Crypto Lending
Crypto Lending refers to the process where individuals or institutions lend their Cryptocurrency to borrowers in exchange for interest payments. This practice typically occurs on Decentralized Finance (DeFi) platforms or through centralized exchanges. Lenders can earn Passive Income by allowing their crypto Assets to be used by others, while borrowers can access funds without selling their crypto holdings.
For example, a user might lend 1 Bitcoin (BTC) on a platform like BlockFi or Aave, receiving interest payments in the form of additional BTC or a stablecoin. Conversely, a trader seeking Liquidity might borrow 0.5 BTC to Capitalize on a market opportunity, using their existing crypto as Collateral.
Cases include:
- Decentralized Platforms: Aave, Compound, and Maker allow users to lend and borrow without intermediaries, often offering attractive Interest Rates.
- Centralized Exchanges: Platforms like Binance or Coinbase provide lending services with a more user-friendly interface but might have different terms and Interest Rates.
- Peer-to-Peer Lending: Services such as Celsius or Nexo connect lenders directly with borrowers, facilitating personalized loan terms and Interest Rates.