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Crypto Lending: All You Need To Know In One Place


Loans are what people take from a borrower, and then they return them at interest against collaterals like a house, car, or more. Apply the same rule, but with crypto coins as collateral, people get a basic understanding of crypto lending. Unlike traditional loans, crypto loans have lower interest rates and quick funding without a credit score.

Sounds fantastic, right? One can also start lending cryptos with Unocoin — Crypto Ka Super App: one of the best apps to trade crypto. But before diving in, let’s have a quick look at the concept of crypto lending to get started.

What is Crypto Lending?

Crypto lending can be explained simply through this example — Let’s say that someone has two bitcoin and doesn’t want to sell them. They want to hold on to it till its price goes up. But they also have current liquidity needs. And to deal with this precarity of sorts, crypto lending platforms and exchanges like Unocoin, one of the best websites to trade crypto, can come to everyone’s rescue.

Crypto lending, a part of decentralized finance (De-Fi), shined its way through since 2020, with an estimated value of over $78 billion since May 2020, which is about ten times the growth. The total value also represents De-Fi protocols’ present value, including crypto lending.

Crypto Lending

Through crypto lending, one can use their bitcoin as collateral and secure a loan that they will pay back in parts. And, if they fail to repay, the lender will cash out the bitcoin that has been offered as security.

Key Points To Remember:

But individuals don’t necessarily have to be a borrower here. They can earn passively, too, through interests if they lock up their crypto in a pool. To become a lender, individuals can try using some of the best crypto apps, decentralized or otherwise. Choosing platforms like Unocoin can ensure little room for loss of their funds because they’ll be managing the pool.

Crypto lending has also been touted as the future of finance. Being part of De-Fi protocols, it runs on an open-source code where rates are set in real-time. Hence, it provides a more realistic, accessible, and efficient way of getting a credit line.

How Does Crypto Lending Work?

Crypto lending happens with the lender, borrowers, and a third party (crypto trading platform or exchanges like Unocoin) that connects both.


What Are The Types Of Crypto Loans?

There are two main types of crypto loans — Flash Loans and Collateralized Loans.

Flash Loans: This type of crypto loan does not need collateral. These loans rely on smart contracts encoded, forcing the borrower to return the money in a single block. So, the borrower needs to pay back before the transaction expires. Else, the transaction is reversed immediately, as if the loan never existed.

Let’s break down an instance where flash loans are helpful.

Not just arbitrage, flash loans can be used for collateral swaps too.

Collateralized Loans: This loan gives the borrower a fixed time to use the borrowed amount in return for pledging collateral. The loan is approved through a centralized platform where they take over the collateral. Suppose the borrower’s collateral pledged is bitcoin. If they cannot pay the loan amount on the due date, the platform will have the authority to sell or liquidate the collateral.

Let’s break it down further:

Planning To Engage In Crypto Lending? Here’s What Everyone Should Consider:

There are many benefits and disadvantages to getting a secure crypto loan. But here are some things people should consider –

The Advantages of Crypto Lending

How To Start Crypto Lending?

First of all, people should choose a platform where they can start lending. Unocoin — Crypto Ka Super App lets users buy, sell, trade and exchange more than eighty digital currencies. Check if the crypto it is planning to lend is available with you, and check how much the yearly returns are. Crypto volatility also determines the return, and so do taxes which are flat at 30% on any gains coming out of digital assets like crypto.


Can people reap the benefits of crypto lending as a borrower or a lender? Yes would be the answer, and all they need to keep in mind is the time, context of the market, exchange platform, and confidence in repayability. Whether they go for centralized or decentralized projects, everyone must understand the loan conditions better to prioritize their finances. Crypto lending is usually the most accessible choice for anyone. Especially for those who have assets for collateral and know that they can liquidate them without paying taxes against them.

Please find the list of authentic Unocoin accounts for all your queries below:


Crypto products are unregulated as of this date in India. They could be highly volatile. At Unocoin, we understand that there is a need to protect consumer interests as this form of trading and investment has risks that consumers may not be aware of. To ensure that consumers who deal in crypto products are not misled, they are advised to DYOR (Do Your Own Research).

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