How to lend your crypto on DeFi?
Asked 4 years ago
Hi, I think that the idea of lending cryptocurrencies on a DEX exchange could be a good one. Has anyone ever done this? How do you recommend doing it?
Odin Clarke
Monday, April 25, 2022
If you want to become a DeFi lender, you simply deposit your crypto assets into a DeFi lending protocol, like MakerDao, Aave, and Compound. In return, you will receive newly-minted DeFi tokens applicable to the protocol. For example, you will earn Dai for lending crypto in MakerDao protocol, cTokens for Compound, and aTokens for Aave. These reward tokens are basically the principal and interest of the loaned funds. The exchange rate between the native tokens and the deposited crypto is set in the annual percentage yield (APY). I highly recommend DeFi lending because it is permissionless, transparent, immutable, interoperable, programmable, and self-custody.
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