Lending platforms to receive compound interest

You know that if so many people are increasingly interested in cryptocurrencies, it is mainly (and not only!) to be able to earn money.

One of the most used methods is crypto lending. (You can read our article to better understand the advantages of lending in cryptocurrencies).

There are many platforms that allow you to generate interest on your cryptocurrencies. The process is very simple and it only takes one click to deposit your cryptos. Then, every week or every month, depending on the site, you receive your interests.

You should also know that investing involves risks and that you are also exposed to risk on this type of platform.

1/ Youhodler: The reference site for compound interest

We have been using Youhodler since its beginnings and it is a site that has allowed us to make huge profits. We were actually able to benefit from the rise in cryptocurrencies as well as the compound interest on the site.

It’s a platform that we recommend for several reasons and you can read our review on Youhodler here.

Youhodler has existed since 2018 and very quickly stood out with additional services compared to other platforms.

Here are the advantages of Youhodler on others :

• A list of 39 supported cryptos, making it the broadest and most varied of competitors with DeFi tokens.
• Installments are paid every Saturday directly into your account. A short email notifies you that your interests have been submitted.
• Highest compound interest rates (weekly).
• No need for a platform utility token. The customer is not pushed to buy a token from the platform.
• There is an integrated exchange platform which facilitates the exchange of cryptos, according to market prices.
• Youhodler has protection with Ledger (the cold wallet) of more than $150 million in insurance.
• The platform has the lowest fees (with free deposit and free fiat or crypto withdrawal (only network fees) or even with 5 euros in SEPA transfer fees directly to your bank account)
• The company is part of the “Crypto Valley” association in Switzerland.
• We know the CEO, Ilya Volkov, who is very present on social networks.

Here are the interest rates:

There are other services like “Multi-Hodl” and turbo Charge which can only be interesting (we emphasize) if you know what you are doing. These are flash loan type services. This can be a good way to generate profits but you still need to master the courses. Do not try if you are a beginner and depositing your cryptos will be more than enough. Even on the Youhodler website suggests that you should not put more than 20% of your savings for this type of loan. It's risky.

We are not going to dwell on the loan part, but this can be done with a guarantee ranging from 50% to 90%. This is really huge and can – with the volatility – of cryptos be riskier. Moreover, the company is constantly innovating and we have seen that it is now possible to borrow with an NFT as collateral. We assume that these are NFTs recognized as BAYC monkeysEg.

2/ Nexo: The platform that pays every day

Nexo was created in 2018 and it is a subsidiary of the Credissimo group which was founded in 2007. The founding team therefore had very extensive experience in lending (in classic finance). There are over 2,5 million users on the platform.

As with Celsius, Nexo also has a utility token that allows you to earn more interest on these cryptos. The NEXO token has a higher market capitalization than that of the CEL token. Unlike Celsius, Nexo has already made a credit card available.

Here are the advantages of Nexo over others:

• Nexo has a credit card available.
• The company has extensive professional experience in the sector.
• Rates are sometimes the highest on the market (it depends on promotions)
• It is the only platform that allows you to lend and borrow fiat money (USD, EURO) by depositing cryptos.
• Nexo pays daily (Celsius and Youhodler offer weekly payments).
• Nexo has $375 million insurance from Ledger and BitGo.
• CEO Antoni Trenchev is also very present on social networks and in the media.
• No fees on transactions.
• You have higher interest rates if you own NEXO token (rates increase by 2%).

Here are the interest rates on Nexo :

Note: As on Celsius, you can agree to receive higher interest by receiving interest in NEXO tokens. Likewise, on Nexo, the reward system is somewhat different. You must have a certain percentage of your portfolio in NEXO (more than 10% to have a Platinum account) to activate higher interest rates.

For borrowers, as with Youhodler, we can also deposit NFTs as collateral (CryptoPunk and BoredApe Yatch Club).

The card earns you up to 2% cashback (in Nexo token) but for bank cards, it is better to consider other cards as well.

Compared to the CEL token, Nexo recorded better performances even if since May 2021, the token has been declining.

Why use crypto lending platforms?

In fact, if so many people use these platforms, it is because they allow them to generate more crypto in a simple way. The reasoning is this: A person invests in bitcoin and wants to keep it for the long term because they are convinced that it will increase in value in the next 5 years. Instead of leaving it in a portfolio, she prefers to generate 6% on it. You see? This is what motivates people to deposit their cryptos on these sites.

The sites that we are going to present to you are lending sites. These are sites where you can lend your assets and in return receive interest. Depending on the asset loaned/deposited, rates vary. Also, lending is a popular way to grow your cryptos because the business model invoked is reliable and understandable. the platform will take a commission on borrowing rates for those paid to lenders.

Likewise, depending on the platform, some use compound interest (the fact of reinvesting your capital each time to increase the amount invested and generate greater interest).

So if some prefer to race for exponential gains, you should know that on these platforms, the APYs (annual yield) are between 4 and 12%. This is certainly not spectacular but compared to a Livret A or the return on the stock markets of around 10% annually, this can largely satisfy us.

What are the risks of lending platforms?

Like all CeFi or DeFi platforms, there are risks of corruption of the team mainly or the code with hacks and bugs for the protocols on DeFi.

Of course the sites have extensive bank insurance to cover possible problems but we must always be vigilant and informed before investing.

Likewise, lending platforms may close. Many very popular platforms like Cred, Blockfi and Celsius have closed their doors. The people's cryptocurrencies were then lost. You need to keep this in mind before you start.

What factors are taken into account for this ranking?

