You are currently viewing What is Crypto Lending: Ultimate Guide |  by Qryptography |  Coinmonks |  Oct, 2022

What is Crypto Lending: Ultimate Guide | by Qryptography | Coinmonks | Oct, 2022

what is crypto lending?

Do you wonder about some great ways to earn passive income using cryptocurrencies that offer high returns and require little to no effort, then Crypto Lending can’t just be a thing that you should miss!

Crypto Lending can be one of the most passive ways to earn money using cryptocurrencies and it offers some of the highest APY’s that you can’t even imagine.

Best thing about Crypto Lending is that it defines the true meaning of passive income as it just makes us money automatically, we don’t need to work actively to generate income, we just put some money and start making more money from it automatically!

In this article we are going to see What is Crypto Lending, Is it profitable, Is it safe, Pros and Cons, and how to do it, so let’s begin.

what is crypto lending?

Crypto Lending is a simple process in which we lend out cryptocurrency to borrowers to get interest. It’s basically giving crypto loans to borrowers and collecting interest rates from them, just like regular bank loans, there are also crypto loans, and they often have high interest rates! It involves the lender and the borrower, lender is the person who gives the loan and borrower is the person who takes the loan and provides interest to the lender.

Crypto Lending offers us the opportunity to get paid without even lifting our finger! after it is set up. It’s a super simple process, crypto lending platforms offer people the opportunity to deposit and lend their crypto out and get paid in APY(Annual Percentage Yield).

The damn best thing that I see is that there are super high APY’s in Crypto Lending, further in this article I would show you a method to get up to 730% APY!

how does crypto lending work?

Cryptocurrency lending is similar to peer-to-peer lending in which lenders and borrowers collect through an online platform, the only difference is that in crypto lending, the transactions are directly made using cryptocurrencies.

There are online platforms that provide this facility, usually many famous cryptocurrency exchanges have this lending feature on them, which offers borrowers the opportunity to take loans and lenders the opportunity to give loans.

So simply a borrower who is need of a crypto loan will go to an online platform that provides loans, then he would find a lender there who is ready to give him a loan. Just like in regular banks, the borrower will need to give interest rates to the lender, and that’s how the lender will make money.

is crypto lending profitable?

Crypto Lending can be super profitable if done correctly, it can be 10x more profitable than starting a traditional bank account that gives us interest on lending, Crypto Lending is one of the most easiest ways to start generating crypto passive income.

It offers super high interest rates that we don’t usually get anywhere else. You only need a couple minutes to set it up once and you start generating money without even lifting your finger! That is the beauty of the Crypto World.

Considering How Profitable is Crypto Lending, it seems like a very simple thing, but it isn’t. Just like everything else in this world, Crypto Lending also has some pros and cons so let’s discuss those.

crypto lending pros and cons


  1. Super Easy to start with.
  2. Generates Passive Income on Autopilot.
  3. Gives Crypto hoodlers the opportunity to earn some extra yield.
  4. Offer’s Great Interest Rates.


  1. It is not the safest way to earn crypto passive income.
  2. High Reward Means High Risk.
  3. You can loose a lot of money if not done correctly.
  4. There are a lot of Crypto Lending Scams.

Now that you know from the cons that Crypto Lending has some risk, let’s discuss what are those risks.

crypto lending risks

Everything in this defi(Decentralized Finance) crypto industry has risks, although the risk associated with Crypto Lending is not that risky, but still it is important to know them before deciding whether Crypto Lending is for you or not. The Top 4 Risk Involved are as follows:

  1. Absence of Regulation: Nowadays there are many countries that are trying to ban cryptocurrencies, but there are also many countries that are trying to regulate the use of cryptocurrencies, therefore there is no global regulatory agreement. So if any loan defaulting occurs, recovering your assets can get quite complicated.
  2. Volatility of Cryptocurrencies: Just like any other thing in this crypto world, volatility also affects crypto lending. Let’s say someone takes a $100 loan and the price goes up 2x during the loan term based on the contract, the lender is going to loose half of his investment in crypto amounts, as the borrower will pay back using dollar amount, and now $1000 is half the amount in crypto as crypto price went up.
  3. Digital Theft: Most of the crypto lending platforms will require you to deposit and hold your cryptocurrencies in their platforms, which is extremely unsafe, as unlike a cold hardware wallet, you do not own the private keys to your wallet. And these exchanges are often targeted by hackers and thieves.
  4. Platform Failure: Most of the Crypto Lenders will rely on the lending platform that they are using, and in a lot of cases, these platforms are very unstable and also financially weak which can cause them to fail at any time, that’s why we must choose an established and trusted and stable platform.
how to start crypto lending?

