Crypto lending platforms may charge you a fee for taking advantage of their services
Cryptocurrencies gained widespread acceptance among investors as returns from investments in equities eroded, mainly due to the disruption caused by the COVID-19 pandemic. Investors, both individual and hobbyist, flocked to the industry, which had promised decent returns even in the midst of an economic downturn that troubled many. While crypto proponents say it offers a great opportunity to grow money rapidly, critics cite its extreme volatility. Even though the debate continues, the industry has grown manifold in the past two years. And it’s still innovating and adding new features. One of them is crypto lending.
What is crypto lending?
Crypto lending is a very new segment. It allows merchants to receive cash using their crypto holdings as security, without having to sell their coins. Individuals can secure a loan against their crypto assets, anticipating an increase in the value of the asset during the term of the loan. The purpose of this type of investment is to allow people holding crypto assets to generate some dividends by lending part of their assets. Lending is usually available through crypto lending platforms.
What is a Crypto Lending Platform?
It is an online platform that allows you to lend your cryptocurrency in exchange for interest. These platforms are used by two parties. One of them acts as the lender and the other as the borrower. Borrowers require physical (or legal) money from lenders by depositing an equivalent amount of cryptocurrency with them as collateral.
The rate of interest depends on the coin. Crypto lending platforms may charge you a fee for availing their services.
Which crypto lending platforms are working in India?
1) BlockFi
Your bitcoin can earn up to 7.5 percent annual percentage yield (APY) with BlockFi, which calculates interest on a daily basis and pays monthly. BlockFi allows a borrower to take a loan while holding their crypto assets.
2) crypto.com
Another such platform is Crypto.com. It provides borrowers an option to pay off the loan in full or in part at any time during the fixed loan tenure of 12 months.
3) Zebpay
In May this year, ZebPay announced that it was adding crypto lending feature to its app. Initially, it is only providing loan facility against a limited number of crypto coins such as Bitcoin, Ethereum and Ether.
4) CoinDCX
CoinDCX, one of the largest crypto trading platforms in India, also provides this facility to its users. ConDCX calculates its interest rate dynamically, based on market demand and supply for the cryptocurrency to be lent.
5) Holdnot
A financial services platform, it allows private investors to earn interest on their cryptocurrencies by lending them to institutions. Its users can earn interest rates by depositing their crypto assets into the Hodlnot interest account.
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