9 Best Cryptocurrency Lending Platforms 2022
Do cryptocurrency lending platforms pay four to five times more interest than conventional FD returns?
Crypto exchanges have been reported saying that lending digital coins can be compared to a risk-free fixed deposit just with better returns? How true are these highlights? Are cryptocurrency lending platforms worth your time and effort? Do they really offer so much profit?
Well, that is what this article is about. To understand it, we will look at what crypto lending actually is, then we shall see the problems associated with it, and then we will delve right into some popular cryptocurrency lending platforms and see how they work.
Stay tuned with us till the end to get a complete grasp of the concepts and ideas!
What we are going to learn?
What Is Cryptocurrency Lending?
Cryptocurrency lending is a process to lend your crypto to the companies and earn interest on regular intervals, much like traditional banking. Those companies give out loans to potential borrowers at a set interest for a set period. The amount they receive from these borrowers at the end of the time set, that they use to pay out the lenders who had locked their assets with the company.
So in crypto lending platforms you can either lend your assets and lock them for a certain period for a set interest rate or you can even borrow some amount at interest by keeping a fair amount of collateral for a set period. And this is how crypto lending platforms work!
Is Cryptocurrency Lending Safe?
The market of crypto is anyway volatile and thus never completely secure. But that should be the sole reason for you to not look for ways to increase your earnings. Yes, You lend and you get a return profit. But there are certain issues with it.
- One of them is that you need to note that you cannot liquidate your lent assets if their market value suddenly plummets, because they will be locked for a lending period.
- Another problem would be that of cyberattacks. Remember the crypto lending companies are centralized institutions and thus they have full control over the assets you lock. The attacks target lending platforms and can make the entire platform go bankrupt within minutes. In this case, you lose your assets too. But to combat this you need to analyze and choose lending platforms with better security.
- All of these platforms hold your crypto, which means they can do anything they want with it. They may stop withdrawals too abruptly without even informing you.
And as many industry insiders have been heard saying that these are the only risky or inconvenient aspects of crypto lending in general. Otherwise, crypto lending is pretty safe and a convenient way of stacking that extra amount of cherry on your earning cake!
9 Best Cryptocurrency Lending Platforms in 2022
Now that we understood what Crypto lending is and if it is safe, let us look at the top 9 cryptocurrency lending platforms.
One of the popular Cryptocurrency sites to earn interest, Vauld was started back in 2018. During this period they started out as a Bitcoin and Ethereum wallet. In 2019, they started providing facilities for lending and borrowing. And later on, they also started supporting different crypto exchanges.
Essentially their aim is to provide all kinds of banking facilities to crypto holders. They want users to be able to grow their capital by earning interest. They aim to provide a platform where users trade cryptos and engage in crypto to crypto exchanges.
It is a Singapore-based company that was previously known as Bank Of Hodlers. Its leadership is held by two Indians Darshan Bathija and Sanju Sony Kurian.
The platform has certain plans lined up for the feature that includes issuing credit cards, cross token payments, cross-border remittances, etc.
When talking about cryptocurrency, knowing about investors becomes important. And Vauld is backed by one of the largest names in the crypto field such as Pantera Capital, Valar, and Coinbase Ventures. These names do a lot for trust-building in potential users.
Another trust-building feature in Vauld is that it has partnered with Binance which is supposed to be the world’s largest crypto exchange thereby making the liquidity procedures easier and hassle-free.
Coming to the fees in Vauld, Vauld charges you 0 fees for deposits and withdrawals in Bitcoin and withdrawals in USDT as well.
In Interest Rates, Vauld gives 4.6% interest on savings, 6.7% for Fixed Deposit, and charges you 7.5% for borrowing. All this is viable for Bitcoin, Ethereum, and Ripple.
When it comes to USDT, Vauld gives 9.4% interest for saving, 12.5% for deposits, and charges 13% on borrowing.
It is quite users friendly and its deposits support UPI, IMEP, and RTGS methods. It also supports external wallets like Metamask.
Vauld supports trade in BTC and USDT.
In conclusion, there are some great features on the platform that allows users to trade in different cryptos, allow them to convert cryptos, loans are allowed by keeping cryptos as collateral, and a fixed deposit for 30 days is allowed along with an auto rental option.
The following are some borrowing rates in Vauld.
