Crypto Lending

6 Oct 2022

The act of depositing bitcoin to be lent to borrowers in exchange for recurrent interest payments is known as crypto lending. Payments are made in the form of cryptocurrency, which is commonly deposited and compounded every day, every week, or every month.
Decentralized and centralized crypto lenders are the two primary categories of crypto lending platforms. Both provide access to high interest rates, often as high as 20% annual percentage yield (APY), and both typically need depositing collateral in order to get a crypto loan.

The capacity to lend out cryptocurrency and earn interest in the form of cryptocurrency incentives is made available through cryptocurrency lending platforms for investors. In 2020, lending platforms gained popularity, and since then, the total value of loans locked on different platforms has increased to billions.

There are two parts to bitcoin lending: interest-bearing deposits and loans. Comparable to a bank account, deposit accounts have similar functions. The lending platform accepts bitcoin deposits from users and pays interest of up to 8% APY (depending on the platform and the cryptocurrency). Deposited money might be used by the platform to make loans to borrowers or for other kinds of investments.


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