Crypto Basics

Crypto Lending Explained - Benefits, Risks and Top Lending Platforms in 2023

Learn everything about crypto lending and get an overview of the top lending platforms of 2023, in this descriptive guide.
Sumit Meghani
8 Minutes
MIN

Are you looking for a new way to invest your cryptocurrency? Or perhaps you're in need of a loan, but tired of dealing with traditional financial institutions. If so, you may want to consider crypto lending.

Crypto lending is a relatively new phenomenon that's gaining popularity among investors and borrowers alike. It's a form of peer-to-peer lending where individuals or institutions can lend or borrow cryptocurrency, such as Bitcoin or Ethereum, using a decentralized platform.

In this article, we will cover a comprehensive overview of crypto lending, including its functionality, benefits, risks, and the leading platforms for crypto lending in 2023.

What is Crypto Lending?

Crypto lending is a service within the decentralized finance (DeFi) ecosystem that enables investors to lend out their cryptocurrency holdings to borrowers. As a lender, you earn regular interest payments on your crypto deposits, similar to how you would earn interest in a traditional savings account.

Image Resource: www.rocketmortgage.com/learn/what-is-crypto-lending

Crypto lending platforms can either be centralized or decentralized, and they offer varying interest rates depending on the platform and other factors.

On the other hand, borrowers can use cryptocurrency lending platforms to obtain cash loans by collateralizing their crypto holdings. By posting collateral, borrowers can access funds without having to sell their crypto holdings, which can be beneficial during market downturns. 

How Does Crypto Lending Work?

To participate in crypto lending, you'll need to find a reputable platform that offers this service. There are several platforms out there, such as Nexo, BlockFi, and Celsius Network, to name a few.

Once you've found a platform you trust, the process is fairly straightforward. Here's a step-by-step guide to how crypto lending works:

Step 1: Create an Account - The first step in crypto lending is to create an account on the platform of your choice. This usually involves providing some personal information (KYC), such as your name and email address, and creating a password.

Step 2: Deposit Cryptocurrency - Next, you'll need to deposit cryptocurrency into your account. This will be the cryptocurrency that you use to lend or borrow funds.

Step 3: Choose a Lending or Borrowing Option - Once your account is set up and your cryptocurrency is deposited, you can choose whether you want to lend or borrow funds. If you're looking to lend, you can select a lending option that meets your needs. This may involve choosing the cryptocurrency you want to lend, the interest rate you want to charge, and the length of the loan term.

If you're looking to borrow, you can select a borrowing option that meets your needs. This may involve choosing the cryptocurrency you want to borrow, the interest rate you're willing to pay, and the length of the loan term.

Step 4: Wait for Approval - Once you've selected your lending or borrowing option, you'll need to wait for approval. This may involve a credit check or other verification process, depending on the platform you're using.

Step 5: Receive Funds - If you're approved, you'll receive the funds in your account. If you're lending, the borrower will receive the cryptocurrency they've borrowed. If you're borrowing, you'll receive the cryptocurrency you've borrowed.

Step 6: Make Payments - If you're borrowing, you'll need to make regular payments to repay the loan. This will usually involve paying interest on a monthly basis. If you're lending, you'll receive regular payments from the borrower, which will include the interest you've charged.

Step 7: Close the Loan - Once the loan term is over, you'll need to repay the full amount of the loan, plus any outstanding interest. If you're lending, you'll receive your cryptocurrency back, along with the interest you've earned. If you're borrowing, you'll need to repay the cryptocurrency you've borrowed. 

How to Make Money with Crypto Lending?

Crypto lending can be an effective way to earn passive income with your cryptocurrency holdings. Here are some important things to know, to make money with crypto lending:

  • Choose a reputable crypto lending platform: Selecting a reliable platform is crucial for successful crypto lending. Look for platforms with a proven track record, solid security measures, and transparent lending terms.
  • Determine your lending strategy: Decide on the amount of crypto you want to lend out and for how long. Longer lending periods often yield higher returns, but also carry more risk.
  • Set competitive interest rates: Set an interest rate that's competitive with other lending platforms. A higher rate may attract more borrowers, but also increases the risk of defaults.
  • Manage your risk: Conduct thorough due diligence on potential borrowers and keep a diversified portfolio to mitigate risk. Additionally, consider collateral requirements and loan-to-value ratios when selecting borrowers.
  • Reinvest your earnings: Reinvesting your earned interest can compound your returns over time, increasing your overall profits.

