Top 5 Lending CeFi Platforms
22 min read

Top 5 (CeFi) Lending Platforms: Earn Interest While HODLING

By Nikolas Ketonen

Perhaps the most underrated and under-utilized potential for cryptocurrency is leveraging the benefits of CeFi lending platforms. Why I believe many overlook the opportunities offered here is that the yields don’t match our expectations when crypto is the topic. Many get into crypto for those +100% earnings in a couple of weeks rather than earning 10% a year. However, remember that traditionally the stock market was viewed as the asset class with the highest returns at 7-9 % a year. That’s why we shouldn’t overlook the potential crypto earnings just lying around.

Another reason to seriously look into Cefi lending is that if you say you’re in it for the long run then why not earn that additional reward? I understand you don’t want to lend your asset if you’re looking for a price to exit at since you don’t want to have your funds locked up. However, if you’ve bought Ethereum talking about how you’ll hodl for 10 years because you believe in it for the long run then why not earn that 3-6 % extra per year while doing so.

In this article, I’ll go through the top 5 centralized (CeFi) lending platforms. I know some of you prefer DeFi platforms to centralized crypto platforms, but seriously, these Centralized Finance platforms are great and there are many benefits these platforms offer. Plus, I know some might appreciate the feeling of a more secure environment (not saying it is).

Quickly before starting, I want to point out that not all of these platforms are available globally, so you’ll have to check on that before using them. For example, I know that YouHodler and Swissborg are completely out of reach for US customers while Nexo is restricted to customers from the state of New York. Celsius also recently announced that their Earn accounts will be unavailable for new US-based users who are not accredited investors. Also, a few of these platforms have their own tokens and the tokens might also be out of reach for US customers.

But first, let’s quickly cover what CeFi is.

⚠️Safety Notice⚠️- In light of the recent liquidity issues faced by the lending platform Celsius and 3AC, and the high risk of contagion that could result in further company failures during these difficult market conditions, we do not recommend users keep funds on any lending platforms or centralized exchanges until the markets recover. We suggest crypto holders self-custody during these uncertain times.

What is CeFi (Centralized Finance)?

Crypto users love shortening terms, I don’t know why… Perhaps we are a lazy bunch. CeFi is short for Centralized Finance, the term “centralized” highlights the fact that there is a centralized authoritative body that has ultimate control over the platform, and all user funds. It’s essentially centralized crypto. This is in contrast to DeFi which stands for Decentralized Finance. The term “decentralized” highlights the fact that there is no central authority, and everyone who participates in the DeFi platform keeps full control over their funds, and their crypto is not handed over to the centralized company for custodianship which is the case with CeFi.

You may also hear the term CeDeFi which is a bit of an oxymoron standing for Centralized Decentralized Finance. This term is sometimes used for crypto lending companies as they are centralized platforms that offer decentralized crypto products. Each of the companies mentioned in this article falls under the CeFi or CeDeFi category (interchangeably) as they are centralized entities offering crypto products that were traditionally only available on DeFi platforms. It is important to understand that they have ultimate control over customer accounts and funds, similar to how a bank technically has control over any customer bank accounts.

Celsius: CeFi for the Masses

Founded in 2017 by Alex Mashinsky (check the link – he has an extremely impressive background) Celsius is perhaps one of the best-known centralized finance lending platforms with over $22 billion in funds and over 1.4 million users. The Celsius platform offers crypto lending, crypto borrowing, and payments. They are also working on a credit card and swap feature. Celsius also has features aimed specifically at businesses but in this piece, we’ll be focusing on retail use cases. And on top of all that Celsius has its own token called CEL, but we’ll get to that a bit later.

**Important Notice Update**- On June 13, 2022, Celsius released a letter to the community stating that they will be suspending all customer withdrawals for an unknown amount of time. In a difficult decision by Celsius, customer funds are locked on the Celsius platform, swaps, transfers, and withdrawals are unavailable. The company states the reason is due to “extreme market conditions,” and that they are acting in the interest of putting Celsius in a better position to honour its withdrawal obligations over time.

Withdrawals are likely to remain unavailable until the company is able to stabilize liquidity and operations as they take steps to preserve and protect assets. We recommend not depositing funds with Celsius until this issue is resolved and remind our community about the importance of self-custody over their own assets.

