Best Crypto Lending Rates 2024

Plus, a complete guide to lending crypto, including how and where to do it.
Published: April 9, 2023   |   Last Updated: July 6, 2024
Written By:
Eric Huffman
Eric Huffman
Staff Writer
Edited By:
Shannon Ullman
Shannon Ullman
Managing Editor

Key Takeaways

  • Crypto lending is great for passive income and can help build your portfolio as you earn interest (paid in the crypto you lend).
  • You have a choice between two types of crypto lending platforms – unless you live in the US, where you can only use decentralized lending platforms.
  • You can lend several types of crypto, but whatever you choose, the risk is the same: you’re not guaranteed a profit.

What is Crypto Lending, Exactly?

You know how normal loans work, right? A bank gives you a bunch of money so you can buy a thing—a house, a car, a dope new weight-lifting set—and then you promise to pay it back over time, with interest, to make it worth their while. Done right, it’s a win-win.

Crypto works much in the same way—with a key difference. A traditional loan comes from a centralized institution like a bank. A crypto loan comes from another person, like yourself. Instead of asking the Bank of Milkington for dough, borrowers ask people like you, who have some crypto sitting around.

But the dynamic is the same: They borrow, you lend.

So how do you find people who want to borrow your crypto? After all, part of what makes the traditional loan work is that borrowers go to an easy-to-find bank to request it. Enter the crypto lending platform (also called crypto lenders.)

Lending platforms connect you to borrowers. The structure is similar to a money market that pools lender deposits to supply borrowers.

They lend your crypto out on your behalf—the same way Airbnb finds renters for your finished detached garage—and pay you a little bit, called “yield,” for the trouble. Yield starts accruing immediately, paid according to your share of the lending pool.

Lending Crypto in 2023: Industry Insights

2022 proved to be a tumultuous year for crypto lenders. Several crypto lending platforms, including giants like Celsius and BlockFi entered Chapter 11 bankruptcy. However, the start of 2023 has seen a meaningful pivot to decentralized lending as many crypto holders grow reluctant to entrust centralized lending platforms. with their digital assets.

Lastly, a rising interest rate environment could boost crypto lending yields as rates parallel traditional finance products.

Pros and Cons of Lending Your Crypto


  • Earn money on your crypto in a different way than just riding the market
  • Earn money at better rates than you would with a traditional loan/bank
  • Start with as small an amount as you’d like
  • Any crypto owner can participate


  • If a platform goes under, so does your money—there’s no Federal Deposit Insurance (FDIC) to insure your funds
  • If there’s market volatility and you’ve lent out your crypto, your hands are tied
  • A borrower could default on all or part of the loan

Who Should Lend Crypto?

Crypto lending isn’t for everyone, but for some people, it could be a good fit.

  • People who want to earn interest on crypto. If you’re investing for the long haul, you can get paid to wait for future price appreciation.
  • People who can afford to wait. Lending crypto often comes with lock-up periods during which you can’t withdraw, use, or sell your crypto.
  • People who can ride out market volatility. Crypto prices swing dramatically sometimes, making stocks and other assets look like calm seas. When lending, you may have to weather the storm if your crypto is locked in loans.

How To Lend Crypto In 4 Steps

Step 1: Pick a Crypto Lending Platform.

A lending platform is the middleman you’ll need to find borrowers. Not sure how to choose a lending platform? Don’t worry; we’ll cover a few popular platforms and how to choose in just a bit.

Step 2: Connect Your Crypto Wallet To The Lending Platform.

Okay, so you sifted through the options and finally landed on the lending platform you’d like to use. Congrats! The platform needs access to your crypto in order to lend it out. You’ll need to connect your digital wallet—the place you store your crypto—to the lending exchange. The exchange will give you directions on how.

Step 3: Deposit Your Crypto.

Now it’s time to decide how much crypto (and which token) you want to lend. Three Ethereum? Half a Bitcoin? You decide. Then follow the platform’s instructions to move the crypto from your wallet (the one you connected in Step 2) to the lending platform.

Step 4: Start Earning Money On Your Crypto.

Sit back, relax, and watch that sweet, sweet cash come trickling in.

Which Crypto Can You Lend?

If someone wants to borrow a crypto, you can lend it. It’s that simple.

The more people want to borrow a token, the more likely it is someone is willing to lend it. (So if you stockpiled an obscure and “underrated” coin because you thought it would be “a thing,” and then it most definitely wasn’t, you might have trouble lending it out.)

DeFi protocols offer a wide range of tokens and stablecoins for lending. The list is ever growing, but note that there is more risk associated with lending and borrowing speculative tokens. Additionally, more volatile assets may have lower liquidity in their lending pools.

Where to Lend Crypto

Once you’ve determined that people want to borrow the crypto you have, it’s time to find a lending platform to help you do it.

Crypto lending is supported by dozens of different platforms. Each platform has different rules, crypto assets they support, and rewards. You’ll want to shop around to find a platform or protocol that aligns with your goals.