By following these tips, you can effectively make money with crypto lending while managing your risk and ensuring a stable return on your investment.

Also Read: How to Make Money with Cryptocurrency in 2023

Best Crypto Lending Platforms in 2023

Identifying the ideal lending platform that caters to your requirements can be a daunting task, given the vast number of options available in the market. To help you make an informed decision, we have curated a list of the best crypto lending platforms that you can consider in 2023.

Celsius Network: With over $20 billion in crypto assets under management, Celsius Network is a trusted and well-established platform for crypto lending. It offers competitive interest rates, ranging from 2.5% to 13.99%, depending on the cryptocurrency you lend and the loan duration.

BlockFi: BlockFi is another leading crypto lending platform that offers interest rates ranging from 0.5% to 8.6%, depending on the cryptocurrency and loan terms. It also provides additional services such as crypto-backed loans and a Bitcoin rewards credit card.

Nexo: Nexo is a popular platform for instant crypto loans, and it allows users to earn up to 12% interest on their crypto assets. It also provides a range of other features, such as crypto-backed loans and a credit card.

Crypto.com: Crypto.com is a leading cryptocurrency platform that offers interest rates of up to 8.5% on a range of cryptocurrencies, including Bitcoin, Ethereum, and stablecoins. It also provides other features such as a crypto debit card and an exchange platform.

When choosing a crypto lending platform, it's essential to consider factors such as the interest rates offered, the loan terms, and the platform's overall reputation and security measures. By selecting a reliable and trustworthy platform, you can ensure that your crypto lending investments are safe and profitable.

Benefits and Risks of Crypto Lending

Crypto lending has been gaining significant traction lately due to the potential benefits it offers to both lenders and borrowers. However, like any financial activity, there are also some inherent risks involved. 

Lets understand the benefits and risks associated with crypto lending in detail.

Crypto Lending Benefits

Here are some benefits of crypto lending:

High returns: One of the most significant advantages of crypto lending is the potential for high returns. Many lending platforms offer APYs upwards of 10%, which is significantly higher than traditional savings accounts.

Diversification: Crypto lending provides an opportunity for diversification in your investment portfolio, which can help mitigate risks.

Flexibility: Crypto lending platforms offer more flexibility than traditional financial institutions, with features such as short-term lending, early withdrawal options, and customized loan terms.

Risks Associated with Crypto Lending

Here are some risks associated with crypto lending:

Volatility: The crypto market is known for its volatility, which can impact the value of your investments and potentially lead to losses.

Counterparty risk: When lending your crypto assets to borrowers, there is always a risk that they may default on their loan, leading to a loss of your funds.

Security risks: Crypto lending platforms are not immune to hacking attempts, which can result in the loss of your funds.

The Bottom Line

Overall, crypto lending provides a win-win solution for both lenders and borrowers in the DeFi ecosystem. Lenders earn passive income on their crypto deposits, while borrowers can access much-needed funds without liquidating their cryptocurrency investments.

In conclusion, the crypto lending industry is rapidly expanding, and there are plenty of great options available for investors looking to earn passive income on their crypto holdings. Whether you choose Celsius Network, BlockFi, Nexo, YouHodler, or Crypto.com, it's crucial to conduct your due diligence and select a platform that meets your specific needs and goals.

Disclaimer

The information provided on this website does not constitute investment advice, financial advice, trading advice, or any other sort of advice and you should not treat any of the website's content as such.

Token Metrics does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.

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Even in a sluggish crypto market, meme coins continue to outperform many other asset classes. In 2025, these highly speculative assets are not only surviving—some are thriving. This blog examines the current state of the meme coin market, what’s driving the activity, and how on-chain data and crypto analytics can help decode the chaos.

Meme Coins: Still Relevant in 2025?

