A look at 20 Cryptocurrency Lending Websites from Decentralized to Centralized
Cryptocurrency lending and financing is one of the only things booming in this cryptocurrency bear market. Decentralized finance (or Defi) on Ethereum is quickly becoming another Ethereum killer app. Leading the way is MakerDAO and the decentralized DAI stablecoin. However, while Ethereum based decentralized finance is the leader, there are far more services ranging from less centralized to fully centralized that are building and growing during this bear market.
This article was written to highlight projects starting from the decentralized to centralized fiat based services.
Start Ethereum Based/Decentralized
The Maker Dao stable coin project is by far a leader in the space. At the time of writing this project has locked up 2% of all ETH into Collateralized Debt Positions or CDP’s backing around 88M decentralized USD based stablecoin DAI.
There are 2 coins powering the ecosystem the DAI stable coin and the MKR governance coin. The idea is to back each DAI with at least 150% ETH (or other coins soon to come) collateral. MKR, is the governance token that makes this happen. And as a governance token, it is also an incentive mechanism and the only way to pay interest on CDP’s. The system is a bit complex to explain in this short description, but the system has proven robust and survived a 90% drop in the underlying ETH asset unscathed.
Bloqboard is the very easy-to-use and user-friendly UI and UX that provides a list of loans for lenders to choose from and invest into. And for borrowers, it provides the functionality to create loan requests. Also included as a function of the Dharma protocol is that it transfers the collateral to the lender in case the borrower defaults. Bloqboard.com — Twitter — Telegram chat
Essentially Bloqboard just combines multiple protocols such as MakerDAO, Compound, and likely more in the future. And then it adds its own P2P loans.
Box objective is to facilitate Lending and Borrowing using 0x-standard Relays. They have already created a mainnet Dapp https://portal.bzx.network. The platform facilitates leveraged and short and long positions. There is a 10% fee on the interest for lenders, and there is also a decentralized insurance fund.
Compound, is an Ethereum based protocol facilitating borrowing and lending of ERC20 tokens. Interest on Compound is calculated in real time, the interest is calculated per block and each lender receives the same interest. Interest is paid per block, lenders can lend for any period of time and they will earn interest accordingly. Tokens can be withdrawn instantaneously. Interest is paid in the same asset as it is being lent. Interest is paid into the supply balance, which is then re-lent automatically.
There is a 0.025% origination fee for the borrower and the lenders have to pay
10 to 15% of the passive income interest earned, back to the compound developers. ETH needs to be wrapped in order to be lent out resulting in WETH.
See Compound stats
EthLend is a p2p lending platform without third party custody risks because it is DECENTRALIZED. Around 90 different ERC 20 tokens are used as collateral for loans. The whole process and loan defaults, penalties, transfers of the collateral are all managed by Smart contracts. ETHLend app can be accessed through MetaMask. You can save upto 50% on fees when you’re using the LEND token.
Loan Scanis a great tool on a website that monitors loans on the Ethereum blockchain. to learn more about new and upcoming loan platforms and the current interest rates. It is not a platform in itself, but it is a cool tool and great way to keep an eye on the decentralized lending space.
Lendroid is a platform that manages the complete lifecycle management of lending and borrowing of ERC 20 tokens. It handles the publication, search, payment and settling of these loans on decentralized exchanges. The use of these loans is to enable short and long positions. It would be wise to practice caution as decentralized exchanges are currently very low volume
Crypto Based More Centralized
BTCPOP is a P2P Bitcoin based lending platform launched in 2014, Following the purchase by new management in 2016, Btcpop has survived and grown into a successful platform when nearly all other participants in the industry have failed. Btcpop hosts a wide variety of cryptocurrency based services including but not limited to:
- P2P Cryptocurrency lending with collateral
- Altcoin Exchange
- Pooled Staking Service
- P2P share platform
- Savings Account
- Cloud Mining
- Altcoin Faucet
According to Btcpop’s blog the website is undergoing a major update to improve its exchange and enable even more features such as tradable shared masternodes, stablecoin loans, and a hashpower exchange. Btcpop.co is definitely a cryptocurrency platform to keep your eye on.
Celcius was launched as an ICO which raised $50 million. The CEL token is not currently being used on the platform but in the future it will provide discounts. Celcius business model is to be a middle between those who have cryptos to lend and those who need crypto. Those who need crypto include those who are looking for a personal loan to exchanges seeking liquidity. Borrowers get a certain interest rate and lenders are paid passive income in a lower interest rate, Celcius pockets the difference.
The system works from a mobile app, where after KYC, the coins deposited can be lent out. Interest is generated and calculated on a daily basis, then it is distributed weekly and paid in the respective currency of the deposit made on the app (BTC, ETH, etc.) When the coins are borrowed the borrower needs to provide cash collateral of equivalent value. . The maximum withdrawal is of 24k USD in 24 hours.
