Have crypto but don’t want to sell it Need cash Crypto loans are the solution.

Many people have probably encountered this problem: holding cryptocurrencies at a value lower than the purchase price. Selling them would result in a loss, but the money is still needed. These days, there’s a simple solution: simply use your crypto as collateral for a loan, and you can easily get the money you need.

What is a crypto loans?

Crypto Lending / Crypto Loan is the process of using your cryptocurrencies as collateral to borrow money in the form of stablecoins (e.g. USDT, USDC, DAI) or fiat currencies (e.g. USD, EUR, THB) without having to sell your crypto holdings.

Example: Use crypto as collateral → Get money to use → Once the debt is repaid, get crypto back.

Key Features of Crypto Loans

1. Collateralized Loan
   Cryptocurrencies such as BTC, ETH, USDT, USDC, AVC must be deposited to the platform.
   Usually, you have to put down more than the loan amount (Over-collateralized), for example, if you deposit 1 BTC worth $60,000, you may only be able to borrow $30,000 (LTV = 50%).
2. Borrowed Asset
   Usually received as a stablecoin (USDT, USDC, DAI)
   Some CeFi platforms offer direct fiat lending.
3. Interest Rate
   There are both fixed and variable types according to the market.
   Rates depend on supply–demand and platform.
4. Repayment
   Must repay principal + interest
   When the night is complete, you will receive the crypto that was pledged back.
5. Liquidation risk
   If the price of the collateralized crypto falls → LTV ratio exceeds the threshold
   The system will sell collateral to be used to pay off debt immediately.

Why do people use crypto loans?

• Don’t want to sell crypto (HODL) but need cash?
• Use your investment funds, such as trading in borrowed stablecoins or using Yield Farming.
• Access funding sources worldwide without relying on banks.

Detailed example

• You have 1 BTC worth 10,000 USD
• Deposit as collateral on the platform with a 50% LTV requirement.
• You can borrow up to 5,000 USD (or 5,000 USDT).
• Interest must be paid, such as 8% per year.
• Once you repay the principal + interest, you will get your BTC back.

In short crypto loans: Borrowing with crypto is using your crypto as collateral to borrow stablecoins or fiat money without having to sell your crypto.

Who are the Crypto loans providers?

Crypto Loans providers include both CeFi (Centralized Finance) managed by companies and DeFi (Decentralized Finance) that work with smart contracts.

Top 3 Trusted CeFi (Centralized) Providers

A platform with a central organization that manages loans and takes care of collateral.

No1. Binance Loans

Binance Loans is a crypto lending service that allows you to borrow digital assets you hold on Binance as collateral, which can then be exchanged for another cryptocurrency you want to use, without having to sell your existing holdings.

Simply put → put crypto as collateral → get other coins you want to use → when you repay the debt, you get the collateral back.

Highlights of Binance Loans

1. Easy to use in the Binance app, no need to transfer tokens.
2. Supports a wide range of assets on both the borrowing and collateral side.
3. Binance VIP & Institutional Loans available for large clients
4. Flexible Rate service with interest rates that fluctuate according to the market
5. Some products offer the option to “Staking Collateral” → meaning that you can hold crypto and still earn staking interest at the same time.

Binance Loans Risk

1. If the crypto market drops sharply, you may be subject to liquidation and lose some of your collateral.
2. It is CeFi → Users must trust Binance to hold their assets.
3. Variable interest rates may be high if there is high demand for the loan at that time.

Binance Loans in Brief

Binance Loans is a crypto lending service from Binance that allows users to borrow stablecoins or other cryptocurrencies using their holdings as collateral. It’s ideal for those looking to raise cash without having to sell their crypto.

No2. Nexo

Nexo, one of the world’s largest and most reputable Crypto Loans providers.

Nexo is a crypto-finance CeFi (Centralized Finance) platform founded in 2018 and headquartered in Switzerland, offering both

• Crypto Loans
• Earning Interest on Crypto Deposits (Earn on Crypto)
• Crypto credit/debit cards
• Crypto Exchange Trading

Nexo’s goal is to make crypto a practical asset for everyday use, like using a digital bank account.

Highlights of Nexo

1. Instant Loan without credit check
2. Supports over 60+ assets
3. Get both fiat and stablecoins.
4. Lowest interest rate 0% – 13.9% per annum (depending on Loyalty Tier and collateral)
5. There is a Nexo Card that can be used as collateral and swiped like a credit card.
6. It has $375 million in system asset insurance to cover hacking or theft.

Nexo risks you should know

1. If the price needs to fall significantly, liquidation may be required, losing the coin.
2. As a CeFi, users must trust Nexo to hold their assets.
3. We have had issues with regulatory bodies in some countries (e.g. US SEC) regarding the Earn product.

Nexo in Brief

Nexo is a CeFi platform that offers fast and convenient crypto loans. It supports both stablecoins and fiat currencies, offers additional services such as crypto cards, and offers flexible interest rates. It’s ideal for those who don’t want to sell crypto but need cash to fund their investments.

No3. YouHodler

YouHodler, a prominent crypto loan provider in the CeFi space.

