With the evaluation of the cryptocurrency sphere itself more different crypto projects and solutions constantly appear. Nowadays crypto lending projects like Nexo, Celsius, Crypto.com, CoinRabbit and others have become wide-spread and popular among cryptocurrency believers and serve as financial instruments for different types of the market conditions.
Such projects provide clients with an opportunity to lend & borrow cryptocurrency, and also earn interest via cryptocurrency deposits. All of them are unique and have their distinctive features and terms.
Still the question appears - how to define the best crypto lending solution that fits your requirements great? In this article we will compare the main features of such projects to help you make the right decision.
Main Crypto Lending Criteria That Define a Great Project
There are several things you have to keep in mind while choosing the right crypto lending project to fit you favourably: APR (Annual Percentage Rate), LTV (Loan-to-Value), flexibility, ease of usage and more. Let’s take a closer look at these features.
Annual Percentage Rate (APR)
Annual Percentage Rate is the annual rate of interest charged to borrowers and paid to lenders. In terms of crypto lending the best choice for clients is to find a project with the lowest APR. It will provide you with less fees while using lending solutions, and as a result your total returns will also increase.
Here is the list of reputable crypto lending projects with the lowest APR:
- BlockFi has 3 different types of APR: 4.5%, 7.9% and 9.75%. These rates depend on the loan terms and collateral currency you choose;
- Nexo APR differs from 6.9% to 13.9% and also depends on the loan terms and currency chosen as collateral;
- CoinRabbit implemented 10% APR for any collateral currencies and loan terms.
Loan-to-Value is a financial term used by lenders to express the ratio of a loan to the value of an asset. Within crypto lending solutions LTV is a number lenders use to determine how much risk they are taking on with a secured crypto-backed loan. From the perspective of a client it means how much percent of the value of the collateral he or she will receive once using crypto lending solutions.
Usually the best LTV options differ by around 50%. It will provide you with an opportunity to have enough time to either buy your collateral back and pay off the loan or increase your deposit amount to decrease the liquidation price and prevent you from losing your collateral completely.
There projects have best LTV on the market:
- Youhodler provides their clients with various up to 90% LTV rates. Yet it depends on the overall chosen loan terms and collateral;
- Nexo also has different up to 90% LTV rates which also relies on the loan term and collateral currency;
- CoinRabbit applied flexible LTV rates starting at 50% for any collateral currencies. You can adjust the percent at any convenient time.
Time Frames of Crypto Loans
Crypto loan time frame defines the period when the loan should be fully paid off. The best choice is to find a project that provides unlimited or long time frames so you won’t be in a hurry.
Best options for this case are:
- CoinRabbit has unlimited time frames. It is up to the clients to decide when to pay off the loan let it be 1 hour, 1 day or 50 years;
- Celsius provides their clients with up to 5 years time frames. No min loan period restrictions;
- Nexo has their default max loan period as 1 year with no minimum period restrictions as well. Yet it can be extended by completing several requirements like holding their token or increasing the deposit amount.
Security of a crypto lending project is defined by all the layers, control systems, external and internal solutions implemented to keep your funds safe and guarantee the transactions to be invulnerable while your funds are being transferred to the destination address. It is one of the most important parts while choosing a crypto project to trust them with the funds.
These crypto lending projects deserved to be called the most secure in the sphere:
- Nexo is undeniably the most secure crypto lending project nowadays. With no doubts it is the best place to trust with the funds secure and safely. BitGo insurance, bank-grade storage, regulatory compliance and AML (Anti-Money Laundering) is only a part of security measures they have implemented for the services;
- Celsius provides transparent and secure services with different layers such as Multi-Factor Authentication, cyber threat intelligence, cloud security, data retention and more measures that make your funds safe;
- Crypto.com holds 100% of user cryptocurrencies in cold storage. Users’ fiat currencies are held in regulated custodian bank accounts. The access rights to the funds are constantly strictly controlled. All the measures they have implemented makes their service one of the most secure in the sphere as well.
The Number of Supported Assets
The number of supported assets reflects how many options you have within selected crypto lending projects to choose from. It is better to choose the project with more different lending options.
Check the list of projects and platforms with the largest lists of supported assets:
- Celsius has impressive list of 32 different collateral options;
- CoinRabbit provides you with the list of 29 various collaterals;
- Nexo supports 21 digital assets as collateral.
Speed and Ease of Use
When it comes to user experience, speed and ease of use is highly valued. No one loves to spend hours of time to sign up, enter all the personal and contact information and pass multiple confirmations before starting using the product.
These crypto lending projects provide the best user experience in terms of its operating speed and simplicity:
- CoinRabbit implemented one of the easiest and fastest crypto lending solutions. It takes under 10 minutes to receive and start spending your funds. You should not pass any registration or KYC (Know Your Customer) procedure. The only thing you have to do is to verify your phone number to have access to your loan control panel later;
- BlockFi also has a relatively easy process of taking a crypto-backed loan and usually it takes under 1 day to sign up and pass their KYC procedure;
- Guarda Wallet's process of taking a crypto-backed loan is simple: navigate to their website and create a wallet. And that’s it. You will be able to get funds without passing any KYC or other verification procedures.
Loyalty And Referral Programs
Loyalty and referral programs provide clients with an opportunity to receive benefits over other users within the project for meeting necessary requirements: for example, for holding a certain amount of projects’ tokens or several successful registrations via referral links. It might be better loan or deposit terms, service priority or any other advantages.
These projects implemented different loyalty, referral or flexible programs that might be of your interest:
- Crypto.com has different terms for deposits. The terms depend on the amount of deposit, chosen time frame, amount of their token in your portfolio and the type of deposit (crypto or stablecoin). This is why their APY (Annual Percentage Yield) differs between 1% and 14%;
- CoinRabbit offers a limited-time promo for anyone who opens a stablecoin savings account until November 30. Each client will get 10% APY and a special FREE 25% earning bonus in $BTC, $XNO, $DGB, $XRP, $FIRO, $DOGE and $SHIB.
- Nexo has several loyalty tiers to increase the client's interest rate. To qualify for the highest platinum loyalty tier it you should make sure you have at least 10% of your portfolio balance comprices NEXO tokens. It will increase your APY up to 12%;
- Celsius provides different APY (Annual Percentage Yield) rates for different assets between 0.5% and 13.99%. You can choose between earning in the same currency or in their own CEL token which will provide up to 17.78% increased APY.
Crypto lending industry is constantly growing. Nowadays more different platforms and projects appear which makes it hard to choose the right one. While keeping in mind previously mentioned cri it is easy to define the best option that will meet your needs greatly.
Not financial advice. Do your own research and take everything moderate. Crypto backed loans have their own risks that should be taken respectively.