What is crypto lending?

What Is Crypto Lending?

Crypto lending is when you lend your crypto to others (or a platform) and earn interest, or when you borrow crypto (or fiat) by putting up crypto as collateral. Centralized platforms (e.g. some exchanges) offer lending products. DeFi protocols let you lend and borrow through smart contracts without a company in the middle.

How It Works

As a lender, you deposit crypto and receive interest (often in the same or another token). As a borrower, you deposit collateral and can borrow up to a limit. If the collateral value falls too much, it can be liquidated. Rates depend on supply, demand, and the platform.

Risks

Borrowers face liquidation if prices move against them. Lenders face platform or smart contract risk. In India, interest may be taxable. Only use reputable platforms and understand the terms. Never borrow more than you can repay.