compound: Best Crypto Lending platforms. How to earn on crypto loans in 2022

BD & Partnership Head

Which crypto lending platform would you recommend and why?

Crypto Lending Platform can be divided into CeFi (Centralized) and DeFi (Decentralized). CeFi is further divided into Exchanges and Platforms. Exchange: Binance, Gemini, VAULD, CoinDCX, etc; Binance has multiple crypto assets for stalking and also has SAFU insurance so is probably the safest, while CoinDCX gives 16% APY on stable coins. Platforms: NEXO, Celcius; Voyager, HARU, CABITAL, B2C2; Celcius had a good reputation but the recent BadgerDao hack exposed that they deploy user funds directly onto other platforms using Metamask for earning yield. So although user funds are protected, the act itself sets dangerous concerns. NEXO & HARU are similar in their ways of earning interest. CABITAL is a new entrant who are trying to do everything in a compliant manner. DeFi : MakerDAO. COMPOUND, AAVE; For ETH-backed loans, MakerDAO has is the better choice. COMPOUND gives COMP tokens (2-3%) to both borrowers and lenders. While AAVE has the max no of digital assets supported on its platform along with being the pioneer for providing flash loans.

How to earn on crypto loans?

So, for individuals, the main challenge is depositing fiat to crypto, so if you are considering saving in USD, you might as well take the opportunity to save in USDT as this would give higher interests than banks. So, any platform offering direct fiat deposit and conversion should be considered more profitable than using OTC to send USDT to the platform. In CeFi, Binance has many assets for staking and also the security of SAFU funds so most users can directly use it. In DeFi, COMPOUND is the better choice for individuals as they also get COMP tokens. Also, CABITAL, VAULD, etc offers direct deposit of FIAT and good yields on staking. For Institutions, choosing a platform should depend on the legal standing and in this regard, B2C2 & CABITAL is the better choice for CeFi and AAVE for DeFi. CABITAL is doing everything to get the related regualtory approvals while B2C2 is one of the largest market maker owned by SBI Capital. AAVE is the next generation of DeFi to invest in supporting the highest no of Crypto assets for asset collaterilization.

What are the main risks in the crypto lending process?

Crypto lenders earn interests in a few ways which are - 1. Borrowers pay high interests to Lenders to get loans for getting USDT for trading and this can well be over 30-40% annually. 2. Lenders can directly contribute to CeFi projects and they invest in other DeFi or lend to borrowers while lenders get a fixed yeild. 3. Lenders can directly contribute to USTD pools in DeFi and the DeFi allows borrowers to borrow against collateral. 4. Lenders can also put their USDT in the Binance (or other Crypto exchange) leverage pools and depending on market trends can earn profits, but this is strictly for technically equipped personnel. Risks- 1. DeFi hacks - Celcius had a good reputation but the recent BadgerDao hack exposed that they deploy user funds directly onto other platforms using Metamask for earning yield. While the process itself is normal but using a Metamask wallet exposed it to the front end hack suffered by Badger DAO. 2. In Sept, 2021 COMPOUND accidentally gave away 280K COMP tokens due to a pushing ahead with a bugged update, the reverse might also happen and users might loose funds due to vulnerabilities. 3. Besides backend and frontend vulnerabilities, smart contract vulnerabilities too can cause users to lose funds. 4. Last, but not the least if the yeild is too good to be true, it could definitely be a scam so do a through background check about the CeFi or DeFi before investing.

Crypto Article Author

Which crypto lending platform would you recommend and why?

Compound finance.. this is because they are centralized and they use collatratelization method to provide these loans. And they give opportunities to the community to gain more through their services.

How to earn on crypto loans?

You can become a lender by putting money to their pools and staking, which they give good APY for their user's. You will have stable returns from your investment.

What are the main risks in the crypto lending process?

Liquidation call, when the value of loan is exceeds the value of your collateral, you will get a liquidation call. This is is the risk found on compound finance.

Crypto Investor

Which crypto lending platform would you recommend and why?

Nexo and compound are the bets platforms available. Flexible fees, a variety of cryptos to choose from, ease of use. Simple interface and your funds are insured

How to earn on crypto loans?

You earn crypto by borrowing and lending. Both can earn you good profits if u know what to do. I prefer lending my cryptos, while earning good returns

What are the main risks in the crypto lending process?

Fraud, Rug pulls, hack attacks. Alot can go wrong in this space, proper decision making in choosing a good platform can not be over emphasised

Student

Which crypto lending platform would you recommend and why?

I recommend using Compound finance because it's truly decentralised and has a good reputation and TVL in the space, also coinbase in a recent article said they will use compound finance to stake DAI and give it's users exposure to defi lending APY.

How to earn on crypto loans?

We can earn through just lending our assets on the blockchain or we can borrow another asset against that to lend it somewhere else like curve or aave at a profit in APR. Like borrow at 5% and lend same asset at 7% or 8% and earn more than just once

What are the main risks in the crypto lending process?

The risks are the smart contract being hacked or any bug being exploited. Many projects which are audited also get hacked but it is had to say which one will het hacked next, generally devs compensate the users if they are at default but risk is always present. So DYOR before lending and borrowing.

Software engineer

Which crypto lending platform would you recommend and why?

Because I'm one of first crypto user, I'm still thinking that compound and Maker will stay the more trusted platform to lend crypto and get easily cash.

How to earn on crypto loans?

By making loan, you're betting that your crypto would increase more than asset (fiat based as stablecoins) you'd get. In fact you'll make gain on interest you get with platform (getting platform token, part of benefits) and by increase of your crypto

What are the main risks in the crypto lending process?

People using lending process have to take attention about ratio to avoid automatic end of contract (that means all crypto less). That's why we always have to be realistic in gain hope and take a carefull gap (also be aware about flash crash !)

STUDENT IN INFORMATICS & CRYPTO

Which crypto lending platform would you recommend and why?

I would recommend the Compound project, because it is one of the crypto loan projects. largest in the world, it is very easy to use as you only need a crypto wallet and Deposit cryptocurrencies in the compound protocol, be it ETH or DAI among others and obviously you will have to deposit more value than you can borrow and this will serve as a guarantee for the protocol.

How to earn on crypto loans?

simply adding liquidity to the projects that are to your liking and you will generate income from interests and other users They can apply for loans and the protocol will work correctly.

What are the main risks in the crypto lending process?

I say that the main risk is the volatility of cryptocurrencies and it could affect all users, both as lenders and borrowers, a sharp drop in price, You could take the full payment of the loan and the full deposit including the guarantee.

This is not a financial advice. Please do your own research and consider the risks of trading cryptocurrencies.