top options:
Nexo
Nexo, which is another blockchain-based startup, offers users the possibility of receiving instant loans in fiat currencies against their crypto assets. All you have to do is go to the website and check the box that says “Get Instant Loan.” This service charges lower interest rates than any bank would, but it’s important to note that they don’t offer cryptocurrency deposits. What this means is that all transactions are processed off-chain because Nexo can’t risk losing track of your funds. Another reason why you should learn more on Nexo is that they have a pretty generous affiliate program. You can get a stunning 50% on all the interest your referrals pay, which is more than what most banks offer on their savings accounts.
ETH Lend
ETHLend is a decentralized peer-to-peer lending service that runs on the Ethereum blockchain. You can think of ETHlend as a modern, digitized version of a bank that just happens to have no central authority overseeing its day-to-day operations. The platform works by looking at the current market value of the cryptocurrency you want to borrow against and then setting your interest rate based on what they determine it will be able to fetch during the next 30 days. Your collateral remains in your control throughout this whole process, but if you miss a payment or don’t pay it back on time, they will automatically liquidate your coins and use them to purchase these tokens from someone else for themselves. The best thing about this platform is that deposit is not needed.
Celsius
Celsius is another crypto lending service that works with both borrowers and lenders alike. Borrowers can get cash against their cryptocurrencies at lower interest rates than what is offered by most banks, while lenders can potentially loan out the funds they already have and earn better returns than what a traditional savings account would provide. The way this platform works is simple: you just need to sign up on the website and confirm your identity to enable you to borrow or lend money. The company itself generates revenue through an internal trading desk that holds all of the coins it has in its possession for other users who want to either buy or sell them.
SALT Lending
SALT stands for Secured Automated Lending Technology. This crypto lending service offers users the opportunity of borrowing cash against their blockchain assets at very low rates by using SALT tokens as collateral. The company was initially known for being a platform that just specifically focused on Ethereum-based tokens, but they have recently changed their business model to allow users to borrow against both Bitcoin and the US dollar. This is probably one of the most established crypto lending platforms in the industry today, which is not surprising since it’s backed by many large investors like Blockchain Capital. The company’s annual interest rates are set to an average of 19.99% – 24.49%, which is much higher than the interest paid when you use a credit card or other consumer loan product.
Lendo
Lendo is an interesting crypto lending platform because it has been built from the ground up with general users in mind. In terms of the way it works, you just need to install their app and run a credit check using your Facebook account. Once this is done, you can choose the loan amount of your choice and select whether you want to use Ether or Bitcoin as collateral. Lendo does not offer fiat loans at this time, which means that all transactions are automatically executed through smart contracts and the platform only accepts cryptocurrencies. Another important thing to note about this company is that they have no hidden fees. They charge a flat interest rate of 8% per year, which makes it very competitive compared to most lending services available today.
Bitbond
Bitbond is one of the few crypto lending platforms that have some regulatory oversight as it’s registered as a small-business loan provider with the German government. This means that potential borrowers can use Bitbond to borrow against their BTC and other cryptocurrency assets at rates that are significantly lower than what most banks would charge them, which is great for business owners and freelancers who need money fast and don’t have time to wait for lengthy bank procedures. The platform does its best to ensure transparency by publishing every loan request on its website so lenders can decide which ones they want to finance before offering funds. Just like with some other crypto lending platforms, you can earn up to 30% interest on your loan if you refer someone else to the service.
These services all work in basically the same way, but they do have one or two specific features that make them stand out from their competitors. The best thing about going this route is the fact that borrowing money against your cryptocurrencies won’t add any additional fees, making it a much cheaper method than using a credit card or taking on some other form of debt. So, if you’re looking for a new way to leverage your crypto assets, then you should check them out.
