Best Crypto Yield and Borrowing Platforms
Crypto yield and borrowing platforms fall into two primary categories – decentralized platforms like Compound and AAVE, and centralized platforms like Nexo and YouHodler.
Both platform types deal in providing crypto yield as interest for depositors and crypto loans for borrowers. The primary difference between the two is that centralized platforms take a hands-on approach to setting interest rates and management of the platform, whereas decentralized platforms leave many of those decisions to the automated code of smart contracts.
The end result is that centralized crypto platforms offer more stable interest rates and a management and operational structure more recognisable to traditional investors, whereas decentralized platforms are characterized by very volatile interest rates (often changing by the hour), a user experience best suited to experienced crypto investors, and varying degrees of separation between the companies that established them and their day to day operations.
NEXO
Founded in 2018 by Kosta Kantchev and former Bulgarian member of parliament Antoni Trenchev, Nexo provides lending, borrowing and a range of crypto banking services using cryptocurrencies as collateral. The company also offers low cost in-app swaps, a debit card, a wallet and a broad range of bank-like services. From the outset, Nexo’s focus has been on expanding its services to a global customer base. It offers fiat loans in over 40 different national currencies – and accepts 18 different cryptocurrencies as collateral. Nexo ceased offering its Earn product to US customers in early 2022 after the SEC filed charges against the now failed BlockFi. In terms of its regulatory compliance, Nexo is among the most proactive in the world. In June 2018, Nexo announced it had commissioned Armanino to conduct an ongoing ‘proof of reserves’ audit to show the company’s assets exceed its liabilities at all times. Nexo was in talks to acquire the failed crypto lender Vauld in 2022, but the deal did not complete.
Nexo Key Stats
Founded: 2017.
Location: London.
Structure: Centralized Finance.
Compliance: Registered as a Money Services Business in the United States with FinCen. Licensed across multiple other jurisdictions.
Assets under management: As at the 31st of January 2023, Nexo claims assets in excess of 2.2 billion. Audited by PCAOB-certified auditor Armanino.
Security: ISO/IEC 27001:2013 Certified Information.
Insurance: Some assets with BitGo – which has 100 million in cold wallet insurance, and some with Bakkt. Insurance only protects a fraction of Nexo’s total AUM and only in specific circumstances. See more here.
Maximum Loan to Value Ratio: 90% on stablecoins, 50% on BTC and ETH, 30% on most other cryptocurrencies.
Native Crypto Token: NEXO.
Current Nexo Deposit Rates
Current Nexo Borrowing Rates
Nexo Credit Card
CoinLoan
Established in Estonia in 2017 as ExFinance OÜ by Alex Faliushin and Max Sapelov, CoinLoan legally changed its name to CoinLoan OÜ in September 2020. In December 2021 Coinloan claimed it has 100,000 registered users. The company offers interest-bearing savings accounts, crypto collateralized loans, buy, sell & trade services and instant swaps. CoinLoan users who provide liquidity by staking the company’s token (CLT) pay lower interest rates and receive a higher APY on deposits. CoinLoan’s interest rates for deposits and loans are stable with a low level of volatility.
Coinloan Key Stats
Founded: 2017.
Location: Estonia.
Structure: Decentralized crypto finance.
Compliance: United States – FinCen Money Services Business, IRS Foreign Account Tax Compliance Act. Estonia – Register of Economic Activity (MTR) Virtual Currency Provider, Financial Institution License.
Assets under management: Undeclared.
Security: CoinLoan is a custodial service. Most assets stored offline with BitGo.
Insurance: None, except on assets stored with BitGo.
Maximum Loan to Value Ratio: 70%.
Native Token: CLT.
Native Token Performance 2021: The CLT token price went from $3.73 to $35.51 during 2021 – an increase of 852%
CLT Market Cap: US$47.6 million.
YouHodler
YouHodler is the trademark of Cyprus founded Naumard Ltd. The company has an associated entity (YouHodler SA) operating in Switzerland. YouHodler offers crypto loans with the highest Loan to Value ratio in the crypto space at up to 90% LTV. The company also offers crypto savings accounts, an exchange, a Web3 wallet and a range of other crypto-related financial services. YouHodler’s interest rates for deposits and loans are stable with a low level of volatility.
YouHodler Key Stats
Founded: 2018.
Location: Cyprus / Switzerland.
Structure: Centralized crypto finance.
Compliance: SRO Polreg in Switzerland, member of the Crypto Valley Association in the Western Switzerland chapter. YouHodler is registered in Italy as a cryptocurrency service provider.
