Unregulated Crypto-Backed loans Are Becoming Increasingly Popular, But They Are Not Without Danger

2022-05-13 | Selina Mathew

Unregulated Crypto-Backed loans Are Becoming Increasingly Popular, But They Are Not Without Danger

Would you lend crypto if leaving it in your wallet doesn't provide much profit?

Dubai: While cryptocurrency is already well-known as a means of investing, it is clearly gaining popularity as a means of payment throughout the world — albeit not without associated hazards.

Crypto lending is a sort of 'DeFi,' or decentralized finance, in which investors lend their cryptocurrency to other borrowers in return for interest payments known as 'crypto dividends.'

(Decentralized finance is a term used to describe unregulated cryptocurrency platforms that allow lenders and borrowers to interact without the need of traditional loan gatekeepers such as banks.)

Many crypto lending services now take stablecoins in addition to cryptocurrencies. (Stablecoins are cryptocurrencies that are backed by a reserve asset and attempt to provide price stability.)

Regardless, DeFi is gaining momentum.

While DeFi has its roots in a crypto sector antagonistic to conventional banking, some of its goals – such as reducing costly stages and bureaucracy in funding – have piqued the interest of the companies it hopes to destabilize.

 

Leave a comment

Your email address will not be published. Required fields are marked *

Top 7 cryptocurrency overview



Best trading tool for cryptocurrency

2022 Top cryptocurrency Price Prediction List