Crypto Lending Platforms Interest Rates for October 2022

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Edited by

October 7, 2022 - 13 Min Read

Name
Editor's Pick
0.01%
0.13%
5%
5%
2.71%
3.5%
-
0.19%
1%
6%
5%
2.5%
3.5%
-
0.74%
0.59%
10%
6.5%
5%
7.5%
0.15%
1.3%
1.27%
10%
6.5%
-
-
-
0.98%
0.66%
10%
-
4.8%
6%
0.15%
0.01%
0.13%
-
-
-
-
-
Chainlink
LINK
0.31%
0.83%
5%
-
0.45%
1%
-
-
-
-
-
4.94%
-
4%
TrueUSD
TUSD
0.74%
0.58%
10%
-
-
-
-
Basic Attention Token
BAT
0.04%
0.29%
-
-
1%
1%
-

Crypto lending allows you to loan out your crypto and earn an annual percentage yield (APY) in return. Your funds are used to provide loans to investors looking to borrow crypto, and part of the interest that they pay on their crypto loans is paid to you in the form of APY. There are a number of platforms that help make lending your crypto simple.

Key Takeaways

  • Lending allows you to earn passive rewards on your existing crypto. Lending rewards are typically paid out “in kind,” meaning you receive more of the tokens you are lending out.
  • Rewards for lending vary depending on tokens, platforms, and market conditions, but are normally between 2% - 10%+ APY.
  • Keep in mind that while your tokens are loaned out, you no longer have custody of them. Major lending platforms have collapsed before, so it’s important to choose carefully.

How Does Crypto Lending Work?

Crypto lending refers to the process of taking deposited crypto from one party (the lender) and loaning it out to another party (the borrower). Unlike traditional loans, which are usually done by a centralized institution like a bank, crypto loans are typically between individuals on either side of the loan.

Lending platforms connect you to borrowers by allowing you to deposit the crypto you would like to lend out and then lending it out on your behalf while providing you with yield over time. This yield is normally fixed and starts accruing immediately, so you don’t need to wait for your money to actually be loaned out to start earning.

Lending through DeFi (decentralized finance) platforms is also an option for the more advanced user. These platforms allow you to lend tokens out directly to borrowers via smart contracts, and you earn rewards directly when your crypto gets borrowed. Reward rates for DeFi lending typically fluctuate by the second and are much less stable than lending through a centralized platform.

Where to Lend Crypto

Crypto lending is supported by dozens of different platforms. Each platform has different terms, supported assets, and rewards, so it’s important to look through several platforms before choosing one. Below we list our top picks for crypto lending platforms:

Crypto Lending Platforms

Cake DeFiNexoBlockFi
Supported TokensBTC ETH USDC USDTBTC ETH SOL XRP + moreBTC ETH SOL ADA + more
Interest Rate Ranges2.5% - 6.5%1.5% - 16%1% to 15%
USA Customers?YesNoNo
Lockup Period4 weeksFixed Term loans are either 1 or 3- month lockups FLEX Term loans have no lockup periodNone
Withdrawal FeeBitcoin: 0.0005 BTC Ethereum: 0.005 ETH USDC: 10 USDC USDT: 10 USDT1 free crypto withdrawal per month + a variable transaction fee for any additional withdrawalsBitcoin: 0.00025 BTC Ethereum: 0.0135 ETH
Generates Yield ThroughProviding loans that are secured by institutional custodians Sparrow and Singum Capital who take a small fee off the top of loan yields.Providing overcollateralized loans.Providing overcollateralized loans with limited loan sizes and types of accepted collateral. Also providing uncollateralized loans only to “largest and most established Tier 1 clients.”

Cake DeFi (For US users)

Cake DeFi is a crypto lending platform that focuses on lending BTC, ETH, USDC, and USDT.

The platform works by locking up loaned funds for 4 weeks at a time in “batches.” At the end of each batch, funds are available for withdrawal. Each batch guarantees a certain base APY on loaned funds and also allows for a “bonus” APY if the price of the crypto asset (such as BTC or ETH) exceeds a certain price target.

Crypto lending with Cake DeFi

Interest rates: Variable

Why lend with Cake DeFi?