Alex Mashinsky
Not your average dude. Image via Celsius

First, let’s look at the lending and borrowing side. When lending with Celsius the amount you earn will depend on a few things:

  • which token you lend
  • how much you lend
  • where you’re located
  • which currency you receive your interest

When lending coins with Celsius they will pay you interest based on how much they can earn by “re-lending” your coins to institutions. When Celsius does this, they give 80% back to you in form of interest and keep the rest (I think that’s fair and that’s how all of these CeFi platforms work).

Naturally, the interest you receive therefore depends on the demand for certain assets, as well as the supply. Typically, some of the highest interest rate is paid on stablecoins. From Celsius, you can earn up to 10.73% on your USDC if you’re not based in the US and take your interest in the CEL token (I’ll use this rate going forward). If you’re in the US the rate is 8.50%. Other high-interest coins currently are SNX at 14.05%, MATIC at 9.10%, and DOT at 9.02%. For the big boys Bitcoin and Ether, the rates are 6.20% up to 0.25 BTC and 3.05% for over 0.25 BTC, and for ETH 5.35% up to 100 ETH and 3.52% over 100 ETH.

Celsius Interest Rates
Here’s a look at the highest earning assets on Celsius. Image via Celsius.

If you’re looking to borrow cryptocurrency you can easily do that using the Celsius app. When borrowing, you can choose the loan term and the interest rate too. The more you provide as collateral the lower the interest rate, and you’ll also get an additional interest rate discount if you pay in CEL. Celsius also has a calculator where you can check everything before borrowing.

For example, if I wanted to borrow 1000 USDC one option would be to do it like this: I could borrow it with a 1-year loan term and 0.75% interest rate by paying the interest in CEL and putting 0.9841 ETH as collateral (not bad if you ask me). Celsius also has a similar calculator for lending so make sure to check that one out too.

As mentioned, Celsius plans to offer more features and it seems that they’re trying to become more of an all-in-one platform rather than focusing completely on crypto lending and borrowing, which is good for the platform’s users. Being able to pay using the Celsius mobile application and later being able to have their credit card and swap currency on Celsius will make it easier to make the decision to deposit crypto there.

Currently, you basically lock your currency in Celsius when using the services since you can’t really do much else without first moving the cryptos to some other platform. It’ll be interesting to see if these other services can attract more money to Celsius and it certainly seems more appealing to put money there knowing that it’ll still have utility.

Celsius Rewards Status
Those high tier rewards do look good but 25% in CEL, hmm. Image via Celsius.

Lastly, I’ll briefly discuss the CEL token. The token basically works as a rewards program that gives you higher rates when lending and lower rates when borrowing. On top of that, you can earn over 5% APY for hodling. From the picture above you’ll see the different tiers associated with the token.

What’s great is that to achieve those higher tiers you don’t need more tokens you simply need to keep a higher percentage of your overall holdings in CEL. However, before rushing into this you should calculate it carefully since putting a big chunk of your holdings in CEL hasn’t been that rewarding. The token’s performance in the past year is at –17% which I doubt can be compensated for with those higher rates.

Feel free to check out our dedicated Celsius review article for a deeper look into this CeFi platform.

Celsius Inline

Nexo: Great CeFi Rates

Nexo is a subsidiary of Credissimo that was founded all the way back in 2007. The Nexo platform was deployed in 2018. To date, Nexo has paid over $200 million in interest, gathered over 2.5 million users in over 200 jurisdictions, and supports 27 different cryptocurrencies. Nexo offers both lending and borrowing as well as a payment card, which is one feature that differentiates it from Celsius. Nexo also has its own native token called NEXO, and that has the highest market cap of those mentioned here.

Starting with lending, Nexo has extremely good rates and for almost all tokens they’re higher than what Celsius offers. For example, the interest on your Bitcoin and Ether can be as high as 8% if you opt for a fixed term and get paid in Nexo tokens. Other interest rates are also extremely high, DOT at up to 15%, and then AVAX and MATIC have limited time boosted rates 17% and 20% respectively.

