#one_knowledge_each_day_with_Welups [𝐄𝐝𝐮𝐜𝐚𝐭𝐢𝐨𝐧] 𝐋𝐞𝐧𝐝𝐢𝐧𝐠 𝐚𝐧𝐝 | Welups Official

#one_knowledge_each_day_with_Welups
[𝐄𝐝𝐮𝐜𝐚𝐭𝐢𝐨𝐧] 𝐋𝐞𝐧𝐝𝐢𝐧𝐠 𝐚𝐧𝐝 𝐁𝐨𝐫𝐫𝐨𝐰𝐢𝐧𝐠 𝐢𝐧 𝐂𝐫𝐲𝐩𝐭𝐨
Crypto lending is similar to the traditional lending concept. The only difference here is that you will be lending different cryptocurrencies to the borrower instead of paper money.
- Crypto lending works by taking crypto from one user and giving it to another for a certain fee. The exact method for loan management varies from platform to platform. You can passively earn extra income by staking your coins in a Lending and Borrowing platform. Depending on the reliability of the smart contract you use, there is usually very little risk of losing your funds.
𝐀𝐝𝐯𝐚𝐧𝐭𝐚𝐠𝐞𝐬
- Funds are easily accessible. Crypto loans are offered to anyone who can provide collateral or pay back with a quick loan.
- Smart contracts automate the entire process, making lending and borrowing more efficient and scalable.
- Simple to earn passive income with little work. HODLers can put their crypto in a vault and start earning APY without having to manage the loan themselves.
𝐃𝐞𝐟𝐞𝐜𝐭
- High liquidation risk depending on your collateral. Even with over-collateralized loans, crypto prices can drop suddenly and lead to liquidations.
- Smart contracts can be vulnerable.
- Borrowing and lending can increase your portfolio risk.
#Welups #OTB #Lending #Borrowing
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