Also, there is no penalty for premature renewals, you will be paid interest for that time. And like in mutual funds sip can be done here in the form of Sip as you get to select the frequency of your investments.
CoinDCX is known as the biggest Crypto exchanges in India. It allows free sign-ups, and bank accounts addition details. You can also transfer money from this application to your digital wallet through UPI, IMPS, NEFT, RTGS, and MobiKwik.
Here you can invest as low as 100 rupees and the application allows limitless transactions. This has a feature that notifies you of your desired prices. For instance, you are planning on a coin but the price is not to your liking. Now if you tap the price alert button and enter your desired price, you will be notified as soon as this price comes up.
Apart from being a crypto exchange, CoinDCX is also a good lending platform. You can hold funds for 7-30 days and can start earning interest immediately.
Currently CoinDCX offers the following rates on your crypto:
|The Sandbox||5%||Lend SAND|
The minimum withdrawal value is 500 rupees.
It allows direct investment into top coins like Bitcoin, Ethereum, Litecoin, Tether, and Ripple.
It is ISO certified and secured by BitGo. Their help and support team is there 24/7.
- On Binance, interest is paid on fixed deposits. The process requires you to choose the token you want, subscribe to it, and choose the option of flexible, active, or lock from your spot wallet. The logic behind this is that the token will get stored here and the interest is paid on that. It is called the Annual Rate Of Interest. The highest interest rate can be upto 46%.
- Staking on the Binance trade earns a high-interest rate. You have to lock the amount for 30,60 or 90 days. And during this time you cannot touch that amount. And after the maturity date, the amount will be automatically credited to your wallet.
- Binance trade has the feature of a BNB wallet. This allows staking of BNB anytime, there is the feature of auto subscription and on payment, your spot wallet is credited automatically. Sometimes you are also eligible for rewards.
- On the Binance Margin platform Annual Interest Rate is 9.30% when borrowing USDT. And in the case of BTC/ETH, the interest is 3.1%.
- Note: There is a risk that in case of an in extreme price movement, all margin balances may be liquidated.
- Loan terms here are 7, 14, 30, 90, and 180 days. The borrowed amount should be 65% of the value of the collateral kept.
On the platform, more than 50 cryptos are available for you to trade.
- BitBNS charges the lender 15% of the trade fee and the borrower is not charged the fee.
- Its lending interest varies from 10% if less than 200 USD; to 20% if less than 500 USD. AND 33.33% on above 1000USD.
- The deposit fee is 0 in all cases.
- INR withdrawal fees except for instant withdrawals are charged 9 rupees. If you pay with BNS then less than 50 USD will be charged 10%, between 50 and 1000 they charge 30%.
Known to give APY up to 8%, Blockfi does not charge any deposit fee. But you can only use US dollars to make purchases that should be wire transfers. As you use USD your account shall get credited with 1:1 stable coins. These stable coins would be in the form of GUSD and can later be converted to whatever cryptocurrency you want. Although, this conversion might charge you some commission fee.
- Blockfi allows one free crypto withdrawal every month and one free stable coin withdrawal.
- You can take a loan from Blockfi for a 12 months period. The minimum amount is 10000 dollars. But in order to do that, you can collateralize a certain amount of your crypto.
- The collateral should be twice the amount of the deposit. The interest rate is dependent on the loan to value ratio. What is that? Loan to value ratio or LTV refers to that, the amount of loan you take, the value of that loan should not exceed the value of the crypto you have kept as collateral.
- There is a variation of 4.5% to 9.75% in the annual rate charged by Blockfi. The origination fee charged by Blockfi is 2%.
- There is no frequent change in interest rates of Blockfi. The interest is paid monthly in the crypto you have chosen for yourself. And the interest rates are dependent on how many coins you have deposited.
- As Blockfi allows you to earn interest in the crypto you choose, it makes the platform useful. It also helps in maintaining stability as you can choose to deposit one coin and later receive the interest through a coin with a better market cap.
Blockfi uses BitGo, Coinbase, and Gemini as their curator. Gemini offers insurance up to 200 million dollars.
- Celsius supports all kinds of fiat currencies like USD, Sterling, Canadian swiss, Australian Dollars, etc. It uses Gem as a payment partner and charges a commission from the trader. The commission varies with what currency you use.
