In this article, we will cover top 10 crypto lending platforms
Digital assets have unlocked the gates to a realm of surreal prospects. While the blockchain persistently keeps us in awe of cryptocurrencies, we’ve seen innovations of all kinds – from stablecoins to full blown DeFi projects. Now, lending is an integral part of the crypto business. With its volume set to increase to $5 billion, the crypto lending industry can sit back at leisure while the numbers talk.
But there are two kinds of crypto lending services thriving out there today.
There’s Centralized Finance, or CeFi lending portals, such as BlockFi, Nexo, or Crypto.com. And there’s DeFi, featuring InstaDapp, MakerDAO and more. As you may have guessed, on DeFi platforms, users rely on decentralized technology that works automatically in a trust-less fashion. They get a higher degree of control and transparency on their assets, albeit at the cost of some complexity.
On the other hand, on CeFi lending platforms, users rely on a business the traditional way – to manage their assets and funds and execute the services. While there are proponents of both pmodels, it’s undeniable that both DeFi and CeFi do indeed deliver on a wide range of cryptocurrency-related financial services competently, and are widely popular.
With bigshots cruising the cyber sea, selecting the best crypto lending projects to invest in, can be a tough nut to crack. No worries, we have cherry-picked the extraordinary from the herd – the best crypto lending platforms in 2021.
Formerly known as EthLend, AAVE brought into existence by Stani Kulechov, was a result of his frustration at the dearth of decentralized Ethereum lending apps, at a time when DeFi projects were non-existent. One of the best DeFi projects out there in 2021, AAVE extends users an ample choices, allowing them to borrow and lend in nearly 20 cryptocurrencies. AAVE offers up to 6% APR on BTC, and as high as 10 to 2.35% on stablecoins like DAI and USDC.
Aave’s spinoff “flash loans,” though obliging to be repaid in the same transaction, are the first uncollateralized loan alternatives in the DeFi space. They charge a 0.30% fee on flash loans
Another USP is that borrowers can oscillate between stabilized and variable interest rates, both of which come in handy in the dynamic marketspace.
As of March 2021.
In November 2017,ETHLend ICO hauled $600,000 worth of Ether in exchange for 1 billion LEND tokens. AAVE is expected to soon let users borrow fee-collecting tokens like Uniswap LP tokens and TokenSets, in addition to the preexisting ETH, DAI and USDC. The Ethereum-based assets AAVE supports include:
Basic Attention Token (BAT), Dai (DAI), Ethereum (ETH), Kyber Network (KNC), Aave (LEND), ChainLink (LINK), Decentraland (MANA), Maker (MKR), Augur (REP), Synthetix (SNX), TrueUSD (TUSD), USD Coin (USDC), Tether (USDT), Wrapped BTC (WBTC), 0x (ZRX), Synthetix USD (SUSD), Uniswap (UNI) and Ren Protocol (REN) etc.
The first-ever investment by crypto exchange giant Coinbase’s new investment fund, Compound Labs’ biggest DeFi lending platform Compound lets you lease and lend Ethereum tokens on a short-term footing at algorithmically deduced rates. Giving you a say in governing the crypto you borrow, with its native COMP token, Compound is here to establish liquid money markets.
COMP is the governance token of the Compound protocol. A predetermined fraction of the token is allocated to all lenders and borrowers on the Compound protocol everyday. COMP diffusions happen every time an Ethereum block is shoveled (roughly every 15 seconds) in a portion proportional to the interest accrued by each possession.
The governance of Compound through the COMP token intends for eliminating a substantial and centralized point of failure: the Compound team. If you own at least 1% of the total COMP store, you can submit and vote on recommendations to alter the protocol. Every COMP token symbolizes one vote.
Compound v2 supports asset
With a record of more than $3 billion worth of transactions for over 800,000 clients in 200 countries, Nexo users can reap interest in their crypto or fiat assets inserted in the interest account. The interest rates for crypto lived at 5% and up to 10% for stablecoins and are paid out daily.
Their team, adept at FinTech and blockchain, believes in sowing the seeds of the future of finance. The Nexo card with negligible fee (monthly/annually), isn’t just widely acknowledged owing to its payments in local currencies, it provides instant 2% cash back for every investment with an adaptable repayment option. Lending rates are as high as 8% on BTC – fairly high for the industry – and a whopping 12% on Tether, another high.
Since its inception in 2017, BlockFi, a NYI-based crypto lending platform has never ceased to deliver rates less competitive than those on your non-cryptocurrency accounts. It gives you a shot at pocketing up to 8.6% annual interest rate on BTC, ETH, LTC, USDC, GUSD, and PAX.
You can stablecoins with fiat currency at your discretion, deposit them in the interest account and voila, start earning! That’s not all. Their Interest Payment Flex lets you hand-pick the currency of interest payments, without securing extra crypto assets. You shouldn’t be surprised to know that World Gold Council’s top manager, Greg Collet joined BlockFi as the firm’s new head of investment products, on 4th March, 2021.
Support coins are the standard suite of ETH, BTC and stabelcoins, with interest ranges ranging from 5.5% on LINK to as much as 9.3% on USDT.
