While most cryptocurrency investors still just buy and hold a coin, many are looking for ways to make their coins work harder for them. After-all if cryptocurrency is supposed to be our new money or an investment what’s the use in money that doesn’t work for you?
Many people opt to go with trading to make their coins work harder for them, but even at this point this isn’t the ideal solution. Trading can be quite challenging and has the potential to lose you money if you aren’t exceptional at it, not to mention it also takes time, and time is money.
However, there are more options like lending where you can earn interest on your coins. Staking and Lending (when you can’t stake) works best when it comes earning passive income on cryptocurrencies because essentially you are giving someone, generally a large institution, a loan and they are paying you with interest.
You may say hey wait there a loan? Isn’t that risky? Well yes, normally lending money to people, strangers, and big companies IS risky. But the loans given in Decentralized finance and through centralized lending platforms are collateralized, meaning they have put up assets, such as stocks or their business, as collateral that can be sold to pay their debts. This makes it very low-risk in general.
In this article, we will discuss the best crypto lending platforms of 2023
Kraken is an online exchange that has a staking feature for certain cryptocurrencies that allow for staking, namely ethereum, Polkodot, cosmos, cardano, and a handful of others, and give you a guaranteed yield/return on your coins.
They’ve never been hacked and are highly regulated and trusted amongst the cryptocurrency community, so they’re definitely a good option.
You can also stake on your own private wallet and earn similar yield, and yes that’d be a bit safer if you have a hardware wallet, but we’d say it’s generally not worth the effort and risk if you aren’t already using a hardware wallet and know how to properly keep your staking accounts and private key safe.
2. Coinbase Earn
Coinbase is the go-to exchange for most people and a lot of people use their platform for trading. Well you can also earn interest on your coins here with their own staking feature called Coinbase Earn. Here you earn an interest rate based on what coin you choose, but first you have to get KYC verified to be able to use the program.
Ultimately we don’t really like Coinbase’s earn program as they simply offer some of the worst yields, but hey at least they pay something on certain cryptocurrencies. They used to pay nothing in terms of interest, but now it’s at least something.
Aave is a Decentralized Crypto-Lending Platform, meaning it doesn’t have any servers or central servers that keep you stored money, instead it’s storaged directly on the blockchain in a smart-contract. You can earn interest on your wallet through their platform, but as it’s the safest way to earn yield on crypto that is not able to be staked it doesn’t offer particularly high returns.
There are no minimum deposits and you don’t need to submit any KYC to use the service, as there’s no central party to hold accountable. All you need is your private ethereum wallet, some ethereum for gas fees, and some crypto tokens to lend out.
4. Celsius Network
Celsius is a centralized crypto-lending platform, meaning it does have central servers that keep you stored money and there’s a company behind it all with people to hold accountable if things go wrong for some reason.
You can earn interest on your wallet through their platform and are given weekly payouts for what your crypto has earned for you via lending. There are no minimum deposits, but Celsius does require KYC to use the service.
Being a centralized lending platform Celsius does offer something most of these platforms don’t, and that’s promo codes you can use when signing up that give you a bonus. This is something the decentralized platforms simply can’t do, as there’s no company behind it all to pay out.
5. Compound Finance
Compound Finance is a decentralized lending platform that allows you to earn interest on your crypto holdings and pays interest daily. There’s no minimum deposits and you don’t need to submit some KYC before you can use the service. Compound Finance is very similar to Aave in functionality and also uses smart contracts to hold your staked assets and pay out yield.
Ultimately we prefer Aave as usually the yields are slightly better for some reason, when lending out your cryptocurrency (not when borrowing).
The most important thing is to start making your money work harder for you, instead of just holding it and hoping it goes up in value, speculating, you should pick a platform and stick to it, as over the years the interest really piles up.
To start earning interest on your coins select a good crypto lending platform, the above is merely a guide for you to use to give you some ideas on which platform you may want to use, but ultimately you’ll need to do some of your own research to decide which platform is best for you. What are you waiting for? Start making your money work harder for you already, get earning!