Altura (ALU) is a web3 gaming platform revolutionizing gaming with smart NFTs, AI-powered tools, and seamless blockchain integration for developers and gamers alike.

Over the years, the multibillion dollar gaming industry has undergone a significant shift with the emergence of 

 continues to revolutionize the way players interact with games.

Initially focused on integrating play-to-earn models and digital ownership, web3 

 projects have evolved into vibrant ecosystems powered by blockchain-based assets, such as 

 (NFTs), enabling true ownership and interoperability of in-game items.

With the onset of artificial intelligence (AI), we continue to witness the unlimited potential of technology in the gaming world. AI integration unlocks endless possibilities for the niche by bringing intelligence and adaptability.

 project that aims to elevate player experience by combining the power of NFTs with AI features to revolutionize how games are developed, played and monetized.

Let's learn more about how Altura is helping fuse the power of blockchain and AI technologies to unlock new possibilities in web3 gaming.

Altura is an all-in-one web3 gaming platform designed to leverage blockchain technology and AI to provide developers with everything they need to seamlessly create an interactive and engaging gameplay experience for their players.

Altura's robust SDK and API simplify the addition of web3 functionality to games, enabling seamless interaction with digital assets. Developers can launch custom marketplaces for their games without needing to write a single line of code, reducing complexity and the time required for development.

Among Altura's most outstanding features are its smart NFTs. Unlike traditional NFTs, which are static and non-transferable, smart NFTs are dynamic in-game assets that can evolve to level up with changing gaming conditions.

Furthermore, Altura guard provides developers with a secure and flexible way to authenticate users on their gaming apps while safeguarding their wallet keys. 

In early December 2024, Altura also unveiled an Intelligence feature that empowers developers with AI tools to create high-quality AI-powered games without hassle.

Altura operates across over 17 blockchain networks, including BNB Smart Chain, 

, making it a flexible and inclusive platform. When minting NFTs, you can easily switch between blockchains, using a drop-down menu on the site’s navigation bar. Gas fees for such transactions are paid in the native token of the network being used.

Altura enables developers to quickly build web3 games via its developer-friendly SDKs (software development kits) and APIs (application programming interfaces). 

Built for flexibility, Altura's SDKs cater to various gaming development needs. Its Unity SDK is optimized for the Unity game engine, offering developers read-only access to metadata, items, tokens and more. Meanwhile, the JavaScript SDK is ideal for both front-end and back-end integration, as it supports NFT minting and transfers with minimal coding. Both SDKs save time and resources, encouraging more developers to adopt blockchain technology in their games.

Altura’s developer-friendly APIs are designed to complement the SDK by facilitating secure communication with Altura’s back-end systems. This capability provides endpoints for developers to create, read, update and delete NFTs.

Gamers can mint and import NFTs on the Altura Marketplace, which is separate from the developer website. All the NFTs created on Altura are based on the ERC-1155 multi-token standard, allowing creators to generate dynamic smart NFTs (more on that below).

You can choose to mint NFTs with an initial supply greater than zero and list them for sale, or mint them with zero supply for a low-cost and more flexible experience through a process called lazy minting. When you lazy mint an NFT, it’s created off-chain and only minted when it’s sold, so the buyer bears the gas fees instead of the seller. Additionally, lazy mint functionality allows for whitelisting and tiered buying of NFTs, as well as other features.

Once you’ve minted NFTs, you’ll need to link them to your gaming project through the platform’s developer dashboard.

On its mission to simplify and revolutionize web3 gaming development, Altura offers a host of features to developers, as follows.

Smart NFTs are an innovative feature on Altura that developers can incorporate into their gaming projects. Unlike traditional NFTs, which are static, smart NFTs evolve based on in-game events or external triggers.

This dynamic functionality allows developers to create engaging and personalized gaming experiences. For example, a weapon NFT in a game could upgrade its attributes after achieving milestones, or a character NFT might gain new abilities after completing quests.

Additionally, Altura has introduced a more transparent form of loot boxes, in which players get to own the randomized in-game assets they collect as NFTs. By incorporating such loot boxes, developers can boost player engagement, drive retention and create monetization opportunities, while maintaining transparency through blockchain technology.

