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Best crypto lending platform 2022

If you are a newbie or if you have been hanging around the crypto world for a while, one of the most common terms you might have heard from a lot of experts and even your friends use/say is, 'crypto lending platforms.' 

So, if this is what you came for, stick around, and let's get you informed. This post explains crypto lending platforms for beginners and experts. How they work, the services they offer, some of the best crypto lending platforms, and much more.

What Is A Crypto Lending?

Crypto lending is an alternative form of investment. It lets people in a certain P2P network to lend their crypto assets or fiat currency to people in the same network who want to borrow it in exchange for a good return on their deposit. Also, neither the lender nor the borrower has to deal with a traditional centralized system like a bank.

So, how does this work?

Lending and borrowing are the core of all financial systems in the world. And the digital world has come up with new ways to make lending and borrowing easy, fast, and safe. When it comes to crypto lending, there are two ways to go about it:

You either lend/borrow your funds via a Defi lending protocol
Or you either lend/borrow funds via a Cefi lending platform.

Let's take a look at how each option works.

Understanding the Word, 'Defi'?

The word 'Defi' is a contraction of the term Decentralized Finance. Defi is blockchain technology and infrastructure that allows individuals on a network/platform to perform financial transactions without the need for a centralized institution. 

Defi platforms leverage smart contracts to allow participants to automate p2p lending and borrowing without any centralized system or having to provide any personal information.

Smart contracts are written codes, that spell out sets of rules/conditions that govern a financial transaction between two parties, and once those rules or conditions are met, the transaction is automatically executed.

For example, assuming someone wants to buy your home, and your home cost 3 Ethers (the cryptocurrency of the Ethereum blockchain), you can write a smart contract that states that if someone pays you 3 Ethers, a digital copy of your house documents should be released.

So, basically, you upload the documents of your home unto the blockchain, and when someone pays the 3 ethers, then the smart contract will automatically release the documents and send you the coins. Basically, smart contracts are more like the escrow of the blockchain; however, it is P2P.

Lending Via Defi Protocols

With Defi lending, the borrower and the lender can lend or borrow money via any open blockchain technology-- meaning, the blockchain technology is accessible to everyone-- that has smart contract capabilities. 

However, not everyone can write a smart contract, and even if you can, it can be laborious and it wouldn't make sense for you to write a smart contract for say, a $500 loan. And even if you can write a smart contract for such a loan, there is no guarantee that you will get an interested borrower.

Therefore to make this easy, there are quite a number of Defi protocols, such as Aave, dYdX, and Compound. You can lend or borrow money without writing smart contract code or finding a lender or borrower.

It is crucial to understand that these Defi protocols or Defi lending platforms aren't middlemen; however, these protocols are built by their developers to leverage smart contracts and automate transactions without any participants having to reveal their identity to anyone.

So, how does Defi Lending work?

Even though Defi lending is built on Ethereum, it can support multiple crypto assets. It means you can lend Eth, Bitcoin, USDT, Aave, etc. We recommend checking each platform's support for the crypto asset(s) you want to lend.

Let's say you have cash or excess cryptocurrency in your wallet that you don't use but want to earn passive income or interest on it. 

If you have a cryptocurrency or token that's compatible with the Defi protocol, you're good to go. If not, you'll need to buy one or convert your other crypto assets to one of the protocol's supported crypto assets.

Once, you have the token, you want to ensure that it is in your wallet. Then you simply visit the website of the Defi protocol you want to lend the tokens out to and lend it out, by depositing/transferring the asset you want to lend out to a specific wallet. 

Once, you transfer the money to the specified wallet and your transaction is confirmed, the transferred assets get locked up in a liquidity pool. The purpose of this liquidity pool is to facilitate the processes of the platform.

The protocol gives you an interest-bearing token in exchange for the digital assets you lent. This interest-bearing token reflects the value of the asset you lent and the interest you've earned. How do DeFi platforms pay back your interest? Crypto collateral is how Defi lending protocols return lent cryptos with interest. It's simple:

Someone needs cash for an emergency but doesn't want to sell their cryptocurrency because they believe it will rise. Defi protocol will reimburse anyone who borrows from the liquidity pool. The borrower must put up tokens or a Defi-compatible crypto asset as collateral. Once collateral is provided, funds are disbursed via smart contract.

These loans are over-collateralized, though. You'll pay more in crypto collateral than the loan plus interest. This guarantees timely loan payments and covers lender losses if you default. On-time loan and interest payments will return your crypto assets. If you default or the crypto assets you used as collateral fall in value, your digital assets may be at risk.

