It is no more news that the crypto lending sector has emerged as one of the top-performing industries in the crypto world. This success stems from its reliance on blockchain and crypto technology to offer banking services to the billions of people who are denied such opportunities.
Apart from that, crypto lending platforms are incorporating features and business models that make them more attractive than their traditional counterparts. For one, they offer competitive rates, unburden users of complex and expensive loan origination processes, and enable transparency via blockchain implementations.
However, as it is with every industry, there are a handful of crypto lending initiatives with innovative business models that have set them up for unprecedented growth.
To show you different approaches to the crypto lending and how these frameworks have helped top crypto lending solutions to build formidable products, I decided to highlight 10 platforms from the top echelon of the burgeoning coin-based lending market. Needless to say, the platforms listed below should popup on your radar whenever you are looking to adopt a crypto lending facility.
Blockfi is an American-based crypto lending solution known for its successful fundraising campaigns in 2019 involving some of the biggest names in the investment space. This platform has implemented various security measures, including its partnership with Gemini custodial service, which has the appropriate license to run a legal custodian infrastructure in New York.
As for its rates, Blockfi sets a 4.5% loan rate with a 25% loan-to-value ratio. Lenders, on the other hand, have access to 8.6% interest rates on deposited funds. It is worth noting that Blockfi recently removed minimum deposits form its platform’s policy, which means that there no restrictions as regards the minimum amount users can deposit to start earning interests.
Nexo operates a lending system very much similar to that of Celsius Network, albeit with a less rigid customer framework. In other words, Nexo offers loans to both institutions and individuals, and it has processed $700 million in loans for over 200,000 clients. One of the highlights of the Nexo lending network is the decision to partner with Chainalysis to comply with strict KYC and AML requirements.
Besides, Nexo has partnered with BitGo to enable premium-grade custodian services for its users. For its loan rates, Nexo sets 11.9% as its official rates and 5.9% for Nexo token holders. Lenders are eligible to 8% interest rates on all deposits.
Squilla is one of the impressive additions to the crypto lending market poised to introduce innovative lending models for users willing to lend or borrow cryptocurrency. For one, the platform offers a flexible p2p network under-collateralized loans of over 65% LTV in about 2Q 2020. Needless to say, this feature widens the scope of Squilla and makes it more appealing to a demographic with little or no means to access funds.
To access funds, a borrower only needs to make a request, and the platform will automatically match them with existing lending offers on the Squilla’s marketplace. Furthermore, lenders can distribute their capital to two or more borrowers to diversify risks and repayments. Besides, Squilla facilitates multi-sig cold wallet infrastructure, in addition to military-grade encryption, to ensure that its network is unsusceptible to attack. In terms of fees, there are no extra costs linked to the withdrawal and deposit of assets. Fixed Interest Rate helps borrowers to make the same payments over the entire term (no matter what market interest rates do), and with no early repayment fees.
Celsius Network has been one of the shining beacons in the crypto lending space for quite a while now. Reason being that it operates a business model, which offers crypto holders an opportunity to lend their cryptocurrencies to institutions. Its appeal as a source of funds for the corporate world has seen it onboard over 100 institutions into its crypto lending ecosystem. Likewise, the platform operates a zero transaction fees lending network, as it does not require lenders to pay early termination fees or withdrawal fees.r
Furthermore, Celsius Network prides itself on being one of the platforms with the lowest rates in the lending industry. The platform offers as low as 8.95% on loans and 4.95% for clients making repayments with the CEL token. On the other hand, Celsius Network provides 10% interest rates on digitals assets made available for borrowers. Having incorporated all these mouth-watering features, Celsius Network has, therefore, recorded unprecedented growth, as it has processed over $4 billion worth of loans since it launched its services.
Bankera is also one of the top-performing platforms operating within the crypto lending scene. This solution is affiliated with Spectrocoin. As such, the people running it are quite experienced with the crypto landscape, especially the security aspect of running a crypto firm. As a result, Bankera boasts multiple layers of security systems ideal for institutions holding a large amount of crypto on behalf of their users.
Moreover, Bankera offers competitive loan rates, which could go as low as 6.95% for borrowers with a less risky LTV ratio. Regardless, Bankera processes loan requests with LTV as high as 75% – one of the highest in the nascent crypto lending market.
CoinLoan, an Estonia-based p2p crypto lending platform, has grown in stature as a competent and efficient solution for lenders and borrowers alike. It provides long-term loans for up to 3 years, which you will agree is a unique feat. Also, users can borrow as low as $100, a testament to CoinLoan’s flexible policy.
However, the platform charges fees on all fiat withdrawals, while native token holders are eligible for 50% discounts. Borrowers can access funds on loans with LTV up to 70%.
Salt Lending is one of the first set of lending platforms designed to cater to crypto practitioners. The main aim of this platform is to create a system that will encourage crypto participants to hodl crypto. Hence, the solution offers services to lenders and borrowers. The latter can access loans with LTVs ranging between 30% to 70% and a repayment schedule that runs for 12 months.
Nonetheless, the minimum loan amount is pegged at $5,000, and borrowing does not entail prepayment or origination fees. That said, the expected interest rates on assets lent to borrowers is 5.95%.
Dharma implements a peer-to-peer lending platform where lenders have to create lending offers. Once a lending offer is executed, the platform automatically looks for borrowers who find the offer attractive enough to take it up. In 2019 alone, Dharma facilitated over $400 million worth of loans on its network, with 80% processed with the DAI stablecoin.
The interest rate of Dharma is 8.4% for lenders utilizing the DAI stablecoin and 4.1% for those depositing USDT. Another noteworthy feature is Dharma’s smart wallet.
Nuo Network is deeply entrenched in the functionality of blockchain, as it enables a p2p network that does not entail borrowers to deposit their digital assets as collateral to a third-party platform. Unlike a majority of crypto lending platforms, Nuo supports a broad array of cryptocurrencies for borrowing and lending. Note that there are different interest rates for each cryptocurrency. For instance, lending SNX comes with an APR of 8.4% and 24.9% for those borrowing the digital asset.
Owing to Nuo’s p2p-based framework, it locks deposits in smart contracts, thereby relieving the platform of custodial responsibilities.
Lendabit, a p2p lending service, primarily focuses on giving out USDT loans to users who are willing to deposit crypto as collateral. At the moment, Lendabit only supports Bitcoin and Ethereum. Likewise, the maximum tenure for the loan accessible on Lendabit is 1 year. Lendabit provides annual interest rates of 12% to lenders.
To protect its network from hacks, the solution has implemented a distributed access management system. Like Nexo, Lendabit has partnered with BItGo to enable insurance coverage for the assets deposited into its wallets.
Disclaimer: I do not have any vested interest in any of the mentioned projects. The views and opinions expressed are those of the author and is not investment advice. Do your research.