Despite a broadly bearish macro environment, meme coins remain among the few bright spots in the crypto market. In the latest Token Metrics research webinar, several meme tokens showed outsized returns, including:

  • Gorbagana – up over 50% in a day
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  • Startup Coin – nearly 9x returns over the past month

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Why Meme Coins Are Performing in a Bear Market

1. Low Liquidity, High Volatility:
Small-cap meme tokens can easily generate parabolic moves with modest capital inflows.

2. Community-Led Narratives:
Tokens like Useless Coin and Startup thrive on viral momentum from crypto-native communities, particularly on X (Twitter) and Telegram.

3. Whale Activity as a Signal:
Token Metrics analysts observed that whales have been accumulating select meme coins. This isn’t an endorsement—but it’s a data point. Monitoring on-chain whale behavior offers clues about where smart money is moving.

The Gobagana Case Study

Gobagana was cited as a high-risk Solana fork with minimal public information, yet it rapidly gained traction. On-chain analysis revealed:

  • Whale wallets accumulating in the early phase
  • Early VC insiders (e.g., those connected to Big Brain VC) engaging with the token
  • Rapid social engagement despite a small follower base

The takeaway? Even opaque meme coins can trigger major rallies—particularly if accumulation patterns align with social volume.

Risk Management and Red Flags

The meme coin market is not without risk. The Token Metrics team emphasized several cautions:

  • Illiquidity: Many meme tokens have low volume and limited exchange listings.
  • Exit scams or soft rugs: Teams can abandon the project after price pumps.
  • Price discovery volatility: Tokens may have no clear valuation baseline and can retrace sharply.

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How to Track Meme Coins Like a Quant

Using crypto analytics platforms like Token Metrics can help make sense of meme coin volatility. Tools that help include:

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  • Whale wallet tracking
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In 2025, data is more important than hype. While memes may dominate the narrative, only data reveals when the momentum shifts.

Meme Coins vs. Infrastructure Projects

Interestingly, while meme coins have been surging, many infrastructure or protocol tokens remain flat. This divergence suggests that retail attention is still focused on short-term speculation.

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Key Characteristics of Moonshot Tokens:

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  • Backed by Fundamentals – Even moonshots need solid technology, use cases, or backing.

How Do Crypto Moonshots Work?

Moonshots rely on the combination of innovation, market timing, and community adoption. They often start unnoticed, then experience exponential growth once crypto traders and influencers catch on.

The Lifecycle of a Typical Moonshot:

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  4. Parabolic Run – FOMO (Fear of Missing Out) kicks in, driving price up rapidly.
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To avoid the trap of hype-driven tokens, it's essential to use data and analytics, not emotions. That’s where Token Metrics becomes your secret weapon.

How to Use Token Metrics to Find Monshots?

Token Metrics is an AI-powered crypto analytics platform that helps you discover high-potential tokens with real-time data, grades, and backtested indicators. Here’s a step-by-step guide to using Token Metrics to uncover 100x opportunities:

Step 1: Go to the Ratings Page

Start from the main dashboard of the Token Metrics app.

  • Navigate to the “Ratings” tab.
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Pro Tip: Look for tokens with rising Trader Grades and strong historical performance.

Step 2: Click on the “Moonshots” Tab

Once you’re in the Ratings section:

  • Click the “Moonshots” tab at the top of the page.
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  • Live ROI Since Moonshot – Know exactly how past picks performed

Bonus Feature: Toggle to “Past Moonshots” to review previous winners and assess the track record of the platform.

Step 4: Choose a Token to Explore

Click on any token in the Moonshots list to open its Token Details Page.

Here, you can:

  • Analyze real-time charts
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  • See top holders and whale activity
  • Examine price volatility and volume patterns

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Token Metrics makes the process seamless:

  • Just click the “Buy” button on the Moonshots page.
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Why Use Token Metrics for Finding Moonshots?

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Key Benefits:

  • AI-Driven Insights – No emotional bias; just pure data analysis.
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  • Speed to Trade – Instant buy options right from the dashboard.
  • Performance Tracking – Evaluate your results based on entry/exit signals.

Real Examples: Token Metrics in Action

  • Euler Finance was flagged as a Moonshot before its 30% rally—validated by a bullish AI signal.
  • Morpho gained traction after appearing in the Moonshots list, later becoming a top TVL gainer.
  • Hyperliquid made the list before capturing major perp trading market share.

