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?
I think these days crypto lending is becoming a pretty popular option especially with new investors. I feel that 5-7% per year isn't that bad but obviously. But this idea works only on centralised platforms like Binance or other exchanges because they can control the funds of other person or the borrower. This makes lending on such platforms safer.
There is always something to lose when investing, lending your coins for interest will always be risky and the ones who put their feet to risk are always the ones going to take profit when things are going good but they are also the ones losing more when things got ugly. The only safer option if you want to make money without taking a high risk is POS.
I don't think POS is possible with Bitcoin Ethereum and some top currencies rest all are pretty volatile so even if you are gaining coins you might not end up gaining anything in dollars.