In the world of cryptocurrency, lending, borrowing, providing liquidity, and yield farming are common strategies for generating passive income. Holding mainstream currencies like USDT and BTC, the investment returns you get can vary by 10 to 100 times depending on where you choose to deposit your assets—be it on exchanges, in CeFi, or DeFi projects.
With so many DeFi and CeFi options available, how can you quickly find the best strategy for the currencies you hold?
Tools like DeFi Rate provide real-time updates on the lending and borrowing rates for various tokens across different CeFi and DeFi platforms. This allows you to compare and choose the most profitable options effortlessly.
Recommended Stablecoin Lending Rates (DAI, USDT, USDC, BUSD)
Here’s a comparison of annual percentage yields (APY) for popular stablecoins:
| Platform | DAI | USDC | USDT | BUSD |
|---|---|---|---|---|
| Celsius | 4.6% | 8.5% | 8.5% | 8.5% |
| BlockFi | 8.5% | 8.75% | 9.25% | 8.75% |
| Compound v2 | 2.35% | 1.94% | 2.03% | – |
| Aave | 2.55% | 1.99% | 2.11% | – |
| Fulcrum | 4.94% | 2.69% | 2.98% | – |
| Nexo | 8% | 8% | 8% | – |
Data updated as of February 2022. Source: DeFiRate
- Best USDT/USDC/DAI rates: BlockFi currently offers some of the highest yields.
- Celsius also provides competitive rates for USDC and USDT, at 8.5% APY.
Mainstream Crypto Lending Rates (BTC, ETH, BNB, LUNA, DOGE, ATOM, MATIC)
Compare lending returns for major cryptocurrencies:
| Platform | BTC | ETH | BNB | LUNA | DOGE | ATOM | MATIC |
|---|---|---|---|---|---|---|---|
| Celsius | 6.2% | 5.35% | 6.71% | 6.05% | 0.05% | – | 9.1% |
| BlockFi | 4.5% | 5% | – | – | – | – | – |
| Compound v2 | – | 0.07% | – | – | – | – | – |
| Nexo | 5% | 5% | 5% | – | – | – | – |
Data updated as of February 2022. Source: DeFiRate
- Celsius supports a wide range of tokens with attractive interest plans.
- For long-term BTC and ETH holdings, consider BlockFi or Celsius for steady returns.
Earning Passive Income Through Interest Rate Arbitrage
If the borrowing rate for Bitcoin is 0.2% and the lending rate is 5%, a simple strategy is to borrow BTC at the lower rate and lend it out at the higher rate. This allows you to earn a spread of 4.8% with minimal risk. This type of arbitrage is common and feasible in the crypto space.
By comparing borrowing and lending rates for different currencies, you can identify the most profitable passive income strategies.
Stablecoin Borrowing Rates (DAI, USDT, USDC, BUSD)
Here’s what it costs to borrow stablecoins:
| Platform | DAI | USDC | USDT | BUSD |
|---|---|---|---|---|
| Celsius | 1% | 1% | 1% | 1% |
| Compound v2 | 4.03% | 3.5% | 3.58% | – |
| Aave | 3.75% | 3.1% | 3.17% | 1.45% |
| Fulcrum | 19% | 19% | 19% | – |
| Nexo | -2% | -2% | -2% | – |
Data updated as of February 2022. Source: DeFiRate
- Stablecoin strategy: Borrow stablecoins from Celsius or Nexo and lend them on BlockFi or Celsius to earn approximately 6–7% APY.
Mainstream Crypto Borrowing Rates (BTC, ETH, BNB, LUNA, MATIC)
Costs for borrowing major cryptocurrencies:
| Platform | BTC | ETH | BNB | LUNA | MATIC |
|---|---|---|---|---|---|
| Celsius | 1% | 1% | 1% | 1% | 1% |
| Compound v2 | – | 2.7% | – | – | – |
| Aave | – | 0.12% | – | – | – |
| Fulcrum | – | 6% | – | – | – |
| Nexo | -2% | -2% | -2% | – | – |
Data updated as of February 2022. Source: DeFiRate
- You can also use interest rate spreads with mainstream cryptocurrencies, but be cautious of price volatility. You might earn on the interest spread but lose due to market price changes.
For the most up-to-date rates, you can always check platforms like DeFi Rate.
To maximize returns, it’s essential to use reliable data sources and tools. 👉 Compare real-time lending rates here
Frequently Asked Questions
What is the difference between CeFi and DeFi lending?
CeFi (Centralized Finance) platforms are operated by companies that manage your funds, often providing insurance and user support. DeFi (Decentralized Finance) uses smart contracts on blockchains, offering more transparency but requiring more technical knowledge.
How often do lending rates change?
Rates can change frequently based on market supply and demand. Some platforms adjust rates daily, while others do so in real-time. It’s important to use updated data when making decisions.
Is crypto lending safe?
While lending can generate passive income, it does involve risks such as platform insolvency, smart contract bugs (in DeFi), or market volatility. Always research platforms and consider spreading your assets across multiple services.
Can I lend any cryptocurrency?
Most platforms support major tokens like BTC, ETH, and stablecoins. However, less popular altcoins may not be available on all services. Check each platform’s supported assets list.
What is interest rate arbitrage?
This strategy involves borrowing cryptocurrencies at a low interest rate and lending them at a higher rate. The difference between the two rates represents your profit. This works best in stable markets or with stablecoins.
Do I need to lock my funds for a fixed period?
Some platforms offer flexible terms with no lock-up period, while others require fixed-term deposits for higher yields. Always check the terms before depositing.