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?
Any service or exchange can be in such a situation. One has only to recall the situation with the hacking of Ku Coin ( I also considered this exchange more than reliable). So it is best to keep your assets in your wallet and not give them to external management.