which has recently gained popularity all over the world, cryptocurrencyIt is known for its short-term fluctuation. However, investors who have not complained about short-term volatility for a long time now use their digital assets as collateral for loans.
The lending system, which enables cryptocurrencies to earn passively, is also in the crypto money world. Curious of those who want to have more detailed information about crypto money “What is Lending?We answered the question ”in this article. Here’s what you need to know about lending.
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What is Lending?
Lending is a passive earning system by renting cryptocurrencies. A secured loan that you pledge an asset to secure financing. In this case, the cryptocurrency becomes the asset offered to the lender in exchange for cash, which you will pay back in installments.
users, lending With the contract, they can open a position for more than the amount they have in their hands. The biggest benefit of this system is that any buy and sell earning without the need for a transaction. In addition, you do not need to follow the markets instantly by lending.
How is Lending done?
Although the lending process is similar to the structure of banks in stock markets, it is easier than banks. Generally speaking, you need to open an account in the stock market to make lending transactions in stock markets. You should also transfer your funds through third-party applications.
renting your coins You need to transfer your funds, which are on the stock exchange platform you have chosen, to lending. For this process, you should follow the directions on the platform you use. Then, you need to prepare offers to determine the amount of money you will make available in the lending part of the business or the maximum number of days you want to keep in interest.
After you create the offer and your offer is approved, your funds are made available for renting through lending. At the end of the contract, you get earningis transferred to your account.
What should be considered when lending?
The most important point to consider when making a lending transaction is the interest rate you will set. Low interest rates attract a lot of attention. because margin traders First, he chooses the lowest interest rate of the rented money. If you are going to borrow money, you should prefer low interest rates. But for lenders, higher interest rates would be more ideal.
Another point you should pay attention to is the security of the platform on which you will trade. Before choosing a platform, you need to know how the platform ensures the security of the funds you give. All these points help you to make a lending transaction.