This all-powerful open finance protocol, bZx, empowers DeFi in shorting, leverage, borrowing, and lending. The enormous difference between bZx and others is in its three tokens, viz. iTokens, p tokens, and the BZRX token.
When lenders replenish funds to liquidity pools they earn iTokens prefaced with an “i” to illustrate the lender’s claim on their supplied budgets.
iTokens can also earn compound interest. These tokens can be redeemed for the actual funds plus interest at any period.
When users lease funds to open trading positions on margin, they obtain pTokens where “p” stands for position and can depict either the long or short side of a margin trading position. Further, users can also receive iTokens and pTokens on certain DEXs like Uniswap and Kyber. Commonly, however, these are bZx made.
bZx is similar to dYdX only difference being the team’s goal to ensure “everything is tokenized.” bZx also discerns itself in how it incentivizes yield farming by rewarding active users with half of the fees payable through their BZRX token. BzX has also been offering enormous yields on Ethereum staking, as high as 40% in 2020. In 2021, it continues to offer a whopping 13% on DAI lending.
Formerly known as b0x.network,bZx conducted an ICO (December,2018) raising $7.8M of the targeted $36.5M hard cap.
The US-originated full-featured decentralized exchange – dYdX – is known for perpetual, spot, and margin trading as well as borrowing/lending pools on Ethereum.
Established in 2017 by Antonio Juliano, it claims to offer one of the most liquid order books across decentralized exchanges. With the starting deposit just $10, you can leverage endless contracts with low fees, deep liquidity and 25 times more buying power. Trades are enforced promptly and corroborated on the blockchain within hours. Interest rates can be as high as 6.36% on stablecoins like USDC, although they are lower – around 1.4-1.5% on coins like BAT and COMP.
A multinational trading platform MakerDAO facilitates the production of Dai, the world’s first impartial money and a dominating decentralized stable coin. It consents borrowers to wield unstable cryptocurrency as collateral for loans of stablecoins (called dai) pegged to the U.S. dollar. The borrower reimburses interest on the loans, sometimes, the crypto collateral is sold to pay off the loan.
This EU company with its tagline “Keep Crypto. Use Cash” equips you with USD, EUR, CHF, GBP, EUR, and stablecoin loans, with collaterals in BTC, ETH, XRP, and other sizable cryptocurrencies.
Worried about not having enough crypto that you can deposit and earn returns from, well don’t deter your resolve. This Switzerland-based platform lets you convert from other crypto or fiat currency!
Moreover, with the highest loan to value ratio (90%), 12% APR+ compound interest on several coins (USDT, PAX, DAI, USDC etc) and minimum loans starting at $100, they accept over top 20 coins for lending.
One of the most rapidly growing startups in the world, in 2019, Instadapp raised $2.4 million led by Pantera Capital. They use a DeFi portal that aggregates major protocols using a smart wallet layer and bridge contracts, making it easy for users to make the best decision about assets and execute previously complex transactions seamlessly. The interest rates therefore, are a function of the services you connect to, and the coins you pick on them.
According to DeFi Pulse, InstaDapp is the fourth-largest Dapp in DeFi, with $30.8 million worth of assets locked in its smart contracts (up from only $4.2 million in early July).
Known as the fastest growing crypto app globally, this platform with headquarters in HongKong offers deep liquidity, minimal fees and the best possible execution prices. With over 3 million users since 2016 when it started, it has over 3 million users.
Crypto.com’s MCO Visa Card lets you convert your crypto currency to fiat and spend. Their credit scheme enables you to get credits instantaneously to spend on your MCO Visa Card. With support for BTC, ETH, BNB, ADA, USDT, DOT and frankly, dozens of other coins – we’re spoilt for choice here. The interest rates vary from 3% on most coins to as high as 6.5% on Bitcoin and even 12% on USD Coin.
Which Crypto Lending Platform Should You Pick?
All in all, they say “there ain’t no such thing as a free lunch”. You’re going to have to spend some time to determine the best crypto lending platform for you. Hopefully, this list has made your quest easier. In current times, with the borrowers multiplying and deficiency of lenders, interest rates for borrowing cryptocurrencies can be anywhere from 2% for stablecoins to 10%+ for other cryptocurrencies.
With distinct custodial and non-custodial crypto lending platforms taking over the throne, While choosing between platforms, investors are hereby encouraged to assess the returns, determine if they are worth the risks involved to ensure that it fits within their overall investment risk tolerance and requirements. Some platforms provide insurance while others entail much higher risk.
Do check out our other curated lists as well.
ItsBlockchain | Cryptocurrency Trading and Investment Blog is India’s oldest and first publication platform for blockchain and cryptocurrency. They are the one-stop destination for crypto recommendations, tips, technical analysis, and blockchain-based technology resources.
Hitesh Malviya is the Founder of ItsBlockchain. He is one of the most early adopters of blockchain & cryptocurrency enthusiast in India. After being into space for a few years, he started IBC in 2016 to help other early adopters learn about the technology.
Before IBC, Hitesh has founded 4 companies in the cyber security & IT space.
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