There are different factors to consider and for our selection we observed this:

• The date of creation of the company: We want to work with the most reliable crypto lending companies that have been able to maintain themselves over time and have an international clientele. We have selected the market leading companies.
• Team revealed: Obviously, we only want to work with companies where the managers are “known” and traceable. Even if this does not prevent scams, we say to ourselves that we can at least catch these scammers whereas on DeFi, it is the ideal hideout for them.

Then, to compare the platforms, we focused on these factors (and mainly on the lender's side, the one who earns interest. We will soon see the borrowing side).

• Interest rate : Depending on the cryptos chosen, we saw those that offered the most interest. For this list, we focused on stablecoins and bitcoin.
• Platform risks and insurance: Review the company's track record and check that it has hazard insurance to reimburse any hacks. In general, the funds on these platforms are not “online” but stored in cold wallets to avoid any risk. This is also why it may take a day for withdrawals.
• Costs : Compare the costs of the different ones for depositing, withdrawing and even exchanging tokens within the platform.
• Deposit and Withdrawal Limit: Check whether there is a minimum deposit amount requirement or not on the crypto lending platform.
• Guarantee and collateral: This makes it possible to verify the economic viability of the platform.
• The utility token: some platforms have a utility token which generally increases returns; you also need to check the Tokenomics of this token…

To decide, the ideal is also to choose the platform that offers you the best return on the crypto that you have decided to invest. If you have bitcoin and want to earn interest on it, then these are the interest rates on BTC that you will need to look at.

Rnote: For those who also want to borrow, know that you can vary the platforms. Borrow on this platform and lend this crypto on one and another crypto on another.

Even if Basically it's difficult to make a ranking because there is always a factor where one crypto lending platform is better and another less. Let's say that they are still similar and that it is up to you to choose the one that suits you best. This is why it is not good to look at this classification as a ranking in ascending order.

Now let's take a look at some of the best crypto lending platforms.

Final word on lending platforms on CeFi: What about DeFi?

The main difference between crypto lending loans on CeFi and on DeFi is that on DeFi, it is you who own your private keys to access your wallet. Moreover, to know if you are on a CeFi site, this is visible from the fact that you are asked for an email and a classic password to register. Likewise, KYC is required.

It is a great advantage to be master of these cryptos but it also implies that if you lose your access, you are solely responsible and no one will be able to regain your access. Your cryptos will be lost forever.

On CeFi, it is the company that owns your keys and if you lose your connection password, a simple email is enough to reconnect you.

Likewise, in DeFi, for cases of hacking and platform hacks, even if the protocols are more secure and audited, a hack occurs and you lose your cryptos. No other forms of trial. On CeFi, wallets are subject to strict security controls and there is insurance for this type of accident, to reimburse customers.

Furthermore, if it turns out that if the team includes crooks, on the Challenge and anonymity, we cannot find the thief. On CeFi, we can at least trace the funds and white-collar scammers through the courts.

That said, we do not provide financial advice and we think it is wise to vary your deposits on several platforms and to have some on CeFi and on DeFi as well. This limits the risks. We remember the lending company Cred which quickly closed due to fraud on the part of one of the members. Now there is more security and the sites presented are older and more mature, but we must remain vigilant. Hence the importance of varying the platforms.

There are also advantages of crypto lending over DeFi, because the borrowing rates are lower and the rates for those who lend are also lower. That said, we are on Defi, and therefore no KYC which can motivate other people to use them. There are very interesting and solid protocols like Aave, Venus, Compound or MakerDao.

We are preparing the subject on DeFi for a future subject and a next video because it requires specific prerequisites.

Other crypto lending platforms

So we have just seen the 4 major global crypto lending platforms. The strongest and most established platforms.

There are other companies that we have not mentioned so as not to make this guide cumbersome, such as:

• Crypto.com who do lending and who have a native token system to increase interest. Interest can go up to 14% for USDC (provided you have more than 40,000 CRO, which is currently a whopping $17,000!). As Crypto has opened up to DeFi and the platform has a lot of services, we wanted to make a dedicated video.

• To complicate the question of choice, there are also exchange platforms like Kucoin or Binance (and many others) which offer lending services. It turns out that it will depend on whether or not you use these platforms, because it may be more practical for some to centralize everything on a single platform, although the interests would be lower.

• There is also Yield app with high rates for those who take native tokens. We are waiting for the platform to reach greater maturity before talking about it. That said, the interest rates are very reasonable and the platform is very decent.

• There is also the company Swissborg which also offers interesting interests but which is not a lending platform. Interest is generated by services other than lending and once again in this article we are only talking about platforms that offer this service entirely. Likewise, to have better interest rates, you must own GHSB token up to (for the smallest level) 2000 tokens, which makes it $2000 today).

• We can also cite Holdefi and many others…

Conclusion on generating crypto passively with lending sites

To conclude, we can still remember once again that any investment is risky. Do your calculations and your risk management carefully. There are lending sites like Cred which closed their doors just 6 months later, due to shady members and scammers.

Now you have everything or almost everything on crypto lending sites.

We are preparing other articles on other ways to earn passively such as staking and even farming.

It is good to diversify your assets and the strategies used to make them grow, this is perhaps the only certainty we can have in the world of investment.

Also, remember that investing in cryptocurrencies is nevertheless risky. The APY rates you see may also change over time.

To know which is the best platform to choose, this is a question that only you can answer. All have advantages and disadvantages.

Summary of platforms and promotional offers with our affiliate links:

• Registration on Youhodler and generate cryptos now.
• Public chat Nexo, we win $25 worth of BTC each for a deposit of $100.

Watch the video on crypto lending:

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Disclaimer: This is simply an informational article and should not be considered investment advice. Readers should do their own research, and know that investing involves risks.