  • The platform guarantees base APYs when lending.
  • Additional rewards are provided if the price of the crypto asset hits a certain target during the lending period.
  • Cake DeFi does not charge users any fees for their lending service.
  • You can loan out any amount of your choice.
Supported TokensInterest Rate RangesUSA Customers?Lockup PeriodWithdrawal FeeGenerates Yield Through
Cake DeFiBTC ETH USDC USDT2.5% - 10%* *6.5%+ APYs are available through the Earn product which combines traditional lending with liquidity mining. Note that this is a riskier product.Yes4 weeksBitcoin: 0.0005 BTC Ethereum: 0.005 ETH USDC: 10 USDC USDT: 10 USDTProviding loans that are secured by institutional custodians Sparrow and Singum Capital who take a small fee off the top of loan yields.

Learn more about Cake DeFi by reading our full Cake DeFi review, or start lending at Cake DeFi now.

Nexo (For non-US users)

Nexo is one of the biggest crypto lending platforms and provides some of the highest APYs on loaned funds. Nexo leans heavily on their native NEXO tokens, which provide additional lending returns for users. If users opt to receive their APY rewards in NEXO tokens rather than in the token they lent out, the platform rewards them with an extra 2% APY bonus.

The highest tier of the Nexo loyalty program, which boosts returns by as much as 5% APY on some assets, requires 10% of your portfolio to be held in NEXO tokens.

Below is an example of the different APY rewards for lending Bitcoin through NEXO.

Base Loyalty Tier (less than 1% of your is in NEXO tokens)Silver Loyalty Tier (1% to 5% of your portfolio is in NEXO tokens)Gold Loyalty Tier (5% to 10% of your portfolio is in NEXO tokens)Platinum Loyalty Tier (10%+ of your portfolio is in NEXO tokens)
No Lockup Period3%3.25%3.5%4%
1 Month Lockup Period+1%+1%+1%+1%
Receive APY rewards in NEXO tokens--+0.25%+1%+2%
Maximum APY4%4.5%5.5%7%

Please note: Holding NEXO tokens exposes you to the volatility of the NEXO cryptocurrency. If the price of the NEXO tokens drops significantly, you may end up worse off than if you had taken the lower APYs that don’t require holding NEXO tokens.

Lending at Nexo

Interest rates: Fixed

Why lend with Nexo?

  • Holding NEXO tokens enables the higher tiers of APY earning.
  • The platform offers daily interest payouts.
  • Receiving payouts in NEXO tokens confers a 2% APY boost to loaned funds.
  • Nexo features $775M in insurance for deposited client funds.
Supported TokensInterest Rate RangesUSA Customers?Lockup PeriodWithdrawal FeeGenerates Yield Through
NexoBTC ETH SOL XRP + more1.5% - 16%NoFixed Term loans are either 1 or 3- month lockups FLEX Term loans have no lockup period1 free crypto withdrawal per month + a variable transaction fee for any additional withdrawalsProviding overcollateralized loans.

Learn more about Nexo by reading our full Nexo review, or start lending at Nexo now.

BlockFi (For non-US users)

BlockFi is a crypto exchange that provides borrowing, lending, and trading services. BlockFi automatically loans out funds that users store in their “BlockFi Interest Accounts.” These funds do not have a lockup period and can be transferred out at any time. As long as they are stored within BlockFi’s vaults, the funds are earning interest.

Lending with BlockFi

Interest rates: Fixed

Why lend with BlockFi?

  • There are no lockup periods, and you can withdraw your principal instantly (with your earned interest following soon after).
  • A wide variety of assets, including altcoins like BAT, GALA, and AXS, are supported.
  • Choose between BTC, ETH, or stablecoins to receive your interest rewards.
  • The compound interest accounts do not require any minimum balances.
Supported TokensInterest Rate RangesUSA Customers?Lockup PeriodWithdrawal FeeGenerates Yield Through
BlockFiBTC ETH SOL ADA + more1% to 15%NoNoneBitcoin: 0.00025 BTC Ethereum: 0.0135 ETHProviding overcollateralized loans with limited loan sizes and types of accepted collateral. Also providing uncollateralized loans only to “largest and most established Tier 1 clients.”

