Crypto Loan: Here are seven of the best interest rates on the market

The cryptocurrency is evaluating traditional finance on its legacy of loans and loans with competitive interest rates (currently starting at 0.44% for Ethereum and 4.50% per year for bitcoin) and less complicated verification procedures. Holders of cryptocurrencies present their virtual assets as collateral to obtain loans paid in fiat or stablecoin. The option allows you to keep immediate financial needs separate from long-term crypto investments and to evade a taxable sale of your crypto funds.

Investors can also lend their digital assets and collect significantly higher passive income – up to 12% on their deposits – than is generally offered by conventional institutions. While bank customers may currently have negative interest rates on their money due to the Covid-19-induced global economic downturn, cryptocurrency lenders are putting their money at their service.

Risks in the growing market include the theoretical vulnerability of smart contracts to hackers and a lower level of regulation for exchanges, including decentralized ones, and the wallets that offer the service.

News.Bitcoin.com briefly profiled the platforms that offer the best virtual asset lending rates. The services are classified by BTC and ETH, according to data provided by Coinmarketcap. The Ethereum space is dominated by decentralized finance protocols (Defi), while bitcoin lending is dominated by centralized wallets and exchanges. All the services present also allow the loan function.

Dydx

Dydx offers the best loan rate for the ether at 0.44% per annum. The interest rates of the decentralized exchange fluctuate based on the supply and demand for loans and deposits of the particular crypto-asset. Dydx allows users to take advantage of positions up to 4x. Users can borrow directly from a wallet. The minimum initial account guarantee is 125% and must be kept above 115% to avoid account liquidation.

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Nuo offers a rate of 2.33%. Like Dydx, the decentralized platform allows users to trade cryptocurrency on margin as well as lend and borrow. Likewise, the rates vary according to supply and demand. Users can leverage trades up to 3 times and borrow up to 0.7 times the collateral amount.

Compound finance

Compound Finance is also a decentralized exchange. It currently offers a borrowing rate of 3.06%. Users can also deposit a crypto-asset and request a loan of other digital tokens. Rates vary based on supply and demand. The collateral factor for ETH is 75. For example, a user with assets worth $ 100 can borrow up to $ 75.

Celsius network

Topping the BTC list for best loan rates with 4.50%, Celsius is a wallet that allows clients to deposit and lend virtual currencies. The centralized service sets all interest rates for its users. Celsius incentivizes the use of its CEL token with better rates for deposits. Celsius started in 2018 with a minimum loan of $ 10,000 that has dropped a few times to the current low of $ 1,000.

Coinloan

Coinloan is tied with Celsius in first place with a 4.50% loan. Depositors can monitor interest in their cryptocurrency, stablecoin or fiat investments in real time and recover funds at any time upon request. To get 100,000 euros ($ 118,000) with a loan-to-value ratio of 60, a user must deposit 26 BTC.

Bitrue

Bitrue offers an interest rate of 5.85%. Centralized exchange sets the asset type, capacity and yield for each deposit product. It also offers crypto-asset loans, backed by user deposits.

Nexus

Nexo has a substantial minimum loan of $ 10, at interest rates of 5.9% per year. Like most wallets and exchanges in the industry, no credit checks are involved. The credit line limit is calculated based on the value of the assets. Nexo sets interest rates for its users and offers a variety of currencies including stablecoins, US dollars, British pounds, and euros.

What do you think about the prevailing interest rates for the cryptocurrency loan? Let us know in the comments section below.

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