3 Best Crypto Lending Platforms: Alternatives to Celsius and Voyager by@ishantech

3 Best Crypto Lending Platforms: Alternatives to Celsius and Voyager

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Nexo provides crypto lending and earn product which allows users to earn Annual Percentage Yield (APY) by lending their crypto assets to the crypto lending platform. Nexo is a pioneer in allowing users to borrow against their NFTs, making it the most asset-rich platform available. Users may borrow for as low as 0% if they become Gold or Platinum members and maintain their loan-to-value ratio under 20%. Nexo has also signed a term sheet with Vauld for potential acquisition.
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IshanOnTech

Covering the latest events, insights and views in the Web3 ecosystem.

A Review of Earn, Lending and Savings Products

One of the most well-known ways to increase the value of your cryptocurrency holdings and investment portfolio in recent years is through crypto lending and earn products. Due to the fact that crypto investors are increasingly focused on finding the most polished and compliant platform for crypto lending, it is vital that investors fully grasp how such crypto lending platforms work and the risks involved.

Vested Interest DisclosureThe author is an independent contributor publishing via our brand-as-author program. Be it through direct compensation, media partnerships, or networking, the author has a vested interest in the company/ies mentioned in this story. HackerNoon has reviewed the story for quality, but the claims hereon belong to the author. #DYOR

Understanding How Crypto Lending Works 101

In order to make an informed decision about which crypto loan platform is best for you, you must first have a thorough grasp of how they operate and their technological and lending infrastructure. The easiest approach to understanding how a crypto platform works is to concentrate on the different roles played by its various components as part of its business model, such as:


  • Lenders are a crucial part of the crypto loan process as they provide loans to the company to generate yield on assets. In order to get a passive income from their crypto assets, they store them for an extended period of time with a crypto lending platform.


  • Instead of selling their crypto assets, borrowers must use them as collateral to get loans. To reclaim their collateral, borrowers must also pay interest on the loans they take out depending upon the models and bonuses (using a native token) put forth by each crypto lending platform.


The crypto lending platform governs the loan and borrowing procedure, it is critical for a user to read the terms of service to understand their rights and any material risks that they should be aware of. The platform may be centralised or decentralised. Depending on the kind of platform, matching orders, liquidity pools, or codes are used to govern the lending process. The following is a comprehensive selection of three cryptocurrency lending platforms, in no particular order.

Best 3 Crypto Lending Platforms

1. Nexo

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It's no secret that Nexo is one of the most popular cryptocurrency lending and borrowing services in the world, and it's especially popular in Europe. Nexo, together with BlockFi and Celsius, is regarded as being one of the "big 3" lending platforms and has a strong reputation in the cryptocurrency and FinTech industries. With the fall of Celsius and the bailout of BlockFi. As per media reports, Nexo has also signed a term sheet with Vauld for potential acquisition.


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Nexo provides a crypto lending and earn product which allows users to earn Annual Percentage Yield (APY) by lending their crypto assets to the crypto lending platform. The crypto lending platform in return lends the assets to different borrowers to earn additional yield. On Nexo, the APY that customers receive is dependent on their degree of loyalty and the asset that they choose to hold their money in such as whether the users hold any native Nexo tokens. A user's loyalty level is determined by how much of their portfolio is invested in Nexo, rather than how much money they have invested. The greater the customer's loyalty level, the more APY rates they can earn in the Earn section and the lower interest rates are applicable to such borrowers.


Further with Nexo, users may borrow for as low as 0% if they become Gold or Platinum members and maintain their loan-to-value ratio under 20%. On the Nexo platform, no credit checks or origination fees are required for users to borrow money. This is great for users who are holding Nexo tokens as it provides them with a competitive edge against other users using the Nexo services.


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In contrast to Voyager and BlockFi, Nexo does not provide typical crypto loans, but instead a crypto line of credit, which provides for more versatility in the borrowing process. Furthermore, Nexo is a pioneer in allowing users to borrow against their NFTs, making it the most asset-rich platform available. The owners of Bored Apes NFTs and CryptoPunk NFTs tokens may now borrow up to 20% of their valuable NFTs' worth - this is a great option for NFT holders. However, NFT users must conduct market due diligence before putting their NFTs as collateral due to market volatility and the experimental nature of such products.


Customers may also get an additional 0.5 percent cash back on bitcoin purchases made via the site, with the amount varying according to the loyalty tier. Customers have to go through KYC and identification verification in order to buy crypto, although this will just take a few minutes. The lowest card transaction is $50, and the highest is $5,000, with a monthly ceiling of $10,000. Card transactions are immediate.

Nexo Security Infrastructure

Anybody that has been in the crypto world for any length of time recognises the significance of security, given the number of exchange hacks and tales of consumers losing their money that we hear. Nexo's security reputation and history are unblemished and unfortunately, there aren't many platforms that can say that.


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In order to safeguard money and offer $375 million in insurance, Nexo adheres to industry best practices and has worked with BitGo, Ledger Vault, Bakkt, and others. Third-party penetration testing is also carried out on Nexo's smart contracts to guarantee that there are no security holes.