Learn about BlockFi by reading our full BlockFi review, or start lending at BlockFi now.

DeFi Lending Platforms

CompoundAave
Supported Collateral AssetsWBTC ETH USDC AAVE BAT COMPFEITUSD USDT USDP DAI LINK MKR SUSHI UNI YFI ZRXWBTC ETH DAI CRV BUSD FRAX GUSD LUSD sUSD TUSD USDC USDP USDT 1INCH AAVE BAL BAT CVX DPI ENJ ENS LINK MANA MKR RAI REN renFIL SNX UNI WETH xSUSHI YFI ZRX stETH
Interest Rate Range0.01% - 1.56%0.01% - 14.98%
Blockchains SupportedEthereumEthereum Polygon Avalanche Fantom Harmony Arbitrum Optimism
LTV WBTC - 70% ETH - 82%WBTC - 70% ETH - 82.5%

Compound

Compound is a DeFi platform that allows lenders to loan crypto out directly to borrowers.

As a DeFi platform, Compound is a platform of smart contracts that match up lenders and borrowers. All loans originated through the platform are funded by individual lenders looking to earn yield on their crypto. Compound makes sure the necessary collateral is set aside for each loan, and they pass on interest earnings to the lender.

Lending with Compound

Interest rates: Variable

Why lend with Compound?

  • The decentralized nature of the protocol means they are much less likely to halt withdrawals during market volatility.
  • Compound is community led through the COMP governance token, which allows token holders to vote on the future of the protocol.
  • No identity verification requirements.
  • No restricted countries where the protocol is unavailable.
Supported Collateral AssetsInterest Rate RangeBlockchains SupportedLTV
CompoundWBTC ETH USDC AAVE BAT COMP FEI TUSD USDT USDP DAI LINK MKR SUSHI UNI YFI ZRX0.01% - 1.56%EthereumWBTC - 70% ETH - 82%

Learn more about Compound by reading our full Compound review, or start lending at Compound now.

Aave

Aave is a DeFi platform that connects buyers and sellers and lenders and borrowers.

Similar to Compound, Aave is a DeFi platform that maintains a series of smart contracts which execute the platform’s functions. These functions include trading, lending, borrowing, staking and more. Aave has a strong ecosystem with a wide range of supported cryptocurrencies and blockchains.

Lending with Aave

Interest rates: Variable

Why lend with Aave?

  • Lots of supported cryptocurrencies.
  • A wide range of supported blockchains.
  • Highly innovative protocol with features such as flash loans.
  • Strong history with no reported security incidents.
Supported Collateral AssetsInterest Rate RangeBlockchains SupportedLTV
AaveWBTC ETH DAI CRV BUSD FRAX GUSD LUSD sUSD TUSD USDC USDP USDT 1INCH AAVE BAL BAT CVX DPI ENJ ENS LINK MANA MKR RAI REN renFIL SNX UNI WETH xSUSHI YFI ZRX stETH0.01% - 14.98%Ethereum Polygon Avalanche Fantom Harmony Arbitrum OptimismWBTC - 70% ETH - 82.5%

Learn more about Aave by reading our full Aave review, or start lending at Aave now.

How to Lend Crypto

Step 1: Head to the Cake DeFi website (www.CakeDefi.com). Sign up for an account or log in if you already have one.

Lending with Cake DeFi

Step 2: Head to the “Lending” dashboard to choose your lending batch. A batch is a four-week lending program that Cake DeFi offers for different cryptocurrencies, with the expected interest rate disclosed upfront.

Lending with Cake DeFi

Step 3: Click “details” to see more information for each batch, such as the starting and ending date.

Lending with Cake DeFi

Step 4: Click the "Enter" button after confirming the batch details. Type in your desired contribution, and you're good to go.

Lending with Cake DeFi

What Tokens Can You Lend?

Generally, any cryptocurrency can be lent out as long as there is a borrower for that crypto and an exchange that supports lending of the crypto. As with most financial offerings, the most common tokens are supported for lending throughout most exchanges:

  • BTC
  • ETH
  • USDC
  • USDT
  • SOL
  • ADA
  • XRP

Crypto Lending Terms

When loaning out your crypto, you can set the length of time that you would like your funds to stay loaned out for. During this time, your funds are locked and cannot be withdrawn or used for any other purpose.