Coincheck is a platform for crypto loan investments with a maximum interest rate is 5%. The loans they provide are uncollateralized, unsegregated, and unregulated, so it carries risk.
Borrowing and lending on crytpocurrency exchanges can allow you to provide or lend some of the largest loans at the best rates in crypto.
CoinLend is an automated bot that can lend on 4 exchanges. Poloniex, Bitfinex, Liquid, and CobinHood if you decide to invest in crypto lending or if you already are doing so and most especially if you already are and already have accounts on the four exchanges listed above, you can use the platform for free! If you want more potential for passive income, you can upgrade your free account to a premium. Better potential is because of the diversified use of lending strategies.
Not a platform, but a cool tool non the less
Another bot Polobot is an automated bot that can generate a passive income on margin funding on both Poloniex and Bitfinex. Polobot manages funds on these platforms it does not hold funds itself, it is free to use but also has a premium function.
PoloBot rate history page has very detailed stats on the history of margin funding
Lendo is a cryptocurrency lending platform due to open in q1 2019. The lending process will be seamless as there will be no credit checks since all loans will be collateralized. The platform will be open globally for borrowers. Initially, Lendo will accept only Bitcoin as collateral and the interest payments will be in FIAT. The collateral value is taken as the moving average price in the last 30 days, loans up to 60% of the collateral value will be provided.
Only FCA regulated and licensed brokers can lend on Lendo. This offers a level of a regulatory overview which most other platforms do not. It will be institutions lending to borrowers rather than other peers. However, this also cuts outs most small time lenders seeking to diversify their passive income stream
14. LENDING BLOCK
Lending Block is an institutional oriented cryptocurrency lending exchange. It raised $10 million in April 2018. It currently supports BTC, ETH, LTC and BCH. Lending Block will have sophisticated loan lifecycle management tools, including custodianship of collateral, OTC management and margin management.
The interest rate and duration are agreed between borrower and lender, interest will be paid in LND. The minimum lending and borrowing is $50k. Collateral values will be monitored in order to have healthy LTV ratios. Both the borrowers and lenders have to pay fees to lending block.
Nexo was founded in 2007 as a tech company looking to disrupt online loans. They were successful in their pursuit and in 2016 took it a step further incorporating Bitcoin into their platform. Realizing this potential in 2017 Nexo introduced the world’s first instant crypto backed loan.
Nexo requires verification for the banking and credit card part of the platform so it has KYC. they have a set interest rate of “from 8%” a year which is fair in crypto terms but maybe a little high in the low interest fiat world. They have also launched the NEXO token which main purpose seems to be as a way to get 50% off your interest payment for future loans. The token brings some concern of regulation but they seem to have lots of experience and have the situation under control.
Coinloan is primarily a p2p crypto lending platform. Their key feature is that they are also an exchange platform for the the cryptocurrencies. Wherein you can convert your FIAT to crypto and vice versa,
For borrowers, the minimum loan amount is $50 and the maximum amount that you can loan is 70% of your total crypto assets. Lenders can either take the offer proposed by the borrowers or they can propose loan offers to borrowers so they can set their own rules.
BitBond is primarily a fiat based P2P lending platform but has a history in and still accepts Bitcoin. It is based in Germany and has a BaFin licence since October 2016. Bitbond is a crypto lending platform for business owners. Their focus is on online business owners whose track record can be easily verified. The lending limit is 25k.
BitBond bases their fees on the loan repayments rather than the loan sourcing, this aligns their incentives, meaning they have the interest to lend to those who will actually pay back. Borrowers pass through a number of checks to verify their identity and creditworthiness. Their USP is instant funding, available globally and 24-hour approval.
SALT is a US based centralized crypto lending platform. Becoming a lender is reserved for accredited investors only but there still is a possibility to become one.
Its main service is USD loans against cryptocurrency collateral. The service has taken a regulatory proactive approach and has been methodically adding its services to all 50 US states and additional countries. See also Salt 2018 year in Review.
Blockfi is a NY based platform build specifically for offering crypto backed fiat loans. Venture capital backed by some big names, Blockfi has already proven to be a competitive play in the space. The platform is headquartered out of NY so expect the highest amount of regulation and reporting in the US.
20. HODL FINANCE
Hodl Finance’s website says they have 46 types of cryptocurrencies now available. But currently users can only take out loans against BTC, ETH, and XRP. Users can earn interest lending out their stablecoins via Hodl Finance.
The cryptocurrency finance space is incredibly fun to watch adapt and grow. Judging from the pace of innovation and development it seems the industry will quickly grow into the billions of dollars and beyond as cryptocurrency adoption continues and becomes more mainstream. cryptoroi.com will keep you updated as this happens.