Hi, my name is James , I represent the website https://youhodler.review/ , here is the best overview of cryptocurrency lending.
So when did cryptocurrency lending come about? Well, it was right around the time when the economy came to an abrupt halt in 2020 because of the pandemic. This led to a drop in interest rates and a sharp drop in lending. Many people were looking for other ways to make their assets work for them. Cryptocurrencies became a quick and easy way to access fiat currencies almost instantly without selling them. In the blink of an eye, the days of bitcoins and Litecoin idly gathering dust on an exchange or in a cold wallet were over.
Unlike personal loans or credit cards, secured loans are much safer for the lender, allowing the borrower to take advantage of low interest rates.
Cryptocurrencies can be very volatile, so these loans are almost always highly collateralized. This provides insurance for the lender in case the price of the cryptocurrency drops drastically. However, this can have negative consequences for the borrower, especially if the platform they are using requires them to maintain a constant collateral ratio (LTV).