6 Best Crypto Lending Platforms in 2022
Published July 1, 2022.
The idea of crypto lending is the same as the traditional version; however, there is one key difference. Investors lend crypto assets on a platform instead of fiat currency. As a result, borrowers can receive loans from various platforms for trading and other purposes. In addition, investors can earn passive income for the amount they've loaned to borrowers.
Different Types of Crypto Loan Platforms
There are two different types of crypto lending platforms on the market. Let's discuss them briefly:
Centralized Crypto Lending Platforms
Centralized crypto lending platforms are quite similar to banking institutes. Platforms like BlockFi enable users to earn interest on crypto assets via storing funds on its platform. Your money is then lent out to trusted corporate buyers, etc.
Decentralized Finance (DeFi) Platforms
These platforms use smart contracts to replace centralized third parties in transactions. So, for example, rather than having your bank manage the loan, it uses escrow accounts and code to manage funds autonomously.
Smart contracts allow you to take out a DeFi loan without credit. For instance, taking out a loan for cryptocurrency requires adding collateral to the smart contract and then choosing the type of crypto you want your loan in. Keep in mind that staking DeFi is different.
6 Best Crypto Lending Platforms
Some crypto borrowing platforms are better than others, so we've compiled a list of our top six. Check it out below:
BlockFi is one of the best all-around lending platforms for crypto holders and borrowers. All major DeFi tokens are supported, there are no deposit limits, withdrawals are flexible, and the setup is simple. Some of BlockFi's primary benefits include:
- High security
- Compound interest
- Low administration fees
- Zero-fee trading
Nexo is an excellent choice for users concerned with safety and security. All major tokens are supported, including other forms of cryptocurrency. Users can enjoy competitive interest rates and no deposit limits. Some of Nexo's other benefits include:
- Cold storage
- Decentralized Insurance
- Daily payouts
- Multiple fiat currency support
3. Celsius Network
Celsius Network is an excellent choice for borrowers. All major tokens are supported, and there are no platform fees and flexible withdrawals. There are also no deposit limits. Other benefits offered by Celsius Network include:
- Flexible loan options
- Low-interest rates
- ISO 27001 certified
Binance is an excellent option for those looking to use multiple cryptocurrencies. More than 100 more minor currencies and all popular tokens are accepted. Binance also offers users an easy-to-use interface and regular updates on the coin value. Further benefits include:
- Fixed and flexible options
- Flexible interest rates
- High usability
- Instant loans (verification-free)
CoinLoan is favored for its transparency with its users. The platform offers unlimited withdrawals and fast verification. All major tokens are accepted, including a handful of smaller currencies. CoinLoan's other main benefits include:
- Flexible loan terms
- Rate comparison tools
- High security
Aave is a good choice for decentralized lending. Ethereum-based tokens are accepted, and there is no use of intermediaries (peer-to-peer lending). The platform has the following additional benefits:
- Open-source software
- Few limitations
- Community governance
Which Crypto Lending Platforms Are the Worst?
Platforms that have newly emerged are probably the last option you'll want to go with. Not to say that these crypto lending platforms will fail, but that more well-established platforms are more reliable and trusted.
To avoid choosing a risky or unstable platform, go with one of our choices from the list above.
Factors to Consider When Choosing a Lending Platform
You'll need to consider several factors when choosing your lending platform. Some key questions you'll need to assess include:
- Are you a borrower or a lender?
- What tokens does the platform accept?
- What are the interest rates for that platform?
- What are the risks for that platform?
- Are there fixed and flexible options?
- What fees are involved?
- What is the set deposit limit?
- How much collateral is required for a specific loan amount?
The best platform to meet your requirements will depend on a number of factors. Be sure to do thorough research beforehand on a few different lending platforms before deciding.