Assets under management: Undeclared, although YouHodler claims around 300,000 “active” users with an average account balance of $5500.
Security: Partners – CipherTrace, Elliptic and Acuant.
Insurance: YouHodler uses Ledger Vault for asset custody which offers $150 million in pooled crime insurance.
Maximum Loan to Value Ratio: 90%.
Native Crypto Token: None.
Current YouHodler Deposit Rates
Current YouHodler Borrowing Rates
CRYPTO.COM
Based in Hong Kong, Crypto.com was founded in 2016 by Bobby Bao, Gary Or, Kris Marszalek, and Rafael Melo. Crypto.com offers a range of crypto financial solutions including buying and selling, yield for deposits, crypto loans, debit cards, crypto wallets and NFT services. The brand Crypto.com is the public-facing identity of MCO Malta Dax Limited, Foris MT Limited (Malta) and Foris DAX Global Limited (Ireland). Crypto.com undertook a very successful marketing campaign in 2021 and 2022 – specifically targeting US crypto investors and fronted by actor Matt Damon. On December 25th 2021, the famed Staples Center in Los Angeles was renamed the Crypto.com Arena. The company’s interest rates for deposits and loans are stable with low volatility. Crypto.com claims 80 million customers and users in 90 countries.
Crypto.com Key Stats
Founded: 2016.
Location: Hong Kong.
Structure: Centralized crypto finance.
Compliance: Payment Card Industry Data Security Standard (PCI DSS) Level 1. Crypto.com operates in multiple jurisdictions and hired Antonio Alvarez as its Chief Compliance Officer in June 2020.
Assets under management: Undeclared, although Crypto.com claims at least a 1:1 asset versus liability ration and provides a regular audit report.
Security: ISO/IEC 27001:2013, CCSS Level 3, ISO/IEC 27701:2019, PCIDSS v3.2.1 Level 1 compliance.
Insurance: 750M in cold storage insurance against physical damage or destruction, and third-party theft. Operates a security partnership with crypto security experts Ledger Vault. Insurance only protects a fraction of Crypto.com’s total AUM and only in specific circumstances. See more here.
Maximum Loan to Value Ratio: 50%.
Native Crypto Token: CRO.
Current Crypto.com Deposit Rates
Current Crypto.com Borrowing Rates
Crypto.com Credit Card
NOTIONAL FINANCE
Notional Finance was founded by US-based team Teddy Woodward and Jeff Wu in 2019. Notional is a decentralized, Ethereum-based protocol for borrowing and lending at fixed rates and fixed terms for up to one year. The company is privately held and raised $10 million in a Series A funding round led by Pantera Capital in April 2021. With a four-year liquidity mining initiative underway, Notional’s on-chain pools are capitalized for very large trade sizes in four currencies – ETH, WBTC, USDC & DAI – for up to one year. Four separate audit processes were completed prior to the recent V2 launch on Nov 1, 2021.
NOTIONAL Key Stats
Founded: 2019.
Location: San Francisco, United States.
Structure: Decentralized crypto finance.
Compliance: N/A – assets are non-custodial.
Total Value Locked: ~$150 million
Security: Smart/governance contracts audited by Certora, ABDK, Code Arena & Open Zeppelin.
Insurance: Nexus Mutual (from November 15th 2021)
Maximum Loan to Value Ratio:Asset dependent ~ 45-50%.
Native Crypto Token: NOTE (governance token).
Native Token Performance 2021: Data not available.
NOTE Market Cap: $4.4 million.
Current Notional Deposit Rates
Current Notional Borrowing Rates
Compound
Founded as Compound Labs Inc in 2017 by Robert Leshner and Geoffrey Hayes. Compound differs from organizations like Celcius or Nexo in that its interest rates for deposits and borrowing are set autonomously by smart contracts based on up-to-the second supply and demand data. This means for deposits and loans the interest rate is always ‘floating’. This offers the advantage of Compound clients being able to benefit immediately should interest rates move in their favor, with the downside being a lack of longer term certainty as to the cost of loans or ROI on deposit investments. Compound’s interest rates for deposits and loans are highly volatile.
Compound Key Stats
Founded: 2017.
Location: San Francisco, United States.
Structure: Decentralized crypto finance.
Compliance: Open source protocol – no institutional licenses.
Assets in smart contracts: $12 billion.
Security: Smart contract audits by Trail of Bits and OpenZeppelin in 2019. Compound scored a major security ‘own goal’ in 2021 when it released buggy code that permitted over US$60 million in COMP tokens to be drained from its wallets. Compound offers bug bounties to a maximum of US$150,000.