For stablecoins, the rates are up to 12% but what really differentiates Nexo is that you can lend fiat money too. Currently, it’s possible to lend USD, EUR, and GBP, the rates are the same as for stablecoins. What’s also different with the Nexo cefi platform is that the interest earned is paid daily while Celsius only pays weekly. However, while some might enjoy this depending on where you live, I would not since it would be a huge burden to keep up with the taxes, so make sure to check what the reporting requirements in your country are and be sure to follow them.

Nexo Interest Rates
A look at all the assets and their rates on Nexo. Image via Nexo.

When it comes to borrowing crypto, you’ll be happy to know that interest rates can be as low as 0% in certain situations, and they never exceed 13.9%. I couldn’t find exactly what the interest rates for different situations look like even though they have a calculator, therefore I prefer Celsius when doing calculations before committing to anything.

What caught my eye in borrowing with Nexo is that they’ve deployed the possibility to apply for a loan against your NFTs. Currently, they support two collections, Crypto Punks and Bored Ape Yacht Club. When applying you can get up to 20% of the floor price. This is something many platforms haven’t yet done and I’m sure there will be good demand for this, especially now that the prices have gone sky-high. Still, when talking about NFTs be careful when lending against them since we have yet to see them tested in case of a bear market and even that 80% buffer might not be enough.

Other features on Nexo include the already mentioned payment card as well as an exchange. The Nexo card is issued in partnership with Mastercard so using it shouldn’t be a problem. The card earns you up to 2% cashback and additional benefits on the Nexo site. However, before ordering it I suggest reading this piece on Coin Bureau and watching this video, both of them are about the best crypto cards. The exchange on Nexo is decent but certainly not the best. Exchanges are a topic multiple times covered on the Coin Bureau YouTube channel so you can find more information there.

Nexo Tier Status
As you see it’s easier to reach the high tiers on Nexo than on Celsius. Image via Nexo

Then to wrap up Nexo we’ll have a quick look at the token. Looking at its one-year performance it’s a lot rosier than for Celsius with a solid rise of over 300%. Due to the price action, you’ll probably be much more comfortable opting for the tiers on Nexo which are very much similar to what Celsius had. When you move to a higher tier you get benefits on all features on Nexo, my favorites are higher rates when lending as well as more free crypto withdrawals since with the basic plan you only have one.

We also have an in-depth Nexo review if you want to know more.

BlockFi: CeFi for Institutions

Here’s another cefi lending platform well known to those into cryptocurrency. What separates BlockFi from the two previous platforms is that it doesn’t have its own native currency. BlockFi took the traditional route of raising money from VCs and high net worth individuals first when it was founded in 2017 and since then they’ve had a few refills. On top of those borrowing and lending features, BlockFi offers both an exchange and a payment card, and they also have a separate site specifically for institutions.

Blockfi Instiutional Backing
There are some big names backing the project and that’s for sure. Image via BlockFi.

What’s disappointing after reading about the two previous platforms is that BlockFi sadly only supports 13 different cryptocurrencies and from what I could find Nexo or Celsius beat BlockFi on every asset. However, for some coins the rate was good, so I wouldn’t completely dismiss BlockFi before reading more about them.

The interest rates on BlockFi work similarly to Celsius’ meaning that they vary depending on the amount you deposit. For example, for BTC and ETH the rates get quite low as your position increases (look at the picture below). But BlockFi does have one strength when it comes to lending which is a huge deal for me; they can pay your interest in stablecoins.

Why this is so good is simply for tax purposes. Depending on where you live it might be a pain to keep track of all the interest you earn in which coins and to what prices, therefore earning in stablecoins helps and might even be worth sacrificing a little interest to make your life easier. BlockFi also pays the interest monthly which again is easier to deal with, at least in my country.

Blockfi Interest Rates
Here’s a look at the rates, not that exciting. Image via BlockFi.

Borrowing on BlockFi is pretty much the same as for the other platforms but again you might get better rates elsewhere. The lowest rate possible here is 4.5% and compared to what the others offer that’s quite high. However, BlockFi also has a calculator on both borrowing and lending so it’s easy for you to compare it to other sites.

If you’re a fan of cashback, then you’ll be happy to know that the BlockFi payment card includes a 90-day period with 3.5 % cashback, after that it’ll drop to 1.5%. While that 1.5 % cashback is less than what Nexo offers, you might want to order it and use it in the beginning to maximize your rewards since there are no annual fees.

