Decentralized Finance (DeFi) lending has emerged as a popular means to borrow and lend crypto assets. While it works like traditional lending, centralized actors have replaced decentralized ones. Instead of cash, you lend/borrow digital assets, and in place of banks, you find Defi apps doing the job. Since the advent of this concept, the practice of lending and borrowing digital assets has experienced significant growth.
It has enabled individuals and commercial entities to enhance their scope of crypto usage. It has added more prospects to blockchain and made its adaption easier too. Furthermore, it has garnered a great response from investors and markets. According to a report, the DeFi protocols have received a global investment worth $20.45 billion.
And with its increasing adoption, the role of DeFi lending platforms has become pivotal. So lets us go through a listicle of the five most prominent DeFi lending platforms.
DeFi lending platforms that help you earn more
1. dYdX
This platform makes lending and borrowing more seamless with 125% Max loan-to-value collateral and Ethereum blockchain. It brings in a trustless environment along with a range of features like spot trading and margin trading.
Created in 2018, its structure deploys smart contracts to facilitate transactions. One of its distinct features is that it uses Oracles, an aggregator for third-party data feeds. It helps in relaying the external data to the platform’s smart contracts. In addition to that, it offers an array of financial products you cannot access on traditional platforms.
2. Aave
Supporting Ethereum, Arbitrum, and 5 other chains, this one makes lending very adaptable. It also comes with an 80% max loan-to-value and the collateral of 11 cryptos. It works on a non-custodial and open-source liquidity protocol. Based on the demand and supply, its embedded algorithm adjusts the interest rate in the liquidity pool automatically. Aave has given some of the best yields and remains a primary player in the DeFi lending market.
3. Compound
The Ethereum-backing protocol allows you to submit 12 cryptos as collateral. It lets you borrow 16 cryptos and have an 83% max loan-to-value. Moreover, it is used for open financial applications and has an autonomous interest rate protocol. Being one of the leading platforms, it allows users to earn a passive income with borrowing and interest. Also, it keeps adding new upgrades and assets to the platform and gives holders the right to vote.
4. MakerDAO
A range of features makes this DeFi lending platform very adaptable. It supports the Ethereum blockchain, collateral of 15 cryptos, and 66% max loan to value. Most notably, it offers only DAI tokens, a stablecoin for borrowing. Also, it is an open vault that anyone can use and participate in operations earning. It is done with governance fees, another form of interest rate in this network. The protocol helps you mint the Marker’s native token, MKR.
5. Yearn Finance
Being a yield aggregator, Yearn Finance offers a solid collateral profile with no max loan-to-value. Also, supporting the Ethereum blockchain, this platform allows users to do yield farming with lending and borrowing. Also, its YFI token has acquired a high valuation in the market. The platform boasts different independent products that help you achieve so many purposes. It gives investment strategies, has interest rates on lending protocols, and allows users to identify the highest interest rates while saving users’ labor and cost.
Conclusion
DeFi lending is not a novel concept anymore. It has become popular among the crypto community due to its merits It introduces the digital assets users with a whole new ecosystem. Besides, running on smart contracts provides due security and ample opportunities for earning. With this activity, crypto users get too much more than they can. They get to do a lot with their assets and get profitable returns too. All this becomes possible with these high-end DeFi lending platforms that come with a barrage of crafty features.