There are too many exchanges for us to list here, but we’ll give you a quick TL;DR on some of the more popular lending platforms.

Lending platforms fall into two categories: Centralized finance (CeFi) platforms or Decentralized finance (DeFi) platforms.

Note: If you’re in the US, you’ll want to skip ahead to DeFi platforms because securities regulations make most, if not all, CeFi lending platforms shy away from the USA. You can borrow against your own crypto in the US, but lending crypto to others on a centralized exchange is pretty much out of the question for now.

A centralized finance platform is run by an institution and people. CeFi platforms are similar to a bank. You give them your money, you follow their rules, and you have faith that your money will be there when you go to withdraw it. Centralized lending platforms can be easy for beginners to navigate because they look and feel similar to online banking and loan platforms. While no exchange is 100% secure, CeFi exchanges often offer security features that make them less likely to get hacked.

A decentralized finance platform is not run by people. Instead, it’s run by math and computer programs called “smart contracts.” A smart contract is a series of actions that occur when certain conditions are met.

For example, if a borrower wants to borrow stablecoin to buy a dairy farm, they can put up their more volatile crypto like Ethereum or Bitcoin as collateral.

The catch: The value of the collateral must be more than the loan itself and often several times higher depending on volatility.

A smart contract would be programmed to ensure that remains the case—so if the value of the collateral dips below, say, 1.25 times the value of the loan, the smart contract would sell some or all of the collateral to ensure the lender doesn’t lose any money.

In a way, a smart contract is kind of like a thermostat that’s programmed to heat a room (the action) once the temperature drops to a predefined number (the condition).

Best CeFi Crypto Lending Platforms

Regulations set by the Securities and Exchange Commission (SEC) make crypto lending a challenge for centralized finance platforms in the US. As a result, most CeFi platforms don’t offer crypto lending in the US. But in other countries, you’ll find CeFi lending options.


Best For Daily Payments
On Nexo’s site
Tokens Available
BTC, ETH, +More
APY Range
1.5% – 16%
Where Available

With over 5 million users worldwide, Nexo is one of the biggest crypto lending platforms and provides some of the highest returns (called APY, or annual percentage yield) on loaned funds. To promote the use of its platform, Nexo encourages transactions that use its native NEXO tokens and rewards users accordingly: If you opt to receive your returns in NEXO tokens rather than in whatever token you originally lent out, the platform gives you an extra 2% bonus.

  • Holding NEXO tokens = APY bonus
  • Daily interest payouts (some platforms, like YouHodler, pay weekly)
  • Nexo provides daily proof of reserves, a snapshot of their money situation and ability to pay back debts.

Risks: CeFi Lending

  • A centralized exchange can go under. The volatile nature of crypto isn’t limited to the market—some of the biggest platforms in the category could be one big crash away from bankruptcy. But don’t take our word for it. For example, in 2022, crypto lender Celsius made headlines when it announced it was halting all client withdrawals from its platform, then filed for bankruptcy, leaving investors scrambling to recover their funds.
  • A centralized exchange is subject to evolving crypto regulation. As governments around the world grapple with how to regulate crypto, centralized platforms must abide by new rules—or face a shutdown. New laws may, for example, limit certain crypto trades to accredited investors or establish restrictions on the kinds of trades that can be made.

Best DeFi Crypto Lending Platforms


On Compound’s site
Tokens Available
Aave, ETH, DAI +More
APY Range
Up to 2.58%
Where Available

Compound Finance is regarded as a blue-chip protocol in the DeFi space. Lending yields vary based on demand and the platform supports lending in ETH, WBTC, USDC, and several other major cryptocurrencies.


Best For Blockchain & Token Options
On Aave’s site
Tokens Available
APY Range
0.01% – 14.98%
Where Available

Similar to Compound, Aave’s DeFi platform uses a series of smart contracts that allow lending and borrowing. Where Aave differs from Compound is in its range of blockchains and tokens; Aave supports seven blockchains compared to just one (Ethereum) on Compound. Aave also offers more token choices for lenders and borrowers.

DeFi without risk? There’s no such thing. But Aave offers a Safety Module, an investor-funded insurance pool that insures against shortfall events. For example, smart-contract bugs could cause lenders to lose money. Losses can also occur when the market moves quickly, slowing or preventing collateral liquidations.

  • Aave supports 7 different blockchains and up to 18 cryptocurrencies (depending on blockchain); these additional blockchains, like Polygon, allow faster and cheaper transactions.
  • Easily swap cryptocurrencies on Aave to capture a higher yield; if you see a chance to earn a higher yield, you can exchange your tokens for the higher-yielding tokens without leaving Aave.
  • Stakers of the Aave token provide insurance against shortfall events (limited to 30% of the total staked Aave amount)

Risks: DeFi Lending

  • A decentralized exchange can be exploited. Yup, much like its CeFi counterpart—albeit with a twist. Because a DeFi lending platform relies on underlying code to function, that very code is a target for hackers. This means a hacker could cause wanton destruction across an entire platform rather than limit the damage to an individual account. The biggest DeFi protocols are time-tested and invest in smart contract audits, so don’t get too wound up about this. But it’s important to remember that whenever you connect your wallet to a new service, you could be at risk if someone exploits the contract.
  • Rug pulls are a thing. When you deposit crypto into a lending smart contract, how do you know what’s really going on in the code? Is there a way for the developers to remove the funds at will, never to be seen again? It can happen: Meerkat Finance ($31 million) and Uranium Finance ($50 million) are two examples of DeFi projects that were drained of user funds, both mysteries the crypto community is still trying to solve. Generally, it’s safer to lend on established DeFi lending platforms with well-audited code, such as Aave or Compound.

