Month: November 2022

Crypto lending has become a popular method for investors to increase their crypto portfolios and make extra income. Compared to traditional banks or TradFi, crypto lending offers a higher yield on crypto deposits. However, the rate differs according to platforms. Before crypto lending platforms became popular, investors had to leverage long-term holding or engage in short trading. Given the market’s volatility, both methods may be an unreliable way to earn extra income.

For instance, some investors typically buy crypto to HODL (a popular acronym for holding on to crypto through its price fluctuations). In a bear market like the market, it might take ages for an investor to make money HODLing. Refusing to sell with the belief that your crypto will rise is a decision that might bite you in the back. Short trading is more technical and might lead to more losses if you aren’t a proficient trader.

Cryptocurrency, known as digital money, was initially designed to ease payments without going through a bank or using a financial intermediary. As DeFi developed, the need to introduce more banking services became greater as demand increased. Since the objective of DeFi is to decentralize financial services and reduce entry barriers through blockchain, several DeFi protocols like Compound emerged. Its primary concern is to offer borrowing and lending services.

However, many users find it difficult to utilize the borrowing and lending services on Compound. This review explains how to borrow crypto with Compound and earn interest.