All these steps are automated by the smart contract used to build the Defi protocol or lending platforms. Prewritten smart contracts on Defi protocols or lending platforms reduce your workload, but you still need intermediate to advanced cryptocurrency knowledge to use them.

Lending Via Cefi Platforms

If you aren't tech-savvy and you still want to earn some passive income with your cryptocurrencies, then you can easily sign up on a centralized exchange to help streamline the process. When cryptos were new to everyone, the only way you could purchase cryptocurrency was through a centralized platform.

How Cefi Lending Platforms Work?

To lend via Cefi, you will have to sign up with a central exchange that offers lending/borrowing services, such as BlockFi. This central exchange will handle your accounts and crypto purchases. You must provide personal information to create an account, unlike Defi lending.

These exchanges will permit you to purchase cryptos or tokens that are strictly available on their platform, and you get to store your coins or tokens on their platform; however, you have the option of moving them to your personal wallet.

Once you purchase the coins on their platform, you will have to sign-up for an interest-earning account or interest accounts, such as a BlockFi interest account, to enable you to lend your cryptos or tokens for some interest.

Similarly, you can sign-up for a crypto loan by borrowing funds against the cryptos you have in your account. And just like with lending, you will need interest accounts before you can borrow. Also, similar to DeFi, a crypto loan via a centralized exchange is also over-collateralizedMost Cefi platforms will charge you a fee for every transaction you make.

So, what determines the interest rate of lent assets?

There are three factors that determine the APYs or crypto lending interest rates of various platforms (both DeFi and CeFi platforms); these include:

  • The platform/protocol you choose to invest in. Various platforms have different APY rates to attract various crypto enthusiasts to the various platforms.

  • The type of crypto asset you lend out. For example, the interest rate you earn for lending bitcoin will be different than the interest rate you earn for lending Ethereum.

  • The amount/number of crypto assets you lend out. If you lend out more assets, you have the chance of enjoying higher interest rates.

However, on average most platforms, offer competitive interest rates that are way higher, sometimes, 10X that of traditional financial institutions. For example, most savings account in America offer an interest rate of 0.07% APY; however, some crypto lending platforms offer interest rates as low as 4.5%, which is 64 times what traditional savings account in banks offer.

Whether you choose Defi or Cefi, one thing you will need to note is that if you are to borrow funds, you will always have to over-collateralize. This means you will always have to lock up more cryptocurrency as collateral than the amount of cash you want to borrow.

That being said, it is important to note that these centralized exchanges still leverage blockchain technology; therefore, each transaction performed on any centralized exchange is recorded on the blockchain and accessible to the public.

Which Option Do We Recommend?

Defi protocols and Cefi lending platforms are both great ways to earn interest on your cryptos with great ROIs or APYs; however, we do recommend Cefi investing for beginners since it they make the lending process easier and intuitive.

Also, most Cefi lending platforms offer much higher annual percentage yields than Defi platforms. Therefore, the remaining sections of this article will focus mostly on Cefi platforms.

But besides that, these are a few reasons why we recommend Cefi platforms:

They offer higher APYs than decentralized platforms and It is done in a regulated environment.
You have a customer service representative to walk you through the process and answer your questions whenever you email or call them.
The first reason why we recommend Cefi lending platforms is that they protect your assets. They either store majority of the crypto assets in cold storage or they have insurance policies in place to protect your cryptocurrency assets in case of any unfortunate incident.
They are more secure. As with DeFi, once you lose the key to your wallet, your assets are gone forever. However, with Cefi via centralized exchanges, there are various ways through which you can confirm your identity to get access to your account, in case you forget your password.
How To Choose A Crypto Lending Platform

Before we dive into the best crypto lending platforms, we would like to walk you through certain key factors to look out for when choosing a crypto lending platform. This will help you understand our criteria for choosing our top 5 lending platforms, as well as, equip you will some knowledge for your personal research.

There are three things we look out for when lending out funds to a platform. These include:

Risk Assessment Of The Platform

The first due diligence you want to perform is to research the company to find out if there are any risks associated with them. With this, you want to look at three things:

  • Read online reviews from reputable review sites.

  • Find out if the Central exchange is backed by any major brand in your country or a first-world country. Also, ensure to confirm these firms are legit.

  • Ensure that they are registered with the Securities and Exchange Commission or any relevant securities company in your country.