If you want to mitigate risk, consider reading our guide on the best crypto research tools for traders.

Crypto Lending vs. Staking

Crypto lending and crypto staking are among the most popular ways to earn a yield on crypto.

  • When you lend crypto, you make interest (yield or APY) on money you’ve lent to a borrower, and it comes with all the risks you’d expect with letting someone borrow your hard-earned cash.
  • When you stake crypto, you commit crypto tokens to a computer (validator) on the blockchain. Typically, validators with higher amounts of tokens staked have a better opportunity to build a new block, for which the validator earns rewards. In short: A validator needs your crypto to attract earnings and distributes most of those earnings to stakers (like you) after taking a fee.

Crypto Lending vs. Staking Crypto

TypeRewardsLeveraged ReturnsRisks
Crypto LendingCome from borrowers of your crypto paying interest.Loaned tokens cannot be used for anything other than earning interest while locked up.If centralized platforms become insolvent or experience liquidity issues, your funds may be at risk.
Crypto StakingCome from the transaction fees of the crypto protocol itself + newly issued tokens.With a technique called “liquid staking,” you can swap your staked tokens for a staked-equivalent token you can use in other DeFi apps to earn additional yield.If chain validators don’t perform well, they run the risk of having (your) delegated tokens slashed by the protocol.

To Sum It Up

Lending crypto can be a great way to earn a yield — and it’s often easier than lending in traditional finance.

But is crypto lending a good idea? Maybe. For some, it’s an effective strategy to earn an extra yield on cryptocurrencies you plan to hold anyway. But you’ll have to do your homework (and check it twice) before transferring any crypto to a custodial lending platform or approving a lending smart contract.

Frequently Asked Questions

Most crypto assets earn anywhere between 3% and 10% APY (annual percentage yield) when loaned out, which is several times what you could earn with your bank these days. But some risks can threaten those outsized returns, some involving the crypto lending platforms themselves. As with all things crypto, it’s important to do your research before you dive in.

Yes. The interest you earn is taxable. So, you’ll need to learn how to file crypto taxes. But in some jurisdictions, the tokens you deposit into a smart contract might create a taxable event as well. A conservative tax approach sees the smart-contract deposit as crypto “changing hands,” like a sale. This means that in some cases, there might be a capital gains tax due as well (assuming you have a gain).

When you lend crypto, you’re putting your crypto into a lending pool. Borrowers borrow from this pool, paying interest on their loans. That interest is shared between the lenders in the pool according to how much each has contributed. Today’s crypto lending platforms make the process easy, handling the loans, repayments, and interest payments. Don’t worry, you won’t have to collect the funds yourself.

Yes. You can take out a loan in a fiat currency (like the US Dollar) or a cryptocurrency by depositing cryptocurrency as collateral and borrowing against its value. Expect to deposit more than the loan amount, though; crypto loans are overcollateralized (higher crypto value than the loan value) because crypto prices can move quickly.

Over-the-counter (OTC) lending caters to people (or companies) lending large amounts of capital. OTC lending platforms usually work with clients through account specialists and provide higher lending rates for corporations, banks, and high-net-worth individuals who want to lend crypto. In short: OTC is for the crypto whales, whereas other lending platforms are designed for both average investors and larger investors.

Crypto lending is usually one of the less risky ways to earn a yield on crypto, but there are still some things that can go wrong.

  • Centralized crypto lenders sometimes close up shop — putting your crypto at risk. Both Celsius and BlockFi filed for bankruptcy in 2022. Lenders on the platforms found their funds trapped.
  • DeFi lending platforms bring some risks as well, including the risk of smart contract exploits.

Of the two, the risks associated with centralized lenders may be more difficult to mitigate. Often, the financial situation for crypto lenders is a black box, and you might not know there’s a problem until it’s too late.

By contrast, DeFi lending uses public smart contracts, computer code that anyone can view to see if there are opportunities for exploits. Many crypto lending protocols have also been audited to look for potential exploits before the smart contract is deployed.

Eric Huffman
Eric Huffman
Staff Writer
Eric Huffman is a staff writer for In addition to crypto and blockchain topics, Eric also writes extensively on insurance and personal finance matters that affect everyday households.
Shannon Ullman
Shannon Ullman
Managing Editor
Managing editor working to make crypto easier to understand. Pairing editorial integrity with crypto curiosity for content that makes readers feel like they finally “get it.”

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