The Litecoin Foundation has announced that they are teaming up with Cred to offer lending services to LTC holders. Cred, or CredEarn, is a financial lending platform for crypto. Basically, you give them your crypto and they offer a percent annual return. In this case, Cred is offering LTC users a 10% annual return, which is quite high.
CredEarn takes your crypto, agrees to pay it back, then uses that to lend to retail services or other investors. They take your money and use it to make more money for themselves.
Just like a bank lends money through a loan, CredEarn loans crypto, that you give them, make a percent on the interest, then uses this to pay you back a percent on your crypto lending.
Their own words are:
“Cred is able to leverage its returns by lending digital assets to a variety of customer segments, including crypto miners, digital asset companies, crypto investment funds, and retail investors. Cred lends to retail customers and companies on a guaranteed and collateralized basis and never lends to short-sellers.”
That last part is nice, as short-sellers would be hoping the price of your assets drop. But through the coded finance-speak, there is still the possibility that you lose your crypto by lending it to Cred. Sure, they won’t tell you this, but it’s a fact that with any lending service, you may not get your crypto back.
If they get hacked or close down, maybe you get it back, maybe you wont. And the crypto space is loaded with examples of the latter happening.
In their own words:
“Cred is not a bank, your funds are not considered deposits, and the CredEarn product is not FDIC insured.”
Cred offers lending in LTC, BTC, ETH, BCash, XRP and...I think USD? Idk.
Their website is not very pleasing to look at or use.
If you take a link for example here, there is no button or link back to a main page. It stands as its own page. This is the case with any asset. There is no route back to the main page!
The website footer has a link to the FAQ, but you cannot right click the link and open in a new tab. It opens in a new tab for you, but removing your choice makes the website feel outdated. Anyway the FAQs are under another page on the FAQ page, making the user go through extra steps on the FAQ page itself to get to the actual FAQs.
The front page lists different assets. One shows a green USD symbol. Is that Tether or USD? I don’t know because clicking it doesn’t take me to anything. It is a broken link! On the front page!
The touted 10% is a max, best-case scenario. It is not guaranteed. Is a % return worth risking all the lent crypto in a nightmare scenario? That’s up for you to decide.
What do you think about lending services? Are they worth your time? Have you ever used any? Leave your thoughts in the comment section below.