  • Also, check their records to ensure they pay out their customers on time and the right amount.

Doing this will ensure that you choose the safest crypto lending platform.

Minimum Deposit Limit

The second thing you want to do is to compare the minimum deposit limit of the platforms you want to join that have passed the risk assessment check. Ensure that the amount of crypto you have or wish to buy is above the minimum loan amount; else, you would only be able to purchase the crypto; however, you won't be able to loan it out.

Interest Rates

Once, you check the minimum deposit platforms, you should have a couple of companies at hand, but then you might be confused as to which one to go for. 

Well, one metric you can use to justify the company to go for is to use the earning interest rates relevant to the crypto asset(s) you plan on lending. As stated earlier, the interest rate will vary based on the platform.

Therefore, we recommend you pick the platform with the best earning interest rate for the cryptocurrency you want to lend.

Fees Charged

Using centralized exchanges isn't free, they will charge you a fee for each transaction. Usually, the fees most exchanges charge are usually withdrawal fees. 

Therefore, you want to ensure the withdrawal fees or any other fees of your preferred platforms are quite low.

Customer Support

You must ensure that the company has various customer support options and also, ensure that their team is responsive.

What Are The Best 5 Crypto Lending Platforms?

To save you the stress, we have researched and gathered 5 of the best crypto lending platforms out there. We will review each site using the four metrics mentioned above.

1.    BlockFi

The Safest Crypto Lending Plat

Founded in 2017, BlockFi is a U.S based company that offers individuals the ability to lend out cryptos or borrow funds just by signing up for a BlockFi interest account. With over 225,000 users and an evaluation of $3 billion, BlockFi has slowly gained the trust of many investors and has risen to be one of the giants in the crypto lending space.

Below is our analysis of BlockFi:

Risk Assessment

According to Investopedia, BlockFi has an average rating of 4.0 out of 5 stars after reading the review of 200 users. Also, NerdWallet gave the platform a 4.5-star rating. This means, the company has been tried and tested by many users and has been proven to be safe.

Also, BlockFi is regulated by the New York State Department of Financial Services via its custodian, Gemini. It is backed by industry giants such as PJC, AVON Ventures, Coinbase Ventures, and many more.

Minimum deposit Limit

BlockFi offers a 0$ minimum deposit limit. Also, you can only withdraw one free stable coin and one free crypto coin each month.

Interest rates/ROIs offered by the platform

The interest rates on BlockFi are quite lucrative; they range anywhere from 0.1% to 7% depending on the crypto and tier.

Fees Charged

You are charged a fee of 0.00075 BTC per withdrawal.

Customer Service

BlockFi provides a wide variety of customer support options to help you get all your queries answered in no time. They offer a phone support system, a ticket system, and a chatbot.

2.   Aqru

Best Overall

One of the newest exchanges gradually gaining the trust of people and covering grounds is Aqru. Founded in 2019, Aqru is a London-based business with over 10,000 users plus managing assets worth over $50 million. It is one of the best crypto lending platform that you should be thinking of.

Risk Assessment of the platform

Aqru has some solid online reviews from reputable sites such as 4 out of 5 star on Trustpilot from 131 users.

Minimum deposit Limit

There is no minimum deposit limit.

Interest rates/ROIs offered by the platform

Aqru has some of the highest interest rates, ranging from 7% to 12%. All you need to do is buy either Bitcoin, USDC, Tether, Ethereum or Dai, and you should be able to earn interesting your purcahse.

Fees Charged

Aqru charges no fees on withdrawals and deposits.

Customer Service

They have a live chat feature and an email feature.

3.    Binance

Best Crypto Lending Platform For International Lenders

Binance is the world's largest crypto exchange with over 28.5 million users across the globe, it is an ideal platform for most international lenders who do not know where to start or a company to trust.

However, if you are in the UK, it might be challenging to use Binance Earn since it has stricter rules due to the tight regulations by the UK's regulators.

Risk Assessment

Binance has a rating of 4.5 out of 5 stars on NerdWallet, with an Investopedi rating of 4.4 stars.

They have good track record of paying out customers on time; hence, you have nothing to worry about.

Minimum deposit Limit

Binance earn uses an autosubcription feature which automatically lets you gain interest on coins you have in your Binance interest account.

Interest rates/ROIs offered by the platform

They have a high interest rate, promising up to 35% APY on certain coins. However, the coins they accept are limited. 

