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how to choose a crypto loan platform

How to Choose a Cryptocurrency Loan Platform?

Published On: October 5, 2022
Despite the crypto bear market due to rising interest rates worldwide, cryptocurrency loan and lending activities are still pretty much alive and active. Many big whales and speculators who believe the crypto market will bounce back one day are already buying up all the top crypto assets and stablecoins. They do this to prepare themselves for the upcoming bull market.

These big speculators don’t mind if they have to wait for years, and that’s exactly why they put their assets on crypto loan platforms, so they can make money off the interest while they wait for the market cycle to reverse.

If you are here because you also believe in the same thing, you might want to see which cryptocurrency loan platform will provide the best and safest deals for you in the long run.

*Disclaimer: While we do our own due diligence on these platforms, keep in mind that this is not financial advice. Any cryptocurrency platform can fail, as we have seen many times in the current bear market. Make sure you do your personal due diligence on them before you put your crypto assets on their platforms, and always manage your risk accordingly.

Here Is the List of the Best Cryptocurrency Loan Platforms

1) Meld

Meld is one of the best cryptocurrency loan platforms on the planet due to its massive technology and its unique features. Meld is a non-custodial cryptocurrency loan and lending protocol that’s built on top of Cardano blockchain. They successfully raised $45 million, according to VentureBeat.

Meld allows its users to use cryptocurrency as collateral in order to get fiat loans. Meld’s advantage is that you can maintain control of your digital assets while enabling transactions between crypto and fiat positions. Meld’s fiat loans are fast and simple, you will be able to get the loans instantly after you lock your crypto collaterals. 

The unique product that Meld offers is what they call Genius Loan. With this, Meld users can take out a loan with slightly-higher interest rate, and the users only have to pay the interest, while the principal is paid through the yield generated by the collateral. The self-repaying loans are made possible thanks to the trading fees from the DEX aggregators using Meld’s liquidity pools.

Another big advantage of the Meld protocol is the fact that it’s powered by Cardano blockchain, which significantly reduces transaction fees compared to other DeFi protocols on other chains. The fact that Meld is non-custodial makes it better than some other names mentioned below, because we definitely want to avoid centralized platforms if possible.

Meld has a strong team and the core members have proven track records. Click here to try Meld DeFi app.

2) Aave

Another big cryptocurrency loan platform is Aave. It’s also one of the most famous DeFi protocols in the world. Aave is well-established in the DeFi market, it’s considered one of the pioneers, and has existed for a long time.

The biggest advantage of Aave is the massive liquidity that it has, on multiple chains. The interest rates are clearly displayed from the very beginning you connect your wallet to. Since it supports most of the major chains, this is perhaps the best crypto loan platform for newbies.

Aave also offers Bug Bounty and flash loan programs. There are rewards up to $250,000 in USDC tokens if you can find critical bugs in their platforms. While Aave doesn’t offer unique features like Meld’s genius loan, for example, it is still one of the top choices for crypto lending or loan platforms.

Click here to try Aave

3) Compound

Another big name and one of the first mainstream DeFi protocols ever is Compound. Compound has plenty of stablecoins and other crypto assets on the Ethereum mainnet. It also offers its own COMP token that can provide better yields when you provide liquidity to the protocol.

Just like Aave, Compound’s user interface is fairly simple. It offers two columns, supply and borrow markets. For crypto loans, you can go to the borrow markets and check the current interests. However, keep in mind that Compound’s crypto loan is fairly limited to using crypto collaterals and getting crypto loans in return.

Unlike Meld, where it offers a crypto-to-fiat loan platform, Compound is utilized mostly by DeFi arbitrageurs and speculators.

Click here to try Compound

4) Nexo

Used to be the biggest crypto loan platform in the world, Nexo lost its popularity to Celsius Network back in the 2021 bull market. However, Nexo is still alive this year, despite the problems that have been plaguing Celsius. Nexo is a centralized platform where you can get a fiat loan by using cryptocurrencies as your collateral.

The idea here is that you don’t have to sell your cryptocurrencies if you need instant cash. You can just put them as collaterals to Nexo, and you pay your loan to redeem your collaterals. The LTV (loan-to-value) you can get is up to 50% for Bitcoin and other major assets, which is pretty decent considering the current market situation.

If you need a higher amount of cash loan, Nexo is probably your best bet. While it has its own shortcomings, it’s still one of the top platforms in our list.

Click here to try Nexo

5) Binance

If you are still new in the cryptocurrency world, you might not expect this name. Binance is mostly known as a spot cryptocurrency exchange. However, it also offers a crypto loan platform that you can access on their specific loan page. The TVL can go up to 65%, which is higher than what Nexo offers, and you can even get a higher TVL if you are their VIP member.

Binance has deep liquidity and bigger companies probably will want to borrow on Binance rather than other names in the list if they need a lot of cash for their operations. Keep in mind that Binance loan platform is centralized, so it’s a bit of disadvantage if you are looking for non-custodial platform to get a cryptocurrency loan.

That being said, Binance has been operating for years and they have deep pockets. The loan rates and policies look fair enough and it’s definitely one of our top recommendations.

Click here to try Binance Loan

Final Thoughts

Every platform mentioned above has its own advantages and disadvantages, but we believe some provide more flexible options than the others. Meld has the most unique offers, due to its platform being non-custodial and yet it still offers fiat loans at the same time. Its genius loan feature is unmatched, and it makes Meld stand out on its own.

In the end, we highly suggest you to do your own due diligence before you decide which cryptocurrency loan platform you want to try.
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