DeFi lending and borrowing platform allow people to lend and borrow funds from others in a trust-less way without third-party. The lending and borrowing platforms has been around since 2018 when a network of 15 Ethereum based project came together to build a decentralized finance application. In this articles, we’ll take a look at the top DeFi Lending and Borrowing platforms.
What is Lending and Borrowing
Lending means giving out your funds to other users and earn interest in return while Borrowing means taking a loan from lenders using cryptocurrencies as collateral to secure the loan.
In DeFi lending and borrowing, investors and lenders issues a loan or deposit fiat in the decentralized protocol why in return earn interest . In DeFi borrowing, a borrower take loan from lender or investors using their crypto as collateral which act as securities in absence of repayment of the loan.
The crypto loan are carried out on decentralized marketplace where lenders and borrowers can interact directly with each other without the presence of any third-party.
Why should I use lending platforms?
- DeFi platform don’t need central authority for you to use it
- DeFi lending provides user opportunity to hold crypto for a long period time and earn interest in return.
- In DeFi, Investors are offer the opportunity to deposit crypto for fiat currency without selling it off.
- DeFi allows users to lend or borrow in a completely decentralized way.
- Users have complete control over their funds at all times.
Top DeFi lending and borrowing platforms
Lending and borrowing can be facilitated via – a centralized finance institution, such as BlockFi, Celsius, etc., or through the use of a decentralized finance. However, there are several Decentralized lending and borrowing platforms. Below are the top DeFi lending and borrowing platforms.
Compound is a popular DeFi blockchain – based protocol, built on Ethereum and allows traders or investors to lend and borrow crypto – and have a say in its governance with i native token – COMP.
COMP tokens are mainly used for protocol governance. Holders can suggest, debate, and delegate voting rights without. COMP is an ERC-20 token.
Anyone with an internet and connect with a DEX wallet, such as Safepal or Metamask wallet can earn interest on compound.
To supply or lend crypto assets on compound, you will have to deposit cryptocurrency into the compound protocol.
Once you have make the deposit, you will receive cToken in return. You will start accruing interest by holding the cToken.
Lenders can deposit given amounts and earn interest. The platform allows lenders and borrower to lock their crypto assets into the protocol.
Once assets are supplied to compound, you are allowed to use the assets as collateral – based on the collateral factor of the assets deposited. You can start borrowing from compound. You can never borrow more than what you collateralize.
Venus is a DeFi marketplace for Lenders and Borrowers to interact directly without third-party involvement. The platform allows you to deposit cryptos to generates interest, as well as to take loan secured by collateral.
Venus finance allows users to deposit cryptocurrencies as collateral and earn interest. while earning interest, you can borrow other cryptocurrencies to maximize your earnings.
Venus support 16 cryptocurrencies, including stable coins like BUSD and has two tokens on the platform, XVS and VAI.
The XVS token is the governance token of Venus and allows its holders to vote and make decisions. while, VAI token is the stablecoin token of the Venus ecosystem and is based by a basket of stablecoins and crypto assets without centralized control. Venus DeFi is built on Binance Smart Chain by swipe – a crypto wallet and debit card company.
InstaDApp is a DeFi multi-purpose platform with varieties of decentralized services, such as lending, borrowing, leveraging and swapping. The platform is built on top of popular DeFi platforms like Uniswap, MakerDAO, Compound finance, etc. for managing assets.
InstaDApp offers users easy access to switch to cheaper lending platforms with lower interest rates and perform complex actions like leveraging or saving by buying or selling collateral in a single transaction. You can access all it features on the InstaDApp’s dashboard.
MakerDAO is a decentralized protocol built on Ethereum blockchain that enable users who have ETH and DEX wallet, such as Metamask to lend crypto assets.The platform employ a two token system, Dai and MKR.
Dai is a collateral-backed stablecoin that offers stability. MKR is a a governance token that is used by stakeholders to maintain the system and mange Dai.
The DeFi platform offers users a decentralized finance by creating an inclusive platform for economy empowerment; enabling everyone with equal access o the global financial marketplace.
Maker also has a feature called the Dai Savings Rate (DSR). DAI holders can lock their DAI into maker’s DSR contract and earn a variable interest rate in DAI, which is generated from stability fees.
Aave is an Ethereum based decentralized lending platform in the DeFi market.The DeFi lending platform support many assets including Ethereum (ETH), Dai (DAI), Aave (LEND), Decentraland (MANA) and Basic Attention (BAT) etc.
The DeFi platform offers varieties of loans and lending services, such as uncollateralized loan, “rate switching”, flash loan, and unique collateral types.
Aave’s P2P network assure users to lend and borrow loans on an agree terms and condition. Users do not have to gain trust from any person or central authority to handle their funds.
Yearn.finance is a decentralized aggregator platform with services like borrowing, lending and yield farming.
The Yearn.finance protocol, it automatically switch between lending platforms and removes central authority involvement. The platform mostly uses code to offer it service to removes third-party.
Krystal Lending (KyberSwap)
Krystal is a one-stop platform which provides you an easy way to efficiently access all your favorite DeFi services. You can use Krystal on both mobile app and desktop. Krystal support Ethereum and Binance Smart Chain (BSC), so you can transact any way comfortable for you.
Krystal has integrated multiple DEX protocols (Kyber Network,Uniswap and PanacakeSwap)
The platform also integrate lending platforms for you to deposit crypto to earn interest, track your wallet balance and manage your portfolio.