Some popular coins they are compatible with include Dot, ADA,SOL,Eth, BUSD, and BNB. However, they have a wide plathera of coins.

Fees Charged

Even though some fees are charged during your withdrawal, Binance doesn't let the public know about its withdrawal fees. 

However, what we can say is that, the withdrawal fees you pay depends on the coin you want to withdraw.

Customer Service

They offer a 24/7 live chat support.

4.   Kucoin

Most Intuitive App

Another company on the verge of gaining worldwide popularity in the crypto lending space is Kucoin. Founded in 2017, this crypto lending platform has its headquarters situated in Sychelles; however it operates in Singapore.

It is actually the second most used exchange with over 10 million users in 200 countries around the globe.

Risk Assessment of the platform

Kucoin has a 4.4 star rating from Investopedia and they have a reliable insurance policy, which can refund all hacked or lost money on the platform.

Minimum deposit Limit

The minimum deposit amount depends on the coin, however, the minimum deposit is about 10 USDT, equivalent to about $10.

Interest rates/ROIs offered by the platform

The company claims its APY changes with the market; however, you can enjoy interest rates of up to 30% APY.

Fees Charged

They charge anywhere from 0.0125% to 0.1% on earnings.

Customer Service

They have an email and live chat support. However, most users complain about the platform taking time to reply their users via email.

5.   Nexo

Instant loans using your crypto as collateral

Nexo is the ultimate crypto lending platform that offers instant loans using your cryptocurrency as collateral. With Nexo, you can get a loan in 45 fiat currencies and stablecoins, including USD, EUR, GBP, AUD, and more.

What's more, you can receive your loan in just 5 minutes! 

Nexo is an excellent choice for those looking for a fast and easy way to get a loan using their cryptocurrency. Plus, with interest rates starting at just 5%, it's one of the most competitive lending platforms out there.

With Nexo, you can get instant access to cash without having to sell your cryptocurrencies, meaning you can still benefit from any future price appreciation. 

Risk Assessment

In terms of risk, Nexo is considered a low-risk platform as it offers Instant Crypto Credit Lines™, which are backed by your crypto assets.

Nexo has received positive online reviews from legitimate sources, including 4.5 out of 5 stars from 9,307 users on Trustpilot.

Minimum deposit Limit

No minimum deposit is required to open a Nexo account. However, you will need at least $100 worth of collateral to qualify for a loan. 

Interest rates/ROIs offered by the platform

Nexo charges interest on loans starting at 5%. They offer up to 16% APR on their supported coins.

Fees Charged

No deposit or withdrawal fees. However, a small interest fee is charged on loans, starting at 5%.

Plus, there's a 1% loan origination fee.

Customer Service

Available 24/7 to help with any questions or issues you may have.

You can contact the team via live chat or email.


Is Crypto Lending Risky?

The risk encountered with crypto lending will depend whether you are investing via a Defi protocol or a Cefi protocol. With Defi protocols, the risks can be quite high. However, in general, the risk associated with investing via both mediums is the crypto market volatility. 

For example, assuming you lend out 3 ethers to a platform say about, about $6000 for in 2 months. Well, if during the end of the 2 month period, the price of ethereum together with the crypto market drops by 30%, then if you get paid back your 3 ethers, you will have $4200 plus your interest.

What Services Does Crypto Lending Platforms Offer?

Lending isn't the only opportunity you can exploit on crypto lending platforms. Most platforms offer other services including:

  • Staking

  • Liquidity mining

  • Yield farming

All these are passive ways to generate some income with your crypto assets.

What Happens If I Lose My Assets?

Depending on the situation that you lost your asset, you may be

  • If you lose your assets via a Defi platform, then they are lost forever. This is why we recommend you have some in-depth knowledge of crypto before venturing into this space.

  • If you lose your assets on a Cefi platform--given that the platform is legit--and the cause of the loss is due to the negligence of the platform, the platform in questions will refund your assets.

  • If you lost your assets due to your personal negligence, then you assets will not be refunded by the platform.

Brief overview

Both Defi protocols and Cefi lending platforms offer high ROIs or APYs, but we recommend Cefi for beginners because it simplifies the lending process. Cefi platforms offer higher annual yields than Defi platforms. This article was focused on Cefi platforms.

In addition to listing the best crypto lending platforms, we also discussed some important factors such as platform risk assessment, minimum deposit limit, interest rates, fee charges, and customer service. This will assist you in fully grasping the criteria for selecting the best lending platform for your cryptocurrency.