Here are the three simple steps to starting with crypto lending:

  1. Buy Some Crypto: Simply buy some cryptocurrency like bitcoin that you want to lend, you could buy cryptocurrencies on crypto exchanges, I highly recommend to choose only bitcoin, ethereum or usdt for this purpose as they are the most established cryptocurrencies and have the lowest risks.
  2. Transfer Those Funds To a Lending Platform: Now you need to transfer the crypto you bought to a lending platform, that’s where you can lend that crypto out to borrowers to start generating interest. The main factor when it comes to choosing a good lending platform is that how established that platform is, further in this article I give you the list of the safest lending platforms.
  3. Lend it out: Now that you have money in your lending platform, it’s time to start lending it out, most platforms will offer you several interest rates to choose from, choose interest rates based on your preferences and you would now start making crypto passive income on autopilot.
  4. Enjoy your money: Now that everything is setup, you are going to start making passive income, you can also loose money, but hope for good luck, you can use this as a very great method for making money online.
best crypto lending platforms
  1. Kucoin: Kucoin is the world’s 4th largest crypto exchange that’s why it makes a lot of sense as to why it is in the list, it offers some of the highest interest rates in the market, also it offers several other ways to earn crypto passive income . Click Here to signup for Kucoin to get $500 in deposit bonuses and 10% fee deduction.
  2. is the world’s 6th largest crypto exchange, it is one of the most trusted crypto exchanges and also offers really great and reliable crypto lending services and it has several methods to earn crypto automatically. Click Here to signup to get $5500 deposit bonuses and $50 fee deduction.
  3. Bitfinex: Bitfinex is the world’s 7th largest crypto exchange, it offers a lending pro, which gives very advanced lending services, it has great interest rates and is very reliable. Click Here to signup to Bitfinex and get a 15% fee deduction.

According to us, you should definitely look into crypto lending as it can be a great way to start generating crypto passive income. Of course it comes with it’s own risk just like with any other investment. I recommend you to hold 12.5% ​​of your crypto portfolio at least in Crypto Lending.

It’s not guaranteed that you would always be making profits, but in most of the cases you would make more than you would lose, and the best thing about crypto lending, let’s say compared to crypto trading is that crypto lending gives the real definition of passive income, as we don’t need to do anything once set up.

Click here to find out about the top 5 best crypto passive income sources and how to organize your crypto portfolio for these.

best crypto lending alternatives

Here are some of the best alternatives to crypto lending:

  1. Crypto Trading Bots: Crypto Trading Bots are AI based systems that can trade for us. In this we provide the bot with some money to trade with and some basic information like choosing the crypto that we want it to trade. We can also form our own strategy in some trading bots, thus telling the bot when to buy and when to sell, it will execute the orders itself.
  2. Cloud Mining: Cloud Mining is a type of mining in which we can mine cryptocurrencies without using any of our own hardware. In that we use the hardware of a cloud mining service, most cloud mining services are paid and offer a return on investment if we invest in their mining plans.
  3. Crypto HODL: HODL is by far the simplest and the safest way to earn money passively using cryptocurrencies. HODL simply means holding in the crypto industry. In this all we do is buy some cryptocurrency and leave itunlike crypto trading, we don’t sell our assets here, we rather hold them long term and wait for price to go up in the long term.
  4. Crypto Staking: Crypto Staking is a method in which we owe our coins to the blockchain, they get a locked for a period of time, which helps to add blocks to the blockchain and verifying transactions. As we are supporting the blockchain, we get a staking reward in return of that in the form of APY(Annual Percentage Yield).

Click Here to get all the advanced details about these methods.

So after reading today’s article you would have got a clear idea about what is crypto lending, is crypto lending profitable, pros and cons, how to do crypto lending, best crypto lending platforms and what are the alternatives to crypto lending. Still if you have anything to share or any questions, comment down below.

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