Most platforms allow clients to decide what period of time they would like to loan their funds out for — often, the longer the term, the better interest rate you will receive. Several platforms also provide support for open-term lending where money is not locked up and can be withdrawn at any time — this option, however, may reduce the APY.

The majority of CeFi platforms use a lock-up term for funds as their default lending option, while almost all DeFi platforms only support open lending.

Risks of Crypto Lending

CeFi Risks

  • Exchange security: Any money deposited into a centralized exchange will carry with it the risk of security compromises to the platform. This is a rare event for most platforms, and a lot of them have insurance policies set aside which will cover client funds in the event of a breach, however, it is something to keep in mind.
  • Platform insolvency: The volatile nature of crypto markets means that even some of the biggest names in the space are just one big crash away from bankruptcy. In 2022, crypto lender Celsius made headlines when they announced they were halting all client withdrawals from their platform and then filed for bankruptcy, leaving many investors scrambling to recover their funds.
  • Regulatory risk: New crypto regulations from various countries are always coming out, and centralized platforms have to abide by these rules or face getting shut down. New laws may make certain crypto trades limited to accredited investors, which previously were not, or they may re-draw jurisdiction lines, so certain features or even entire platforms are no longer available.

DeFi Risks

  • Vulnerability exploits: The DeFi world is incredibly efficient in processing millions of transactions with no human intervention, however, the code underlying it all is not impervious to hacks. While the biggest DeFi protocols have a strong history of withstanding attacks, it’s important to remember that any time you connect your wallet to a new service, you are opening your wallet up to exploiters if the service gets hacked at some point in the future.
  • Fraud and shady actors: The crypto world is full of scammers looking to steal your hard- earned coins. The more you use different exchanges, the more likely you are to become the target of phishing attacks and other social engineering schemes. It’s important to always be on high alert, always check the URLs of the sites you are visiting, and never give your passwords or seed phrases away.

Crypto Lending vs. Staking

Crypto lending is different from crypto staking since lending rewards come from interest paid out on crypto loans. Staking rewards, on the other hand, come from network fees and newly issued tokens from the network.

Crypto LendingCrypto Staking
Rewards Come from borrowers of your crypto paying interest.Come from the transaction fees of the crypto protocol itself + newly issued tokens.
Leveraged returnsNot available Loaned tokens cannot be used for anything other than earning interest while locked up.Available Use liquid staking to get a derivative token while your underlying tokens remain staked.
Minimums to get startedGenerally lowCan sometimes be high
RisksSince you are often giving your crypto up to centralized platforms to lend out, if these platforms become insolvent or experience liquidity issues, your funds may be at risk. Staked funds are ultimately delegated to chain validators who themselves have to perform well, or they run the risk of having the delegated tokens slashed by the protocol.

Crypto Lending Taxes

APY rewards earned from lending out your crypto are subject to taxes. These earnings are treated as income and are taxed based on the value of the cryptocurrency at the time you receive your earnings.

Remember, any time you sell cryptocurrencies, you are also incurring a tax based on the amount your tokens have appreciated or depreciated since you obtained them. If your APY earnings appreciate over time, you will be subject to a capital gains tax on this appreciation.

Find out more about crypto taxes here.

Crypto Lending Platforms

In addition to those covered above, some other platforms that support crypto lending include:

OTC Crypto Lending

Over-the-counter (OTC) lending is a special tier of crypto lending that caters to clients deploying large amounts of capital. OTC lending platforms normally work with clients directly through account specialists and provide premium, unadvertised APY rates for corporations, banks, and high-net-worth individuals looking to lend out crypto.

Here are our top picks for OTC lenders:

Frequently Asked Questions

  • What’s the difference between crypto lending vs. staking?

  • What are the risks of crypto lending?

  • What crypto tokens can you lend?

  • What are the terms of crypto lending?

  • Is crypto lending profitable?

  • Which crypto lending platform is best?

  • How do you earn from lending crypto?

  • Can you borrow against your crypto?

  • Is crypto lending taxable?