So, I have small amount of cryptocurrency I bought and mined over the years and will HODL, but I am seeing news articles and advertisements about earning interest on my coins. And the returns are not bad--5 to 7% per year.
It seems BlockFi is the front runner. They seem to have partnerships with the major US crypto exchanges, e.g. Gemini and Coinbase (I am in the USA). I am also googling and trying to educate myself.
But, I have serious concerns about learning my crypto to 3rd parties. What happens if the institution that I loan to, for example BlockFi, goes brankrupt? I assume I will lose my crypto. Would it be safer to loan to an exchange and I don't run that risk?
What are your experiences so far with loaning your crypto?
What place do you loan to, or recommend loaning your crypto to?
It's simple. In bankruptcy, there is a loss of coins. And then we start thinking, are we ready to get 5% per annum, knowing that at some point we could lose everything? That was the first one.
The second. There are more than just lending services. There are also so-called liquid pools. Their essence is very simple - you provide liquidity to a decentralized exchange, it shares the commission with you. You can google uniswap, curve or aave. For some coins they give up to 100% p.a. Then, you can look about such things as arbitrage, if you know how to program (On the Internet they will steal your coins for sure). Or market-making. There are different strategies for limit volume, you can look and ask. I categorically do not recommend day trading. It is almost guaranteed to lead you to losses.