Investing directly into the cryptocurrency market is a great way to make a considerable amount of profit, however, not everyone is prepared to dedicate the necessary time and effort to make day trading worthwhile or willing to accept the risks associated with using more advanced investing methods, such as futures options and crypto staking. A more basic “buy and hold” strategy requires much less preparation and carries a lower risk exposure, but still leaves you at the mercy of the market’s volatile price movements, especially when your portfolio consists of lesser-known and smaller digital currencies.
Luckily, over the last couple of years, a multitude of ways to earn passive income in crypto have arisen. Today, there are numerous centralized and DeFi-powered variants of lending protocols available, which enable users to earn interest rates on their deposited crypto assets or to use their crypto as collateral for a cryptocurrency-backed loan. For those who are willing to use more advanced features that crypto platforms have to offer, there are various token staking options, liquidity-providing and yield farming products available to use to generate additional income with crypto holdings.
Interest rates on deposited crypto funds can vary greatly depending on which service you use and depending on the particular digital asset you’ve decided to pick as the preferred candidate to earn passive income with. Once you’ve decided to use your digital currency to secure a loan and you are picking among the dozens of crypto lending options available on the market, there are even more things to consider. Margin calls, repayment terms, asset insurance and withdrawal options are just some of the important aspects of crypto lending each user must be cognizant of.
Platforms similar to BlockFi present a great opportunity to earn passive income
One of the industries’ leading facilitators of cryptocurrency lending is BlockFi. Since being founded in 2017, the company has quickly risen to prominence and pursued the mission of emulating banks in the cryptocurrency industry. In addition to lending services, BlockFi offers BlockFi Interest Account (BIA) product, which pays interest on crypto holdings to depositors, as well as a cryptocurrency trading platform.
Users can take advantage of BlockFi’s suite of products and services by using various supported cryptocurrencies and popular stablecoins. The company also provides support for several fiat currencies. For instance, users who deposit Bitcoin, Ethereum, Litecoin or PAXG can request US dollar loans and use their crypto as collateral. Additionally, BlockFi has also partnered with Visa to offer a unique credit card, which pays out rewards in the form of BTC.
The 10 best platforms to earn passive income with crypto similar to BlockFi
Despite BlockFi being one of the more reputable services in the market, the suite of financial products it offers is somewhat limited. Many of its competitors offer crypto staking options, the ability to borrow cryptocurrencies, the option to earn interest rates by providing liquidity to liquidity pools, and more.
If you are looking for additional options to earn passive income on your cryptocurrency holdings or wish to use crypto assets that are presently unsupported on BlockFi, we’ve put together a list of the 10 best cryptocurrency lending options available that are good BlockFi alternatives.
1. KuCoin Crypto Lending
KuCoin is a massively popular centralized cryptocurrency exchange (CEX) that provides crypto lending options as well as additional ways to earn money on your crypto holdings. KuCoin allows users to either lend or borrow numerous different types of cryptocurrencies, from stablecoins to Bitcoin and to less popular cryptos such as ATOM and LUNA. Users can choose to either lend or borrow crypto assets for a time duration of 7 to 28 days. Interest rates vary greatly between different cryptos so it’s best to check the current figures on Kucoin’s website.
After allocating a certain portion of your KuCoin’s Main Account funds for lending purposes, you can use the “Auto-Lend” option, which gives the KuCoin’s system authorization to automatically lend out the extra amount of funds beyond the specified amount you reserved in your Main Account. This is a great feature for those who are not actively updating the balance reserved for lending but still want to take full advantage of the lending service to maximize their earning potential.
As opposed to BlockFi, KuCoin offers liquidity staking via the Pool-X platform, which is a proof-of-stake (PoS) Mining Pool. On the trading platform, users can take part in staking pools and operate nodes. Apart from other similar products on the market, Pool-X allows users to unstake their tokens whenever they want. The platform’s native POL token optimizes node searches and is utilized for payments.
KuCoin Crypto Lending summary
- Supports a large number of cryptocurrencies, ranging from BTC and ETH to lesser-known such as BitTorrent Token
- The exchange does not require a KYC at the moment
- A plethora of different lending options are available, varying by length and interest rate levels
- Liquidity staking option is available
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Celsius is of the more popular cryptocurrency lending options in the marketplace. The centralized platform boasts up to 17% weekly yield on crypto deposits while offering fiat borrowing at truly competitive rates. Celsius has built a community of almost one million users.
In addition to already impressive rates, users can choose to earn their rewards via the CEL token, which increases rewards by an additional 25%. Celsius offers low interest rates for borrowed funds, which can be further decreased when using CEL. For reference, a $15,000 loan requires 1.26 BTC as collateral and costs $150, or 1% to facilitate when using the 25% loan to value ratio (LTV) ratio. You can also choose a higher LTV ratio, which means you can get a much higher loan amount using the same collateral, but the interest rates are consequently much higher (up to 9x higher at the highest 50% LTV level).
