Beyond another buzzword associated with cryptocurrency, DeFi is a novel and developing financial technology that utilizes secured distributed ledgers. It leverages blockchain technology to create decentralized financial services. DeFi (Decentralized Finance) covers various financial services such as earning interest, borrowing, lending, buying insurance, trading derivatives, trading assets, and more. Some argue that DeFi is a threat to banks since DeFi eliminates the need for intermediaries. DeFi is a secure, direct (peer-to-peer) financial platform. Without the middleman (banks), DeFi is also faster and has fewer fees. Most DeFi platforms run on Ethereum. Today, we are considering the best DeFi lending platforms.
Best DeFi lending platforms in 2024
Also Read; DeFi Lending and Borrowing 2024 – A Complete Guide
1. Aave
Previously known as ETHlend, Aave is an Ethereum-powered peer-to-peer platform that facilitates loan terms based on smart contracts. The Swiss-based tech company launched its platform in 2017. Although Aave is not exclusive to DeFi lending, it is a great place to receive and give loans. You can get various loans and lending facilities, including uncollateralized loans, rate switching, flash loan, and unique collateral types. It uses a dual DeFi token model: aTokn and LEND. Lenders receive interest from AAVE Token, an ERC-20 token, and LEND as its governance token. It is arguably the most popular DeFi landing platform and has one of the highest total value locked figures of $12,670,000,000.
2. Maker
MakerDAO, otherwise called Multi-Collateral Dai (MCD) system, is one of the most credible DeFi lending and borrowing platforms. The company was founded in 2014, and its stablecoin DAI was launched in 2017 by Danish entrepreneur Rune Christensen. It was created to bypass the volatility of the cryptocurrency market. The aim is to use DAI to maintain the same value as the dollar. Users can create a Collateralized Debt Position (CDP) with Ethereum or other Ethereum assets as collateral to receive DAI. The debt is tied to a Collateralized Ethereum or other Ethereum that is locked up. Interest payments are received in MKR tokens. The DAI and MKR paid are extinguished when the CPD is closed out. With smart contracts, Maker offers people a secure borrowing and lending platform. The total value locked at $18,159,000,000
3. YouHodler
YouHolder has a great reputation as one of the best DeFi lending platforms. Another Swiss-based company on this list, YouHodler, focuses mainly on Crypto backed loans. However, you can earn 12% on a YouHodler savings account without lending your crypto assets. YouHodler also accepts loans on any of the top 50 cryptocurrencies on the market. It offers the industry’s highest loan-to-value ratio (LTV) at 90% LTV. You can select from a flexible range of payback terms between 30 to 365 days. YouHodler has a unique security feature, a 3-factor authentication that allows owners with accounts over $100,000 (or its equivalence) to disable withdrawal options. Only a personal verification of identity can enable withdrawal afterward.
4. Compound Finance
Compound Finance is an Ethereum-based open source that facilitates lending and borrowing. The California-based company is famous in the industry for its inventive DeFi model and community-governed Decentralised Autonomous Organisation (DAO). Unlike most DeFi platforms, Compound allows users to trade crypto assets they have locked on the platform. This is achieved through tokenization. Compound supports a wide range of ETH-based assets, including BAT, DAI, SAI, ETH, REP, USDC, WBTC, USDT, and ZRX.
Also Read; The Ultimate Guide to Defi Staking
5. Crypto.com
Although Crypto.com is not an exclusively DeFi lending platform, it still offers the services of borrowing and lending crypto assets. The main feature in favor of crypto.com is that it is a one-stop shop for all cryptocurrency-related transactions. This means you can transact your DeFi business as you perform your other crypto business. Founded in 2006, Crypto has been around for a long time and can be seen as more reliable than some new companies. There are no limits to the lending rate to the lender and borrower on the platform.
