Lending crypto has become a popular way to get involved in the cryptocurrency world. It is also a way to generate passive income. Users can lend crypto in exchange for interest on their holdings. Some people that want to get involved with cryptocurrency but don’t have enough capital, may find crypto loans an easy way to start out. Others just want a passive income. To get started I’ve put together a guide on how to lend crypto.
DISCLAIMER: This is a sponsored post. I am not a financial advisor. Please seek professional financial advice when investing. Please always do your own research before making an investment. When you invest, your money is at risk and your capital is at risk. You must be satisfied that crypto offering is suitable for you in light of your financial circumstances and attitude towards risk.
How crypto lending works
So how does crypto lending work? Crypto loans are a form of digital currency-based lending that is becoming increasingly popular in the financial sector. Lenders offer loans in cryptocurrency and they are repaid with interest in the same cryptocurrency. These loans are collateralised by crypto assets and often do not require any credit history or credit score.
The benefits of these loans are that they offer quick access to fiat currency without having to sell your crypto assets. They also provide a way for people to get into the crypto market who don’t have enough money to invest in it. The main downside asa borrower is that they can have higher interest rates than a traditional loan, but the interest rates will depend on the company you go with.
Crypto loans can be used to buy a car or house, to start a business, or to invest in crypto assets. They allow people to borrow money without having to rely on traditional banks that may refuse them for reasons like bad credit score or not enough collateral.
Crypto Lending Platform
If you’re wondering how to get started lending Crypto, then consider a crypto lending platform. A crypto platform can help protect consumers from the complexity and risk of lending crypto. There are different platforms to use. I have a small amount invested in the AQRU platform. AQRU app allows you to invest in Crypto such as Bitcoin and Ethereum. They use their supported payment provider MoonPay (transactions fees will apply). You can earn interest of up to 12%, paid daily, which is tracked to the second. If you need to withdraw you can do so in just 24 hours, either in real money or in Crypto. There are no catches and no lock-ins.
AQRU generates returns by lending out their customers digital assets to institutional and retail borrowers. They also participate and support decentralised exchanges. They have a rigorous risk management process and insure deposits that they lend to decentralised exchanges. When lending money to retail investors and institutions, they ensure that it is 100%+ collateralised. This strategy means funds are easily accessible and allows them to pay out returns to their customers daily.
To find out the returns you could earn on your crypto assets you can use their compound interest calculator.
AQRU advises that returns generated by cryptocurrency deposits remain high because market participants are willing to pay high levels of interest to borrow assets they struggle to access via traditional needs. As the crypto market develops yields will decrease as capital becomes more accessible. However, AQRU state that they feel there will also be opportunities that emerge to generate yield to compensate.
I hope this helps explain how to lend crypto. Let me know in the comments about your cyrpto investments and if you’ve had any luck with DeFi platforms.