The minimum loan amount when using stablecoins, such as USDT, is $500 USD while the minimum amount when using other cryptocurrencies is considerably higher at $15,000. To make the platform’s features more accessible when on the go, Celsius offers native support for iOS and Android mobile devices as a part of its app offering.
- Very competitive APY rates and user-friendly UX with native support for mobile devices
- Supports a variety of most popular cryptocurrencies and stablecoins
- CEL token can be used to earn higher rewards and lower interest rates on borrowed funds
- KYC is required
Binance is the largest cryptocurrency trading platform in the world. Apart from offering a massive list of cryptocurrency trading pairs, the Binance platform also includes a dedicated “Finance” option for users who are interested in using their crypto holdings to earn passive income.
Users are able to take advantage of different options that provide considerable passive income earning potential and compound rewards to make crypto assets grow instead of letting them sit idly in your exchange account or tucked away in your wallet.
Binance’s suite of products and services includes a Savings option, which allows users to earn stable earnings by staking their crypto assets. Locked staking provides higher APY and has only a 10 USDT barrier of entry, however, the staked assets are then locked for a predetermined period of time. To gain an idea about Binance’s rates we took a look at some popular earning options. For instance, BNB staking for a duration of 30 days nets an estimated 8.26% APY. BTC’s fixed savings option for the duration of 3 months earns an estimated APY of 7%. For higher ROI, users can pick liquid swap or DeFi staking products.
Obviously, Binance offers the usual crypto lending and borrowing services in addition to its large repertoire of financial products. After choosing the loan amount and the loan duration (ranging from 7 – 180 days), the LTV ratio, liquidation price and interest rates are calculated depending on the cryptocurrency options you have selected.
- In addition to its superb exchange offering, Binance also provides a large repertoire of ways to earn passive income with your crypto
- Numerous advanced financial services available, such as DeFi staking, liquid swaps and more
- Offers crypto-backed crypto loans, however, the option for fiat loans is lacking
- Gives the opportunity to repay the borrowed amount at any time
Compound uses Ethereum blockchain and smart contract functionality to facilitate its decentralized finance (DeFi) lending protocol. Compound is an autonomous interest rate protocol that allows users to lend cryptocurrency and earn interest by supplying crypto assets to the protocol and in exchange they receive cTokens in return (for instance, cETH is used when working with Ethereum).
With each subsequent Ethereum block, the interest rates are compounded. Once you decide to remove your funds from the protocol, you can easily redeem your cTokens holdings for a corresponding amount of the digital currency that you initially supplied.
If you wish to go the decentralized route, then Compound is one of the better choices currently available. While the interest rates don’t necessarily reach the figures of centralized lending services, Compound has the added benefit of not requiring a KYC and the ability to withdraw funds whenever you want.
- A good DeFI option for those who are searching for a decentralized lending service
- No KYC is required
- Support a variety of digital currencies and stablecoins
- Provides the ability to withdraw funds at any time
YouHolder is among the more popular centralized lending platforms. Per YouHodler, users can get a cryptocurrency loan backed by the top 20 coins with the highest LTV of 90%. Loans can be collected in a variety of most popular fiat currencies (EUR, USD, CHF and GBP) and can be withdrawn instantly to credit cards or to personal banking accounts.
Moreover, YouHodler provides additional advanced passive income earning options as well. For example, the platform uses the so-called Turbocharge service to clone your collateral, which can be of great value in case the price of the digital asset increases. The Turbocharge feature is based on the “cascade of loans” principle to maximize your earning potential.
If you are looking for a way to earn interest on your crypto holdings, the company offers a crypto savings account feature that pays out weekly interest payments. Stablecoins accrue the highest rewards, which can go up to 12.3% for USDT. Bitcoin investments, for example, offer up to 4.8%. Check the rates on YouHodler’s website for further information as the rates can vary greatly between different cryptos.
- Provides a good selection of coins and stablecoins
- A number of different services tailored according to different risk profiles
- Fiat borrowing is available
- KYC is mandatory
Next to its exchange offering, CoinLoan also offers services that are made for those who wish to use their digital assets to earn passive income. CoinLoan makes the whole process is very simple as there are no platform fees required before you can start earning money on your deposited crypto.
For those looking fot the highest APY possible, stablecoins are the best pick. Other cryptocurrencies reach an estimated APY of 7.2%, although this level can only be achieved when using the CLT-staking method with the platform’s native CLT coin.
While CoinLoan doesn’t offer as much variety as some of its competitors when it comes to choosing smaller cryptocurrencies to use as collateral, the platform excels in providing truly competitive interest rates, both in terms of borrowing and lending.
- Very high interest rates, especially when using the native CLT token
- The process of earning money on your deposited crypto is hassle-free
- The platform offers a relatively small number of cryptocurrencies to choose from
- KYC is required
Over the years, Nexo has grown to become one of the largest cryptocurrency lenders in the industry, with a market capitalization of close to $1 billion. If you are looking for a platform that accepts and issues loans in a large number of fiat currencies look no further as Nexo supports more than 40 different currencies.