- Celsius allows you to borrow cryptos as well. The minimum loan amount in Celsius is 500 dollars for 6 months.
- The crypto amount should be twice the loan amount.
- Celsius does not charge any origination fee. The rate of interest varies between 0.75% and 8.75%.
- Celsius has its own utility and native token CEL. So Additionally, if you decide to deposit some CEL Tokens you get even better interest rates.
- It offers trades in 40 plus digital assets.
- The internet is paid weekly in Celsius. And these weekly rates keep changing according to the market.
- Celsius’ security includes Fireblock and prime trust. Celsius is also known to offer insurance of 30 million USD.
Nexo allows users access to crypto-backed loans.
It features easy free signs ups and account setup. Once the account is set up and funded, the interest will be started to be counted daily and the amount credited automatically to the account. It notifies users every time how much interest is earned and when. There is no minimum limit on the deposit that is required to earn interests.
The unique feature of Nexo is its credit card that can be used for all local cryptos without the fire fee. It allows 2% cashback on usage and it is up to the user to choose to receive rewards in Bitcoin or Nexo Token. This Nexo token is basically used for loans and interests.
- 12% APR is provided on stablecoin; users can earn 8% on crypto like ETH, BTC, etc.
- Borrowing rates start at 0% and do not exceed 13.9%.
- Another unique thing is, that 30% of the profit made by Nexo is shared as dividends among the token holders.
- It covers transaction fees of the user account and thus the user only needs to pay the brokerage fee on the transfer of funds from exchange wallets to Nexo wallet. This fee varies with the exchange you use.
- Minimum and maximum limit if withdrawal varies with the type of crypto used.
Nexo has their own native token, and if you choose to earn interest in Nexo, you get extra interest. For example, if you choose to receive interest on stablecoins like USDT, or USDC in USDT or USDC respectively, you earn 10 percent APR, whereas if you wish to earn interest in Nexo tokens, you can earn upto 12 percent.
Note: Compared to platforms like BlockFi, Celsius and Crypto.com, Nexo offers highest interest rate on your crypto.
- Compared to other platforms crypto.com supports the most number of cryptocurrencies, that is 250 plus.
- You can earn up to 14.5% interest.
- It has its native token, CRO. This comes with its own benefits that include low trading fees, high staking interests high credit card rewards.
- Otherwise, the trading fee is 0.4% which decreases with increasing trade volume.
- It uses multifaceted authentication and whitelisting secure its accounts.
- HODLNAUT earn you up to 13.68% APY. It supports crypto assets like Bitcoins, Ethereum, Tether, DAI, etc.
- It also allows one free withdrawal per month.
- It is secured by a whitelisted address and Fireblock and two-factor authentication.
Cryptocurrency Lending in India 2022: FAQs
Is earning interest on Cryptocurrency deposits taxable?
Yes, according to Budget 2022-23, any profit you make on the crypto trade is subject to a 30% tax. So even if you earn an interest of 100 Rs. as interest on a crypto lending platform, you will have to pay 30% of that interest earned as tax.
What if I fail to pay back the Crypto loan?
If you fail to pay back the loan on time, your collateralized cryptocurrency will be cashed out and liquidated.
What is a Margin call?
Margin calls are potential threats. This happens when the value of your collateral plummets and does not stand for the amount you have borrowed. Here the lending platform can ask you to deposit more crypto till the loan to value ratio stabilizes. You cannot borrow more amounts till this stability occurs.
What is the difference between lending and staking?
Lending is loaning some amount of crypto to a borrower while staking refers to locking your crypto in the blockchain.
Are there crypto loans without collateral?
There might be very few platforms that can give out loans without collateral. But they are prone to charge a much higher amount of interest, and also chances of scams in this method are more.
Investing in cryptocurrency has become a trend these days. Trading is not for everyone. But if you are planning to hold crypto for long you can always opt for these crypto lending sites. These platforms pay interest on regular intervals.
These can provide you with collateralized crypto loans that earn you interest too.
But as we always say, this article is just some personal opinion expressed. It should not be treated as financial advice. As the market for cryptocurrency is volatile we suggest doing your own research, consulting a professional financial advisor if you want, and then proceeding only with cryptos and these sites.
Hope this article on ‘9 Best Cryptocurrency Lending platforms‘ was helpful enough!