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New study promises huge growth: crypto lending crowned as the most profitable sector in the industry

New study promises huge growth: crypto lending crowned as the most profitable sector in the industry


Borrowing crypto assets is one of the most explosive parts of the cryptocurrency industry. Since the market downturn in December 2017, the lending platforms have experienced tremendous growth.

DeFi has taken the ether world by storm

Crypto asset lending is a part of the crypto market that has seen decent growth in recent years. First, the crypto lending industry started with centralized lending services such as Celsius Network and Block-Fi, which garnered attention from their first success. To date, the Celsius Network reports over $ 4 billion in loans.

However, the hype and attention given to decentralized funding (DeFi) and the growth of several major credit platforms under the DeFi umbrella of the Ethereum blockchain has recently shed much more light on one of the crypto industry’s best-kept secrets.

DeFi’s success can be attributed to a number of different reasons, but the record-breaking low interest rates for savers in traditional banks and financial institutions have been an important factor.

Messari study shows DeFi’s success

While the emerging DeFi credit sector is still growing, there are several DeFi platforms that have already invested over $ 10 million in ether. Maker, Nexo, Ripio Credit Network, Aave and Cred have achieved an average return of up to 15% in the past 90 days, and last year the average return was 75%. 

Only Bitcoin has had a higher annual return. There were 349 different tokens that were examined using the same list of criteria.

Crypto lending is ready for explosive growth

With the remarkable success of Celsius Network and Block-Fi as well as the success of DeFi credit platforms like Maker DAO, Compound and Dharma, lenders and borrowers now have a wealth of new options.

With DeFi you can, for example, deposit your own ether as security and borrow money yourself through a smart contract on a platform like Maker. These loans are usually over-collateralized, e.g. you would need to launch $ 150 worth of ether to get a $ 100 loan from DAI. But for a non-banker who doesn’t have the means to finance through traditional channels, this kind of compromise can be worthwhile.

This type of DeFi loan is extremely popular, and platforms like Maker and Compound top the list on websites like DeFi Pulse, which provide data about DeFi projects.

DeFi is not yet perfect – but offers without over-secured loans and with better collection techniques are already being developed.

Ethereum is not the only blockchain that pursues DeFi alternatives to traditional funding models. Projects such as the BTCPay server, the Lightning Network and Bisq DAO also run on Bitcoin, and competing smart contract platforms such as Tron and EOS also pursue DeFi and decentralized applications as solutions.

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