BitGo's SOC 2 Type 2-certified custodianship programme offers Nexo cold storage solutions and bank-grade class III vaults. Ledger Vault offers a cloud-based digital asset custody infrastructure and ensures digital assets up to $150 million. Bakkt offers Nexo cold storage solutions for Bitcoin and Ethereum that are air-gapped. Security solutions, certifications, and partners used by Nexo are shown in the image above.


Secured networks with restricted access to customer information are in place. ISO/IEC 27001-certified information security management system Nexo employs to protect its customers' private data.

2. Cake DeFi

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The Cake DeFi’s current lineup includes Lending, Liquidity Mining and Borrowing products. Cake DeFi's loan rates are comparable to those of its DeFi competitors. In the event that the price of the native currency rises while the loan is outstanding, the advertised "guaranteed" APY increases accordingly. Cake DeFi has paid more than 73 million USD in rewards to its customers to date which indicates its capacity to allocate assets properly and provide users with a steady APY.


Users deposit digital assets such as BTC, ETH, USDC, or USDT which are then locked in options contracts for a period of four weeks. The batch has a 28-day duration, beginning and ending on the Friday of each week. It's possible for customers to carry over into the following four-week term, remove their full principle and return to Cake Wallet, or take the profits only after the four-week period.


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Users can lend money with the assumption that it shall be repaid in full, with interest included. Users have the option of lending Bitcoin, Ether, USD Coin, or Tether (USDT). For the services Cake DeFi offers, Cake DeFi merely serves as a middleman or agent. To put it another way, Cake DeFi gives customers a "safe path" or a way to access decentralised financial services.


Similar to a "black box," which gives minimal transparency and control to organisations other than itself, other CeFi systems, such as Celsius, are in sharp contrast. As a result, customers would be left in the dark about important issues like where their earnings are coming from and whether or not their money are being mixed with those of the company's operations. Cake DeFi’s belief is that in light of the difficulties that crypto investors are now facing, the industry as a whole should do more to ensure and safeguard its customers' funds which makes it one of the best crypto lending alternatives to Celsius and Voyager.

3. Crypto.com

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The Crypto.com Lending Platform offers a broad array of products with an easy-to-understand user interface. Through Crypto.com Lending, customers earn interest on their crypto investments, take out crypto-collateralized loans, receive crypto payments and trade crypto. Additionally, Crypto.com is well-known for its CRO token-based cards. All financial and risk-prevention requirements are adhered to by Crypto.com, which is a fully regulated crypto corporation. It means you won't be able to access its services, including the App and Exchange, anonymously.


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There are a number of countries where Crypto.com is now accessible. These include several in North and South America, Europe (including the UK), Australia (including New Zealand), Asia (including Singapore), and Africa (including Nigeria).


You will be required to provide identification in order to complete the registration process. In order to use the platform, users must give the following:


  • Authenticated full name
  • Selfie with a government-issued ID to prove that you are still alive.
  • Obtaining a Crypto.com Visa card necessitates submitting a current (within the last three months) utility bill as proof of residency.
  • Get your account confirmed. It may take up to 3 business days to verify.


On the service side, Crypto.com stores all customer money in secure cold storage facilities. An institutional-grade custody solution called Ledger Vault is used in conjunction with hardware security modules (HSM) and multi-signature keys to provide a high level of security.

In addition, Crypto.com cold storage has a USD 500 million insurance coverage, which covers direct and indirect coverage through custodians, physical damage and third-party theft.

Crypto.com Cold Storage and Security

Crypto.com also employs HSM and multi-signature keys to safeguard its hot wallets. For day-to-day client withdrawal requests, the company's hot wallets store a small portion of its overall assets, which are enough to cover the company's daily withdrawal needs.


Customers' deposits in fiat currency are protected by local rules since they are stored in highly regulated custodian bank accounts all around the world. For example, the Federal Deposit Insurance Corporation (FDIC) insures USD accounts held by U.S. clients up to a maximum of $250,000 USD. However, Crypto.com allows you to keep control of your fiat cash, ensuring that neither the company nor any of its creditors may ever claim them.


Using Crypto.com's two-factor authentication (2FA) and a combination of the passphrase, password, biometric (fingerprint & face ID), email and phone verification, you can keep your accounts safe from intruders at all times. Furthermore, the DeFi wallet allows you to maintain your own private keys, which means that you don't have to depend on the platform's security.


Crypto.com is a safe and regulated crypto platform that Crypto.com provides on its platform with various security certifications and examinations by renowned security auditors. Buying, exchanging, and spending cryptocurrency is a breeze thanks to Crypto.com's beginner-friendly trading interface. Its other crypto services, like the Crypto.com Exchange, DeFi Swap and Wallet, Crypto Earn, and Pay, make it a fantastic one-stop shop for all things crypto.

Final Thoughts on Nexo, CakeDeFi and Crypto.com Lending Product

Nexo, CakeDeFi and Crypto.com have swiftly risen to the position of one of the world's most significant crypto loan platforms. It's impossible for a platform to achieve this level of success without a strong product, platform, and people behind it. As cryptocurrency use continues to rise, lending services are becoming more popular. Users may maximize their financial assets without giving up ownership of them by using these services. Additionally, the APYs, which are far greater than those offered by regular banks, are a major selling point, as are the perks of the crypto card.


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