When it comes to the exchange it’s decent but as I pointed out regarding the Nexo exchange, I think there are better ones out there. Lastly, one thing that needs to be pointed out is that BlockFi only allows one free withdrawal a month and after that, they charge a small fee. However, as Guy points out in a Coin Bureau video comparing BlockFi and Celsius, the fee is justifiable by the high-security BlockFi has in withdrawals.

If BlockFi is sounding like it may be the best Crypto lending platform for you, feel free to dig into our BlockFi review

YouHodler: Unique CeFi Provider

I know the last three options have been fairly similar and it’s time to provide something new. YouHodler was founded in 2018 and differentiates itself by supporting a multitude of different currencies that others don’t. Another difference is that they have a few unique features, however, with the downside that a few features like a payment card aren’t on the list.

As with all the others let’s start with lending. YouHodler offers competitive interest rates with 12 % on most stablecoins, 4.8 % on BTC, and 5.5 % on ETH. On top of that they have rates on coins like YFI (4.5%) and Sushi (7%). Altogether YouHodler supports 39 different cryptocurrencies. The interest is paid weekly in the same currency you deposited, nothing new here.

Youhodler Interest Rates
Couldn’t fit all of them in one picture but here’s most of them. Image via YouHodler.

The borrowing side is also fairly similar to others excluding one major difference. On other sites, the amount you can borrow on your collateral is around 50% while YouHodler allows as high as up to 90% and you can use all of the top 20 coins as collateral.

Now, while some might think this is great, I find it a bit scary. That’s because cryptocurrencies are extremely volatile, and your collateral might easily drop in value and leave you with a huge amount of debt compared to what’s left of your collateral. Speaking of collateral, YouHodler also offers the possibility to provide NFTs as collateral but that needs to be applied for separately. Now I don’t know which collections are supported but my guess would be that those blue-chip NFTs like BAYC and Punks are among them.

Youholder Multi Hodl
I only agree with the max 20% here (although 0% is what I would prefer), there is risk with “traditional” savings and potential loss in Multi-HODL is higher than 50%! Image via YouHodler.

The two features not offered on other platforms are Turbocharge and Multi-Hodl. These are essentially borrowing, and lending combined with steroids. When using this what happens is that you put your coins as collateral and take a loan with which you’ll buy more crypto which will again be used as collateral for a new loan, and so on (everything is done automatically of course).

What should immediately go through your mind is the extremely high risk of this and as a personal opinion, I wouldn’t suggest this to anyone. The potential gains are nice, but you can lose a lot of money with this which is why YouHodler itself doesn’t suggest allocating more than 20% to this and the rest in traditional savings (traditional meaning the normal crypto lending).

Newsletter Inline

Swissborg: CeFi and Crypto Exchange

As with YouHodler, Swissborg is vastly different from the previous platforms. This centralized finance platform is the only place I could consider using as my exchange and the yield earning possibilities are an extra bonus to use in earning additional rewards on my portfolio. Swissborg was founded in 2017 and has since gathered over 500k users with over $1.6 billion on the platform. Different from the other platforms Swissborg doesn’t offer borrowing, but how are the yields? 

Well, I have good news and bad news. The yields are great IF you have the genesis premium plan which boosts your earnings by 2x, I’ll get to the plans later. If you have the genesis premium, you’ll be earning almost 9% on stablecoins and for big boys BTC and ETH roughly 1% and 5.6% respectively. Now you might be wondering what else you can earn interest on and sadly there’s not much to wonder about since including those mentioned above Swissborg only supports earning on 9 different cryptocurrencies. The highest yield here is that of the Swissborg native token CHSB and currently, the rate is sitting at 24%.

Swissborg Interest Rates
Not that competitive without the Genesis premium. Image via Swissborg.

Why I said I might be open to using Swissborg as my exchange is because with the genesis premium you get low fees of only 0-0.25%. On top of that Swissborg offers some analytics tools as well as good portfolio statistics. They also allow trading with many more cryptocurrencies than they offer yields on, so you don’t need to be worried about that.

Now to the disappointing part. I’ve been writing about the wonderful things in Swissborg for those who have the Genesis premium, but the truth is that I don’t think many will go for it. In order to get it you need 50 000 GHSB tokens which will cost you over $30k in today’s prices.

