Crypto Lending - Pros and Cons
Crypto lending is the process of depositing cryptocurrency that is lent out to
borrowers in return for regular interest payments. Payments are made in
the form of the cryptocurrency that is deposited typically compound on a
daily, weekly, or monthly basis.
There are two main types of crypto lending platforms: decentralized crypto
lenders and centralized crypto lenders. Both offer access to high interest
rates, sometimes up to 20% annual percentage yield (APY), and both
typically require borrowers to deposit collateral to access a crypto loan.
● Cryptocurrency lending pays high interest rates for deposits.
● Crypto loans offer access to cash or crypto via collateralized loans.
● Crypto loans are inherently risky because margin calls may happen if
asset prices drop.
● Crypto lending platforms act as an intermediary for lenders and
borrowers, and both centralized and decentralized markets are