By combining early AI alerts with your own due diligence, you can position yourself ahead of the crowd.

Final Thoughts

Finding the next 100x crypto gem doesn’t have to be a guessing game. While the crypto space remains volatile, tools like Token Metrics help stack the odds in your favor. From real-time ratings to instant buy options and performance metrics, you have everything you need to make smart, data-driven bets on the future of crypto.

So if you're serious about turning small investments into big wins, start using Token Metrics to uncover moonshots before they go mainstream.

Try Token Metrics today and unlock the power of AI-driven crypto investing.

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Introduction:
The DeFi landscape is evolving rapidly, and 2025 is shaping up to be a pivotal year. With innovations like permissionless lending, the ecosystem is transitioning into what many are calling DeFi 3.0. This blog explores what’s driving the shift, the platforms leading the charge, and what investors and developers need to know about this new wave.

What Is DeFi 3.0?

Decentralized finance (DeFi) has experienced two major innovation cycles:

  • DeFi 1.0 was defined by protocols like Uniswap, which revolutionized decentralized trading through automated market makers (AMMs).
  • DeFi 2.0 introduced concepts like protocol-owned liquidity, led by projects like OlympusDAO.

Now in DeFi 3.0, the focus has shifted to permissionless lending, advanced tokenomics, and integrated liquidity solutions.

The Core Drivers of DeFi 3.0

  1. Decentralization of Lending Access:
    Traditional DeFi lending platforms like AAVE require users to hold governance tokens or pass internal gatekeeping to create new markets. DeFi 3.0 protocols remove those barriers, allowing anyone to participate more freely.

  2. Integrated Liquidity and Lending:
    New platforms are enabling liquidity provision and borrowing from the same pool—merging the utility of DEXs with money markets.

  3. Improved Capital Efficiency:
    DeFi 3.0 focuses on optimizing the use of locked capital. Through smart contract automation, platforms allow users to earn on idle funds, reduce slippage, and optimize collateral.

Leading Platforms in the DeFi 3.0 Movement

1. Euler Finance
Euler has grown to over $1B in total value locked (TVL) and is rolling out a key innovation: EulerSwap. This module lets protocols provide liquidity for both swaps and borrowing in a single pool.
Key features:

  • Dual-purpose liquidity (swap + lending)
  • “Just-in-time” borrowing mechanisms
  • Smart contract automation for optimized usage

2. Morpho
Morpho is another high-growth player. With support from Coinbase and over $4B in TVL, it's becoming a serious challenger to AAVE. Its permissionless lending architecture and novel liquidity provisioning model stand out.

3. Hyperliquid
While not a lender per se, Hyperliquid’s approach to perpetuals (perps) trading is noteworthy. It has captured 11% of Binance’s perp market share, signaling DeFi’s growing ability to challenge centralized platforms.

Why Permissionless Lending Matters

The benefits of removing centralized control over lending markets include:

  • Faster innovation and product launches
  • Greater financial inclusion for emerging projects
  • Risk-based pricing by the market, not centralized governance
  • Enhanced decentralization and resilience

However, challenges remain. The risk of undercollateralized positions and protocol exploits still exist. That’s why security—such as smart contract audits and on-chain firewalls—is critical.

The Role of Token Metrics in Tracking DeFi 3.0

During the webinar, the Token Metrics team highlighted how their platform tracks the performance of DeFi 3.0 projects using metrics like:

  • TVL growth rate
  • Trader grade and investor grade
  • Bullish or bearish signals based on 80+ data points

For example, Euler’s bullish signal flipped just before a 30% price rise, demonstrating the value of data-driven insight in volatile markets.

What's Next for DeFi?

As the cycle evolves, we expect:

  • A proliferation of permissionless lending protocols across L1s and L2s
  • Better capital efficiency tools
  • Greater interoperability across EVM chains and Solana
  • On-chain integrations with tokenized real-world assets

Final Thoughts

DeFi 3.0 is not just hype—it represents a fundamental shift in how decentralized finance operates. Permissionless lending, composable liquidity, and institutional-grade risk controls are turning DeFi into a more mature, scalable ecosystem.

As always, perform your own due diligence and keep an eye on platform fundamentals, smart contract risk, and ecosystem adoption.

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