Crypto lending is like a bank for your cryptocurrency, but without the suits or the paperwork.
Here’s the basic idea:
Lenders
Got extra crypto sitting around? You can lend it out and earn interest.
The interest rate you get will vary depending on the platform and which cryptocurrency you lend.
Borrowers
Need some crypto for a short time? Lending platforms let you borrow it, just like taking out a loan.
You’ll usually have to put up some other cryptocurrency as collateral, to make sure you pay it back.
Why Do People Use Crypto Lending?
Lenders: Make money on the crypto you’re not actively using.
Borrowers: Get access to crypto without having to sell what you already own (useful for traders and investors).
Important! Crypto Lending is Risky
Crypto prices go up and down a lot, which can create problems for both lenders and borrowers.
It’s a new space, so there’s the risk of platforms being hacked or going bust.
The Big Idea: Crypto lending lets you use your crypto to earn money or to get short-term access to more crypto. But it’s definitely not a risk-free way to invest!
