There are two types of lending in the crypto world. One is similar to lending money to a friend and charging them interest. The second form of lending in the crypto-market allows people to lend a company money and receive a 0.5 – 2% return on investment (ROI) daily. The second form of lending is dead.
The two main lendors, Bitconnect and Davor, both announced that they were ceasing their lending operations. Bitconnect cited pressure from regulators in the US and Davor said the lending part of their platform was devaluing their coin, because lending had lost its luster.
This part of cryptocurrency lending has been suspected of running a Ponzi scheme, because there was no verifiable proof that the companies were actually mining, or trading or conducting any type of business that would generate enough profit to pay lenders the daily interest they were offering.
As far as the first type of lenders, their businesses seem to be continuing in a strong upward momentum. Companies like SALT, Unchained Capital, and BitBond make it possible to borrow currency without credit checks and make peer-to-peer lending a reality.
These companies facilitate the loans, but are not involved like a financial institution. “Paperwork” is minimal and loans can happen quickly. Loan sizes vary from lender to lender and each one has its own regulations.
If you have some cryptocurrency that you’d like to lend, hooking up with a credible lending company will get you a solid ROI. You’ll still find lending companies that promise daily returns similar or better than Bitconnect and Davor used to, but don’t count on them being around for very long.Read More →