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Best DeFi Lending Platforms

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Best DeFi Lending Platforms

There is over $13 billion locked in DeFi (decentralized finance) platforms and for good reason. 

Even since late 2017, DeFi has been the next revolution of applicable crypto as it breaks the barrier of bank-run finance. 

So, how to you know where to invest your time and money? It takes a lot of research to find not only trustworthy DeFi platforms but also ones that turn a decent profit. 

Good news for you is that this review lists the top 5 DeFi lending projects that we have used personally. 

So, let’s get started by going over the basics.

What is DeFi?

If you are new to this whole DeFi thing then you might not even know how does DeFi lending works. 

Basically, DeFi uses the Ethereum network to host lending, payments, gambling, and margin trading protocols. We will focus on lending in this article. 

Lending on DeFi works similar to a bank other than it is anonymous and decentralized. Plus, the interest earned is usually must higher. 

You use a cryptocurrency, stable coin, or ERC-20 token as collateral to earn interest on your lending amount. DeFi lending rates depend on the coin and platform.

Top DeFi Lending Platforms

Now that you know how DeFi works let’s review the top 5 platforms that you can get started with earning money today. 

Aave

There is almost $2 billion in Aave, making it one of the most popular DeFi apps available. The more money invested in the platform, technically, the more secure it should be. Plus, Aave has been around since November of 2017.

Their decentralized platform consists of lending and borrowers. Lenders deposit coins to earn interest. Borrows deposit coins as collateral for a loan. 

Then the DeFi mints ERC-20 aTokens to fund the assets on a 1:1 ration. The more money in the DeFi than the higher the interest rates for its users. 

See below for more features and Aave’s safety rating. 

Aave Review
Reputable and User-friendly
Aave combines a pleasant user experience from the start. All you need to do is connect your crypto wallet and deposit any amount into the protocol. It also has one of the largest amounts of USD locked in the platform. This, along with its security features, makes it less of risk for your assets.
Features
Passed 2 third-party audits
Bug bounty program rewards users reporting on issues on the platform
No minimum deposits
Supports 16 cryptocurrencies (13 for borrowers)
95
Safety Rating
Try Aave

Compound

Another DeFi lending platform with big numbers is Compound Finance. They have over $3.8 billion in assets used as collateral for borrowers or deposits used to earn interest for lenders.

The best part about Compound is its system of governance by its cToken holders who have a stake in the Defi platform. 

There’re also other platforms that integrate the protocol, including CoinTracker (the crypto tax software), Binance, and Coinbase Custody. 

Check out our review and rating of Compound below.

Compound Review
Self-governing Community
This DeFi platform is completely autonomous due to its self-governance voting system. Its community also extends into integrations with other crypto platforms, wallets, and exchanges. 
Features
Puts 10% of interest in reserve
Borrow up to 75% of of platform's cTokens
Supports 8 cryptocurrencies
Community Governance
Audited twice by third-party reviewers
Reward-based bug bounty program
94
Safety Rating
Try Compound

Kava

The Kava DeFi app is a cross-chain DeFi that uses the stable coin USDX for collateral lending and a Kava Token for voting and internal governance. 

As a cross-chain DeFi, users can transverse between multiple networks. This means payments can transcend various blockchains, and cryptos can be swapped using the Switch feature. 

It’s also built on Tendermint, which is a consensus engine using proof of stake to validate. This offers stability to the network as validators earn stability and transaction fees.

Read more about Kava’s features below.

Kava Review
Cross-chain Versatility
The ability to use Kava via Trust Wallet across blockchains, cryptos, and wallets is innovative and convenient. This allows multi cryptos to be used as assets since it uses a stable coin to back investments. It doesn’t have the safety features like some DeFi platforms but its versatility and ease of use might make up for it. 
Features
Supports 6 cryptocurrencies
Collateral assets backed by stable coin
Proof of stack validation
Token-based governance and voting
Cross-chain capabilities
85
Safety Rating
Try Kava

SushiSwap

A fairy new DeFi protocol, SushiSwap got off on a rocky start by two anonymous developers (0xMaki and Chef Nom) who found each other on Twitter. The name and the history may sound too flaky to be a financial investment option, however, the community is quite vocal and involved. 

And after their initial launch, the founders conducted two audits of the DeFi, ensuring its functionality and safety. Then in the first week of launching, they accumulated $1 billion locked assets, proving its popularity. 

Chef Nom eventually left the protocol and 9 DeFi-savvy individuals were voted in to lead the decentralized exchange. 

As an evolved version of Uniswap (one of the largest DEX) as it claims, it rewards early adopter liquidity providers and uses an automated market maker (a smart contract) where the ratio of two assets in each pool determines the value. 

See SushiSwap’s review and features below.

SushiSwap Review
High Reward for Loyalty
SushiSwap has a complex history and interface, but their unique community and LP (liquidity provider) token- run DeFi protocol makes up for it with high rewards and interest earnings. The community takes care of its early adopters and makes it simple to swap ERC-20 tokens without KYC information. 
Features
Audited twice by third-parties
Up to 10x rewards for early adopters
Many ways to earn huge interest rates based on SUSHI market value
Decentralized Exchange to easily swap ERC-20 tokens
Community driven and governed
90
Safety Rating
Try SushiSwap

DeFi Lending Platforms Continuously Growing

This list contains the top DeFi Lending platforms, but new projects are always in the works. Check back for new reviews often as DeFi is still in its infancy.

In the meantime, visit our full list of top DeFi platforms to get even more investment options.

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