What exactly is crypto lending?
Crypto lending, which is one of the most recent developing trends in finance and blockchain, is a type of Decentralized Finance in which investors lend borrowers cryptocurrencies in exchange for interest payments. The majority of lending platforms accept cryptos and stable coins.
Can you do borrowing with cryptocurrency?
Cryptocurrency is not only about an investment, but do not forget about the borrowing aspect. If you are reading this, you are probably optimistic about the future of cryptocurrency. As a result, it’s critical to save your crypto for the long haul. Cryptocurrency lending allows you to borrow real money (such as USD, EUR, or CAD) when you need it, avoiding the need to sell your cryptocurrency in an emergency.
Know about the complete process of crypto lending
Step 1: The borrower goes to a portal and asks for a cryptocurrency loan (backing it up with his crypto)
Step 2: The borrower stakes his crypto collateral after the site accepts the loan request. The borrower will not get the stakes money until he has paid off his entire debt.
Step 3: Using the platform, investors (lenders) automatically fund the loan. This procedure is usually undetectable to investors, who will see no change in the amount of cryptocurrency in their accounts.
Step 4: Investors are regularly paid interest, usually weekly or monthly, and rarely at the end of the lending period.
Step 5: The borrower received his crypto collateral after repaying the loan.
Final thoughts
Over the previous several years, crypto lending has grown in popularity. You can loan out your digital assets to get high interest from whoever is borrowing from you, just like you can with traditional lending. Some various solutions and platforms allow you to give or receive a loan using your cryptocurrency, but it works a little differently than conventional loans.