Altura Marketplace is a centralized hub where you can buy, sell or trade NFTs. Via the Marketplace, players can purchase their favorite in-game items, while creators have a platform on which to showcase their projects.

The Altura Marketplace is powered by the Seaport contract created by 

, which makes it more secure and gas-efficient than other marketplaces.

Altura also provides developers with a fully customizable white-label marketplace for their projects, complete with a project’s brand design.

Altura Intelligence is an AI asset generation tool that empowers game developers to create high-quality, in-game content and effortlessly deliver dynamic gaming experiences.

The first phase of Altura Intelligence offers a non-player character (NPC) engine, powered by advanced AI models, that facilitates the creation of immersive NPC experiences customized to a developer's game's parameters. In the second phase, Altura Intelligence introduces a custom Unity and Unreal Engine AI model in order for developers to easily create hyperrealistic worlds, and the NPC engine is upgraded to allow in-game NPCs to be tailored according to the players' interactions with the NPCs.

 that can be used seamlessly across Xbox, PlayStation, PC and mobile. AI technology is used to create flexible security, and allows only direct gaming transactions to be made. The fourth and final phase introduces an 

 that can perform a range of tasks, such as buying and selling NFTs, executing buy and sell orders, and even making travel-related reservations, such as flight and hotel bookings.

Altura Guard II is a security feature that introduces the use of social login and wallet connection to facilitate seamless connection across all 

 blockchains for ease of gaming transactions. Its wallet-agnostic approach allows users to transact via any wallet or social login. With Altura Guard II, players can use a simple five-word combination to connect to gaming apps. The feature uses a noncustodial login system that integrates various tech stacks, such as OpenLogin, Web3Auth and OAuth, to authenticate logins using social media accounts.

Altura Guard II is an upgrade from Altura Guard (Legacy), which lets a user enter their wallet address into an application.

Altura’s developer wallet is an essential tool for game creators. It streamlines the process of interacting with Altura’s ecosystem, allowing developers to effortlessly manage gaming assets, including minting and transferring NFTs.

Its intuitive interface eliminates the complexity of blockchain management, enabling developers to focus on creating engaging gaming experiences.

ALU is the native utility token for the Altura ecosystem, with a total/max/circulating supply of 990 million. The token is designed to leverage blockchain technology for seamless transactions between developers and gamers.

As the native token for Altura, ALU is used as the primary currency for transacting with various features on the Altura platform. You can use ALU tokens for in-platform transactions, such as purchasing in-game assets on the Altura Marketplace or unlocking AI features like the Altura Intelligence tools.

You can buy Altura’s ALU token on Bybit’s spot trading platform as the 

 Perpetual contract, with leverage of up to 50x.

As of Jan 28, 2025, ALU is trading at $0.0975, with a market cap of $96.52 million and a 24-hour trading volume of $36.28 million. Its current price is an 79% drop from its all-time high (ATH) of $0.46 on Nov 3, 2021, and a 3,699% increase from its all-time low (ATL) of $0.0025 on Jul 19, 2021.

Price forecasting experts are pretty bullish on ALU’s price. Price prediction experts at CoinCodex believe that ALU 

 a maximum price of $0.123 in 2027, and gradually increase to $0.407 by 2030. Meanwhile, technical experts at DigitalCoinPrice believe that ALU's price 

While these prognostications may seem bullish, they aren't financial advice, and they do not guarantee the future price of ALU. We highly recommend that you 

By seamlessly combining blockchain technology with gaming ecosystems, Altura empowers developers to create dynamic and immersive gaming experiences whereby players truly own their in-game assets.

The Altura platform's focus on smart NFTs that adapt and evolve based on in-game events introduces unprecedented utility and flexibility, setting Altura apart in the competitive landscape of blockchain gaming.