Up to 12% interest can be earned on cryptocurrency deposits while retaining full control of your funds. Users are able to receive payouts daily without any hidden fees attached. Nexo provides access to a useful crypto yield calculator that shows how much money you are expected to earn during the selected time period. For reference, a $10,000 BTC amount will net you a profit of $1,942 over 36 months.
Borrowing service compares favorably with other similar solutions in the market. The Annual Percentage Rate (APR) for stablecoins or cash loans starts at 6.9%. Nexo accepts collateral in 21 different cryptocurrencies.
NEXO token holders can earn up to 2% in additional interest. Moreover, the company also offers its own Mastercard, which allows users to earn 2% cashback on all transactions.
- Competitive rates on deposited crypto assets
- Supports more than 40 fiat currencies
- Nexo Mastercard provides additional benefits and cashback rewards
- Holders of the native NEXO token can increase their earning potential by 2%
Decentralized exchange PancakeSwap is a fork of Uniwsap that runs on the Binance Smart Chain. As the name implies, the platform allows users to swap between various cryptocurrencies and to provide liquidity, which in turn earns a profit via transactions fees. The process may sound complicated, however, the system of smart contracts does the work, while users are left to focus on the best investment decisions.
PancakeSwap provides passive income earning capabilities in the form of yield farming, which is a way of earning income via liquidity pool (LP) tokens. Simply select a cryptocurrency pair, for example, CAKE-BNB and earn up to 52% APR. In this case, the reward is received in the platform’s native CAKE tokens, which provide governance functionality as well as staking options and exclusive participation in PancakeSwap Lottery.
CAKE holders can also take advantage of Syrup Pools, which is a less risky form of staking that nevertheless still provides high potential APY rates. PancakeSwap offers no fiat functionality or lending capabilities at the moment.
- Numerous crypto earning options in the form of staking tokens to provide liquidity to liquidity pools
- CAKE holders receive additional benefits, such as Syrup Pools, PancakeSwap Lottery and exclusive rewards
- One of the best services on the market for earning interests by providing liquidity
- No KYC is required
Uniswap offers basically the same functionality as PancakeSwap only on the Ethereum blockchain. Uniswap was the first to popularize the automated market maker (AMM) system. The DeFi exchange offers a truly vast catalog of cryptocurrencies, which users can decide to put in liquidity pools to earn a return on their holdings.
Providing liquidity is a two-way street. When providing liquidity for a particular pair of crypto assets, let’s say ETH and USDT for the purpose of this example, each asset swap results in a price adjustment. On one hand, the increase in liquidity is good for the exchange and the potential investors, while the liquidity providers are compensated by a transaction fee that is equally distributed among all liquidity provides once the trade of a particular asset pair is facilitated.
Uniswap’s own UNI governance token has quickly grown to become one of the largest cryptocurrencies by market cap and currently sits in 11th place with a $16.1 billion valuation. Keep in mind that providing liquidity is not without risks as providing liquidity to more obscure trading pairs can lead to an impermanent loss (difference between holding assets and staking them in an automated-market-maker-based pool).
- Support a massive number of cryptocurrencies on the Ethereum blockchain
- Providing liquidity is a great option for those who wish to retain their crypto but still want to earn passive income
- UNI governance token is among the largest cryptocurrencies which points to Uniswap’s popularity
- Was the first to introduce an AMM system
10. Kraken Staking
Kraken is one of the more popular exchanges in the industry with a trading volume that constantly places it among the bigger players in the sector. Kraken provides an exciting option in the form of Kraken Staking for those who are looking for a way to maximize their holdings which would otherwise be sitting idle in a wallet or an exchange account.
Kraken Staking allows users to earn staking rewards on top of their initial crypto holdings, which can help grow your crypto portfolio very quickly due to the compounding effect. Rewards on staked assets are paid out twice a week. Kraken Staking option covers ten crypto-assets, including Tezos and Kava in addition to USD and EUR staking. In short, crypto staking is the process of participating in the validation of transactions on a proof-of-stake (PoS) blockchain.
Kraken is a well-established brand on the crypto scene. The exchange accepts various fiat currencies for fiat onboarding purposes as well as a huge selection of tokens and trading pairs.
Kraken Staking summary
- One of the more respected brands in the cryptocurrency space
- Staking process is easily accessible and includes USD and EUR fiat options
- Staking rewards are paid out twice a week
- KYC is mandatory
Why having alternatives to BlockFi is important?
BlockFi has quickly grown to become one of the favorites among crypto users looking for ways to use their digital currencies as passive income generators or to use them as collateral for fiat issued loans, and for good reason. However, relying on a single platform and not paying attention to what the competitors are doing is not a good practice.
Over the years, a myriad of ways to earn passive income with cryptocurrencies have become available. Providing liquidity, staking, yield farming are just some of the more popular options. Additionally, loan to value ratios and interest rates vary greatly between various crypto lenders and it pays to keep a close eye on the most recent development.
We hope that the information provided in this article was helpful and will make your decision easier when looking for ways to passively earn crypto without trading.
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