Crypto lending is becoming big business
So I have been reading up on the trend. There are more and more projects out there that are starting to give interest on cryptocurrencies. And not just a "token amount" but real tangible ROI.
If we look at the interest rates overall in Europe it is a sad picture.
I have written before about the Fire movement inspired by @connecteconomy and this is something that fits into that picture.
So if there are companies like Nexo that are offering 6.5% interest rates on stable coins that is amazing news.
But now there are players like the Celsius network who are not only providing interest on the stable coins but also on the cryptocurrencies themselves. So if you are a Hodler at heart this is a way to gain some extra income on your coins risk free.
The Celsius is an Ethereum ERC20 based platform. that provides different types of financial tools that help network members in lending, borrowing, and depositing different crypto assets.
They created the CEL token to functions in a peer-to-peer platform that will help to eliminate the need for the financial middlemen like as banks and exchanges with coin holders who will earn rewards for lending.
Currently you get paid in the token you deposited and the interests vary from coin to coin.
Now we do know there is this famous saying:
not your keys not your crypto.
And it is true that in these cases you do not have the keys to your crypto anymore. They are stored in the wallets of BitGo (BitGo wallets are the leading institutional-grade wallet for digital assets and are used by hundreds of exchanges and institutional investors around the world.)
But it seems to me that they are doing their utmost to secure the tokens and on top of that are insured up to 100 million dollars in case of hacks or theft.
So I took the leap and downloaded the app and deposited a bit of Ripple I still had "laying around"
This all arrived safely and is now quietly chugging along, gaining value and getting 3.25% interest.
I might put in more as time passes and split it over Nexo and Celsius to split the risk but having my money sitting in my saving account losing value to inflation and 0% interest is not something I want to have happen for now. And if I can get a bit more on my crypto holdings that is even better.
Interesting. I love all these new tools to earn interest on our money again!
I’m wondering if there are already non-custodial services who let you keep your private keys.
I guess there’s only masternode shares and staking rewards til now. But actually that’s the same thing, right? Bottom line is that you earn rewards for saving your money.
Do you know where the “interest” with Nexo and Celcius comes from? How do they generate it? It must also be from staking rewards, right?
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they lend it out to institutions and individutals in an overleveraged position of 120% minimum and charge 2% more interest for that then they pay out. I would not be surprised that part of the revenue also comes from staking. except from the staking they do the same as banks but by taking a LOT less commission
Not having the keys is a slippery slope with a lot in the way of risk.
It'd be more interesting to see a multi-sig situation with a smart contract behind the scenes pulling/distributing in an approved fashion.
I know they have to use multisig keys to assure that the company cannot run of with the money and do an exit scam so that is at least one worry less.
How secure it is to held cryptocurrency with them, I have some XRP sit on trust wallet and some for trade.
I put it in and it seems to work and you can easily pull it back out as well...
As far as I can research them your xrp should be safe but there is always a risk right?
even when you put your money in the bank
So that nexo, can I really lend steem there also and if yes, how can I do that. Also what are the requirement
you cannot lend steem but you can lend bitcoin and then buy steem with that...
you just have to put up some collateral and the more you put up the more you can lend
Okay. Thanks for the explanation
np, anytime
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I've bookmarked this as I might come back to it...it's the kind of thing that would normally appeal to me, so I might give it a go.
That line though: 'not your keys, not your crypto', that's off-putting - given that I should really do more about getting some of my crypto off the exchanges first!
well, if you have them on an exchange you might as well put them on celsius.
but if not, get yourself a hard wallet at least.
here is the link from my site if you do want to get one
https://cryptogoodies.com/hardware-wallets-keep-cryptocurrency-safe/