Insurance: None.
Maximum Loan to Value Ratio: Depends on the security posted. Compound lists its ‘Collateral Factors’ as ranging from 0-90%.
Native Crypto Token: COMP.
Native Token Performance 2021: The COMP token price went from $149.89 to $200.29 during 2021 – an increase of 34%.
COMP Market Cap: US$1.21 billion.
Current Compound Deposit Rates
Current Compound Borrowing Rates
C.R.E.A.M
Cream was founded by Taiwan-based entrepreneur Jeffrey Huang and Leo Cheng in 2020. Cream is a decentralized crypto finance protocol and is a fork of the Compound project. Cream provides lending, borrowing and other crypto liquidity services and operates on both the Ethereum blockchain and the Binance Smart Chain. Cream ‘merged’ with Yearn Finance in November 2020. The protocol has been the target of some of crypto’s largest hacks – the most recent occurring on October 27th when $130 million of user’s funds was stolen in a massive smart contract exploit. It is unclear if Huang is still involved in the protocol. Cream’s interest rates for deposits and loans exhibit a high level of volatility.
Cream Key Stats
Founded: 2020.
Location: Taiwan.
Structure: Decentralized crypto finance.
Compliance: N/A – assets are non-custodial.
Assets in smart contracts: estimated $500 million.
Security: Smart contracts audited by Trail of Bits.
Insurance: None.
Maximum Loan to Value Ratio: Asset dependent – range is 45-75%.
Native Crypto Token: CREAM.
Native Token Performance 2021: The CREAM token price went from $67.32 to $37.18 during 2021 – a decrease of 45%.
CREAM Market Cap: US$26.3 million.
Current CREAM Deposit Rates
Current CREAM Borrowing Rates
SALT
Salt is a US-based centralized lending platform targeting retail and business borrowers with crypto collateralized loans. The minimum loan on offer from Salt is $1 million. Salt lends in US dollars or stablecoins and accepts 10 cryptocurrencies as collateral. Salt is globally focused and offers loans in Bermuda, Brazil, Hong Kong, New Zealand, Puerto Rico, Switzerland, the United Arab Emirates, the United Kingdom and many states in the US. The company has announced the impending launch of a crypto credit card. The company’s interest rates for loans exhibit a low level of volatility. Salt does not offer interest-bearing accounts for retail crypto deposits.
Salt Key Stats
Founded: 2016.
Location: Denver, United States.
Structure: Centralized crypto finance.
Compliance: Salt is compliant with a range of US state and federal lending regulations including Consumer Credit Protection Act, the Truth-in-Lending Act, the Equal Credit Opportunity Act and others.
Assets under management: Unknown.
Security: Cryptocurrency Security Standard (CCSS).
Insurance: Salt says it has “Cyber Insurance” but does not specifically identify its insurance provider. The company says some assets are custodied with Fireblocks and all insurance is underwritten by Lloyd’s, but it is not clear whether or not this is via Fireblocks.
Maximum Loan to Value Ratio: 60% for retail and 70% for business loans.
Native Crypto Token: SALT. In September 2020, Salt settled with the SEC in relation to conducting an unregistered initial coin offering (ICO) of its Salt tokens. As a result of the settlement, SALT tokens are now recognized as securities under Section 12 of the US Securities Exchange Act.
Current Salt Deposit Rates
Current Salt Borrowing Rates
Salt Credit Card
AAVE
Founded in London in 2017 as ETHLend, the decentralized lending protocol rebranded to AAVE in 2020 and launched its native AAVE token at the same time. AAVE is one of the biggest players in the global DeFI space, with huge liquidity pools and the AAVE token’s market cap is in the crypto top 30. The AAVE token provides holders with discounts on trading fees and governance rights over the protocol. AAVE offers loans and interest for deposits in addition to being a specialist provider of crypto ‘flash’ loans.
AAVE Key Stats
Founded: 2017.
Location: London, England.
Structure: Decentralized crypto finance.
Compliance: N/A – assets are non-custodial.
Assets in smart contracts: 13 billion.
Security: Smart contract audits by SIgmaPrime, PeckShield, CertiK and others.
Insurance: None.
Maximum Loan to Value Ratio: AAVE offers a 75% LTV for less volatile assets like stablecoins and ETH, and LTVs as low as 35-40% for volatile assets like REP and LEND.
Native Crypto Token: AAVE.
Native Token Performance 2021: The AAVE token price went from $87.53 to $255.11 during 2021 – an increase of 191%.
AAVE Market Cap: US$3.55 billion.
