DeFi
5 of the Best DeFi Lending Protocols to Take Full Advantage of the Crypto Bull Market
It’s no secret that crypto is currently in the midst of a multi-year bull market, with top assets such as BTC and ETH chasing all-time highs and most other tokens including memecoins , continue to grow stronger. It’s also no secret that there is never enough capital to buy every asset on your bull market wish list.
Lending protocols provide a solution to this problem, allowing DeFi users to deposit an asset, such as ETH or BTC, and borrow stablecoins, which can then be exchanged for other assets, whether they These include AI tokens, RWA assets or memecoins. When used responsibly, loans allow savvy DeFi users to maximize their earnings. They can benefit from increasing the value of their collateral while using their borrowed assets to make additional gains.
But the lending protocol you choose will dictate what assets you can deposit, how you can use your borrowed funds, the interest you pay, and the loan-to-borrow ratio you can maintain. Here are five of the best lending protocols that will give you the most bang for your buck.
Nolus
Nolus is a growing cross-chain lending protocol. There’s a respectable $3.3 million in TVL and $55 million in volume since its launch less than a year ago. Two things make Nolus ideal when operating in a bull market. First, there is its ingenious financing offer of up to 150% – 3 times the industry average – via its DeFi Lease product. This allows lenders to obtain the maximum available capital and thus obtain the maximum available return.
As for how Nolus achieves this without increasing the risk of liquidation, it is because the asset staked – the down payment – and the borrowed asset are combined to acquire the asset desired by the user. By pooling these sources, it is possible to access much greater capital than would otherwise be available. The second interesting thing about Nolus is that it does not fully liquidate the user’s position in the event of undercollateralization. Instead, it administers a partial liquidation, providing ample opportunity to supplement collateral and minimize downside risk.
Aave
Aave needs no introduction to DeFi users, having established itself as a mainstay of the $36 billion DeFi lending industry. $20 billion of that total alone comes from Aave, whose multi-chain reach, robust security, and user-friendly interface have made it a favorite of everyone from minnows to whales. Over 160,000 native token holders can participate in on-chain governance, meaning Aave can also claim to be one of the most decentralized lending protocols on the market.
With eight supported networks, Aave offers familiarity, giving users confidence that they can rely on its proven protocol no matter which channel they choose to ply their trade. There are several ways to earn APY as an Aave user. You can deposit assets and earn interest on others’ loans; you can deposit your own assets and borrow a secondary asset, enjoying competitive interest rates; or you can bet AAVE and earn rewards for helping secure the protocol.
Kamino
Solana is the largest non-EVM chain for DeFi and memecoin trading and it naturally has its own protocols where lending is available. The main one is Kamino, which allows you to deposit or borrow native Solana assets, including USDC, SOL, and JUP. APYs are also attractive, offering plenty of incentives to those with spare cryptocurrencies to park for a double-digit passive yield.
One of the best things about Kamino is the range of assets it supports. In addition to Solana blue chips, it allows popular memecoins such as Wireless And BONK to use as collateral. This allows Solana users to reap the rewards of memecoin season while borrowing assets that can be used for other purposes, such as liquidity mining – or simply to buy more memecoins.
Compound
Compound is one of the oldest and most trusted DeFi lending protocols. Around $2.5 billion is currently deposited into its decentralized protocol and used to borrow around $900 million in assets. A number of EVM chains are supported including Polygon, Optimism, Base, Arbitrum and of course Ethereum. ETH and USDC can be borrowed and borrowing APRs are attractive.
One of the best things about Compound is that it has been integrated with many third-party platforms including OKX, Binance, and Crypto.com. As a result, users of centralized crypto services can reap the rewards of Compound’s efficient and highly secure crypto lending protocol. Governance is provided by COMP holders, who can propose and vote on protocol upgrades.
YouHodler
YouHodler is a centralized platform that intersects with DeFi, whose lending and borrowing formula inspired its own service. Designed to promote the hodl mentality, YouHodler encourages users to avoid selling their crypto when possible and borrow against it – a strategy that can be profitable in a bull market. One of the most useful things about YouHodler is the large number of cryptos you can borrow against: anything in the top 50 by market cap is accepted.
YouHodler also has other unique features that make this CeDeFi platform worth considering. Like its offering of a market-beating 97% loan-to-value ratio. Or the fact that borrowed assets can be converted into fiat currency and withdrawn to a bank account. If you don’t want to sell your crypto but have a house to buy or a car to repair, YouHodler is a good choice.
If you want to borrow against your crypto assets for the long term, you need to choose a reliable lending platform and maintain a healthy collateral ratio, which can help make your digital assets work for you.