YouHodler is a CeFi (Centralized Finance) platform founded in 2018 in Switzerland, offering a variety of crypto-based financial services, including:

• Crypto Loans
• Crypto Savings Account
• Crypto Exchange Trading
• Turbocharge Loans and Multi HODL features for investors who want to use leverage.

The name “YouHodler” comes from the term HODL, which is used by industry insiders to mean “long-term crypto holder.”

Highlights of YouHolder

1. LTV up to 97% → Get a higher loan amount than most CeFi
2. Supports both Fiat and Stablecoins
3. There is a Turbocharge Loan feature → Take the loan money and use it to buy more crypto and use it as collateral automatically (similar to leverage).
4. Multi HODL Feature → Use crypto to trade and increase returns.
5. User-friendly interface, suitable for beginners

YouHolder Risks and Precautions

1. High LTV → Easy risk of liquidation if the market falls
2. It is CeFi → Users must trust the platform to hold their assets.
3. There is no worldwide license for all countries (users should check the laws in their own country first).

YouHolder in Brief

YouHodler is a CeFi platform that stands out with its high LTV ratio (up to 97%) and additional features like Turbocharge and Multi HODL. It’s ideal for those looking to leverage cryptocurrencies for liquidity without selling their coins, but it comes with the risk of a sharp market crash.

Top 3 Trusted Decentralized DeFi (DeFi) providers

Computer work structure through automatic Smart Contract without intermediaries.

No1. Aave

The world’s largest and most important DeFi (Decentralized Finance) lending platform, Aave is a Decentralized Finance (DeFi) protocol that was first launched in 2017 (originally named ETHLend) and rebranded as Aave in 2020. The word Aave is Finnish for “ghost/spirit”.

Aave is a decentralized lending marketplace that allows users to:

• Deposit coins to earn interest (Lenders)
• Borrow coins using crypto as collateral (Borrowers)

All are automated via Smart Contracts on Ethereum and other chains such as Polygon, Avalanche, Arbitrum, Optimism.

Highlights of Aave

1. It is the largest DeFi protocol in the lending space (TVL in the tens of billions of dollars).
2. Transparent, verifiable, on-chain, no intermediaries
3. Support multiple chains and coins (e.g. ETH, WBTC, USDT, USDC, DAI, etc.)
4. There is Flash Loan, which is a new innovation in the DeFi industry.
5. Use AAVE token for governance (Governance Token)

Aave Risks

1. Crypto price volatility → Risk of liquidation
2. Risk of Smart Contract Bugs or Attacks (Even though Aave has passed multiple audits)
3. Regulation is a concern because DeFi is still in a grey area.

Aave in Brief

Aave is the largest decentralized lending DeFi protocol. Users can deposit crypto to earn interest or borrow crypto using their assets as collateral. Aave’s key strengths include transparency, multi-chain support, and a unique Flash Loan feature.

No2. Compound

Compound is another DeFi protocol that is considered a major competitor to Aave in the crypto lending market.

Compound is a DeFi (Decentralized Finance) protocol launched in 2018 by San Francisco-based Compound Labs.

Its main function is to act as a decentralized lending market where users can:

• Deposit Crypto → Earn Interest
• Crypto Loan → Using other crypto as collateral

All work through Smart Contracts on the Ethereum blockchain.

Highlights of Compound

1. Pioneered one of the first DeFi lending platforms on Ethereum.
2. cTokens system with automatic compound interest
3. Easy to use, not complicated (suitable for DeFi beginners)
4. Transparent, auditable on-chain
5. COMP tokens are used for governance purposes.

Compound Risk

1. Crypto price volatility → Risk of liquidation
2. Smart Contract Bug or Attack (Even After Audit)
3. Regulatory uncertainty
4. Governance concentration (some hold a lot of COMP, which may control voting)

Compound in Brief

Compound was one of the first DeFi lending protocols to fuel the crypto lending boom. It stands out for its simplicity, using cTokens to accumulate interest, and using the COMP token for governance.

No3. MakerDAO (DAI / Sky)

MakerDAO (MakerDao), considered the oldest and most important crypto lending protocol in the DeFi world.

• MakerDAO is a DeFi protocol running on the Ethereum blockchain.
• Launched in 2015 by Rune Christensen and the Maker community.
• Its main feature is that it is the creator of DAI Stablecoin, a decentralized stablecoin pegged to approximately $1.

Highlights of MakerDAO

1. Pioneering decentralized stablecoins (DAI)
2. 100% transparent on Ethereum → Auditable
3. Supports various collaterals (ETH, WBTC, USDC, LINK, MATIC, etc.)
4. Governance is provided through MKR Token (Governance Token).
5. Can be used for borrowing, depositing, and creating stablecoins.

MakerDAO Risks

1. Collateral price volatility (e.g. ETH falls sharply, may be liquidated)
2. Regulatory Risk → Stablecoins may face scrutiny from regulators.
3. Smart Contract Risk (Even though MakerDAO has been audited and has a good reputation for a long time)
4. Reliance on centralized stablecoins such as USDC (parts of DAI are backed by USDC via PSM – Peg Stability Module)

MakerDAO in Brief

MakerDAO is a DeFi protocol that creates stablecoins (DAI) using over-collateralized crypto collateral and is managed by the community through the MKR token. It is the heart of the DeFi world and a pillar of the crypto lending market.

Reference: Verster Community

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