Another possibility you can go for is the community premium which only requires 2000 GHSB tokens (≈ $1200). With the community premium you get 1.5x yield boost and 0.75% trading fees. Now depending on the size of your portfolio this could be worth it since the GHSB has been able to get you a 115% gain in 1-year excluding the high staking rewards on top of that, but it’s up for you to do your own research and decide.

We have a dedicated Swissborg Revew if you want to know more about it.

Crypto Lending FAQs

Where does the yield come from?

Some or all of the crypto deposits that users deposit on the platform are managed and lent out by the crypto company. Users are able to take out loans which are funds provided by customer deposits. The interest rates to borrow are higher than the interest rates offered on deposits so the extra money is passed on to customers who deposit (AKA lend) in the form of a yield. All the lending and borrowing is taken care of by the company so all customers have to do is deposit funds and the platform takes care of the rest.

How does Bitcoin lending work?

Many of these platforms provide the option to lend and borrow more than just Bitcoin but we will use Bitcoin as an example. Crypto lending works similarly to traditional lending from a bank, the only difference being that any crypto user can become a lender by depositing funds, no longer making this just a banker’s way to make money.

Cryptocurrency backed loans use digital currency as collateral, similar to a securities based loan, or say, a mortgage, where the loan is backed by the value of a home. So if I have one Bitcoin, I can deposit it onto a crypto lending platform where it is “locked up” and I can borrow an amount less than the value of the Bitcoin. Like a regular loan, customers pay back the funds over a specified period and they were able to access funds without having to sell their Bitcoin which is a win-win. 

When getting a crypto-backed loan, depending on the platform, customers can put up a multitude of different crypto assets up for collateral and borrow up to 70% of the value of their holdings depending on the platform. The funds that the customer looking to borrow can be other cryptocurrencies, stablecoins, or even US dollars that can be wired to a bank account.

Are crypto loans safe?

There are always risks involved in financial products. From a lending perspective, there is always the risk of major macroeconomic events causing mass liquidations of loans, when borrowers are not able to pay back their loans. This is a risk in both traditional and crypto finance, we saw an extreme case of this in traditional finance in the 2008 financial crisis.

From a borrower’s perspective, using crypto as collateral is riskier than traditional secured loans due to the extreme fluctuations of cryptocurrencies. There is a risk that the crypto put up for collateral can drop significantly in value over a short time, leading your loan to value ratio to fall outside of the appropriate ratios and result in the liquidation of your collateral.  Crypto lending companies will notify you when your loan to value (LTV) ratio is reaching these levels and from there you will need to choose to sell some of your collateral or put up more funds to bring the LTV back in line.

Crypto lending is also a hot topic for regulators and we have seen crackdowns on platforms like BlockFi, Voyager and Celsius so regulatory changes also pose a risk to these CeFi lending platforms.

Top CeFi Platforms: Conclusion 

Before getting to the actual conclusion, I just wanted to quickly add that all of these platforms are available as mobile applications and some of them are even mobile first built. This includes Celsius and Swissborg. Therefore, if you can’t seem to have access to some features you should check if it’s available in their mobile app.

Another thing I want to remind everyone about is that the rates stated here do fluctuate based on supply/demand. Those high rates for DOT might quickly fade if more people lend them. Also, the total amount you receive does take a hit if the underlying asset falls in value so don’t trust all the calculations you do to a full 100% since your earnings will fluctuate.

Now, when it comes to which you should use there’s no definitive answer that I can give you. All of them come with their own pros and cons, therefore it’s your job to weigh which centralized crypto platform is the right for you. For example, as mentioned earlier I’m a fan of simplicity which is why I’m up to sacrificing small gains in order to make the tax burden easier.  

Then if not only picking from these options is hard there are several more options to take into consideration. These include the likes of Crypto.com and KuCoin which both offer competitive earn features. And to make it just a tiny bit harder you also have the whole DeFi space to explore but that’s a topic for another day. 

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.
I'm a finance student with a growing interest towards cryptocurrencies. I'm extremely fascinated by the opportunities cryptocurrencies offer. In my writing I want to provide everyone with an easy entry to a complex industry.
View all posts by Nikolas Ketonen -> Best Crypto Deals ->

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