It's no secret that cryptocurrencies are within the midst of a multi-year bull market proper now, with main belongings like BTC and ETH chasing all-time highs and most different tokens, together with memecoins, steadily gaining energy. It's additionally no secret that there's by no means sufficient capital to purchase all of the belongings in your bull market want listing.
The answer is lending protocols that permit DeFi customers to deposit a single asset resembling ETH or BTC and borrow stablecoins that may then be exchanged for different belongings, be it AI tokens, RWA belongings or memecoins. Used responsibly, lending permits savvy DeFi customers to maximise their income. They will profit from a rise within the worth of their collateral whereas utilizing their borrowed belongings to make extra income.
However the borrowing protocol you select will decide the belongings you may deposit, the methods you need to use your borrowed funds, the curiosity you pay, and the loan-to-borrowing ratio you may keep. Listed here are the highest 5 lending protocols that gives you probably the most bang to your buck.
Nolus
Nolus is a cross-chain lending protocol that’s on the rise. Since launching lower than a 12 months in the past, that's a decent $3.3 million in TVL and $55 million in quantity. There are two issues that make Nolus a really perfect answer when coping with a bull market. First is its ingenious provision of as much as 150% funding – 3x the trade common – by means of its DeFi Lease product. This permits the lenders to acquire the utmost accessible capital and thereby receive the utmost accessible return.
As for the way Nolus achieves this with out rising the danger of liquidation, it’s as a result of the deposited asset – the deposit – and the borrowed asset are mixed to acquire the asset the person wishes. By pooling these sources, it’s attainable to achieve entry to rather more capital than would in any other case be accessible. The opposite neat factor about Nolus is that it doesn't liquidate the person's place in full ought to they turn out to be undersecured. Moderately, it manages a partial liquidation, thereby offering ample alternative to replenish collateral and reduce draw back threat.
Aave
Aave wants no introduction to DeFi customers because it has established itself as a mainstay within the $36 billion DeFi lending trade. $20 billion of that complete comes from Aave itself, whose multi-chain attain, sturdy safety and user-friendly interface have made it a favourite of everybody from minnows to whales. Greater than 160,000 native token holders can take part in onchain governance, which implies Aave can even declare to be one of the decentralized lending protocols available on the market.
With eight supported networks, Aave gives familiarity and provides customers the arrogance to depend on its battle-tested protocol in no matter chain they select to run their enterprise. There are a number of methods to get APY as an Aave person. You possibly can deposit belongings and earn curiosity on loans from others; you may deposit your individual belongings and borrow a secondary asset, benefiting from aggressive rates of interest; or you may wager AAVE and earn rewards for serving to safe the protocol.
Fire
Solana is the most important non-EVM chain for DeFi and memecoin buying and selling and naturally has its personal protocols the place lending is on the market. The principle one is Fire, which lets you deposit or lend native Solana belongings together with USDC, SOL and JUP. APYs are additionally engaging and supply sufficient incentive for these with spare cryptocurrencies to park and earn a passive double-digit return.
Among the finest issues about Kamino is the vary of belongings it helps. Along with “blue chips”, Solana permits well-liked memecoins resembling WIF and BONK for use as collateral. This enables Solana customers to reap the rewards of the memecoin season whereas borrowing belongings that can be utilized for different functions, resembling mining liquidity – or just to purchase extra memecoins.
Compound
Compound is among the oldest and most trusted DeFi lending protocols. It at present has roughly $2.5 billion deposited into its decentralized protocol and is used to borrow roughly $900 million in belongings. Quite a lot of EVM chains are supported together with Polygon, Optimism, Base, Arbitrum and naturally Ethereum. ETH and USDC could be borrowed and APRs are engaging.
Among the finest issues about Compound is that it has been built-in with many third celebration platforms together with OKX, Binance and Crypto.com. Consequently, customers of centralized crypto companies can reap the rewards of Compound's environment friendly and extremely safe cryptocurrency lending protocol. Governance is dealt with by COMP holders who can suggest and vote on protocol upgrades.
YouHodler
YouHodler is a centralized platform that intersects with DeFi, whose lend-lease formulation impressed its personal service. Designed to advertise a hodl mentality, YouHodler incentivizes customers to keep away from promoting their cryptocurrencies the place attainable and as an alternative borrow in opposition to them – a method that may show worthwhile in a bull market. Some of the helpful issues about YouHodler is the massive variety of cryptocurrencies to borrow in opposition to: something within the high 50 by market capitalization is accepted.
YouHodler additionally has different distinctive options that make this CeDeFi platform price contemplating. In addition to its supply of a market-beating 97% loan-to-value ratio. Or the truth that borrowed belongings could be transformed to fiat and withdrawn right into a checking account. Should you don't need to promote your crypto however need to purchase a home or repair a automotive, YouHodler is an efficient alternative.
If you wish to borrow in opposition to your long-term crypto belongings, you need to select a trusted lending platform and keep a wholesome collateral ratio that may show you how to make your digital belongings be just right for you.