Altura provides a compelling value proposition for gamers: real ownership of digital assets, interoperability across games and the ability to monetize achievements in a decentralized marketplace. Furthermore, Altura empowers developers with tools to simplify NFT integration, enabling the creation of complex, engaging and interconnected game economies without requiring extensive blockchain expertise. Its use of AI technology also allows developers to integrate AI features efficiently into games, thus creating even more dynamic gaming experiences for players.

As the gaming industry continues its transition toward web3, platforms like Altura play a pivotal role in defining the future of interactive entertainment. With its innovative approach and strong vision, Altura has the potential to revolutionize web3 games and NFTs for years to come.

Intermediate

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Altura (ALU): Unlocking NFT Potential in Web3 Games

Network3 uses a decentralized approach to meet the growing computational demands of AI, offering a secure and scalable solution for developers and users.

Data drives the digital age, with AI leading the charge. Generative AI models like GPT-3 have revolutionized industries, but come with steep computational demands and costs. Network3 was created to address these challenges by decentralizing AI’s computational needs.

This article introduces Network3 and its vision of creating an efficient, sustainable and distributed machine-learning ecosystem.

 is a decentralized protocol designed to enable secure, anonymous and reliable data transmission and computation, making it easier to train and run AI models efficiently. It combines advanced AI and 

 to address the growing computational needs of AI and blockchain applications, while also boosting scalability and security in 

Network3 was founded by Rock Zhang, a seasoned entrepreneur and technology visionary with deep expertise in internet and AI infrastructure. Having played key roles in building companies like Boostinsider, iHealth Labs and Qihoo 360, Zhang brings a wealth of experience to this ambitious project. Network3 is designed to be a dedicated 

 for artificial intelligence, empowering developers to train and optimize AI models efficiently on a decentralized network.

The idea for Network3 emerged from the urgent need for scalable and privacy-first AI solutions. Traditional cloud providers often come with limitations, such as high costs and 

, as well as privacy concerns. Network3 tackles these issues head-on by linking devices worldwide into a distributed system. This decentralized approach reduces dependence on centralized cloud platforms, making AI more accessible and resource-efficient.

Distributing AI tasks across multiple devices allows Network3 to lower latency and strengthen user privacy, addressing critical challenges in today’s AI landscape. The project’s bold vision has attracted significant support, with $5.5 million in funding from major investors like Borderless Capital and Bing Ventures.

Decentralized networks face a critical challenge: the lack of reliable and secure data transmission. This limitation affects the performance and trustworthiness of blockchain ecosystems, leading to unreliable transaction exchanges, vulnerabilities in communication and a subpar user experience. As web3 continues to expand, existing 

 (DApps), but they fall short in providing a scalable and secure protocol for data exchange.

Network3 tackles this issue by developing a decentralized data transmission protocol designed to enhance the scalability and security of Layer 1 blockchains. The protocol strengthens the reliability of blockchain ecosystems by creating a framework that ensures efficient and secure data exchange. 

Network3 integrates several advanced features, such as an anonymous certificateless signcryption (CLSC) algorithm, a data correctness verification mechanism and an IP anti-tracking measure. These innovations support smoother transactions, enhance user privacy and improve system scalability, contributing to a more robust web3 experience. Network3’s efforts bridge a critical gap, making decentralized systems more efficient, secure and prepared for the future.

Network3’s decentralized protocol is designed to provide secure, anonymous and reliable data transmission and computation. By leveraging a network of distributed 

, Network3 ensures data privacy and enhances computational efficiency, making it ideal for modern AI and blockchain applications.

At the heart of Network3 lies the CLSC algorithm, which enables both encryption and digital signatures without relying on traditional certificates. This innovative approach ensures secure data sharing while safeguarding user anonymity. Additionally, a specialized smart contract, SCKGC, manages the generation of public parameters and the distribution of partial private keys, creating a secure foundation for communication.

Network3 integrates advanced features to create a scalable, efficient platform that meets the growing needs of AI and blockchain technologies, while prioritizing the following security, privacy and user incentives:

Network3 has achieved remarkable milestones since its inception, solidifying its position in the decentralized computing and AI landscape:

Looking ahead, Network3 aims to achieve several objectives in the near future:

N3 is the native token of Network3. It powers the ecosystem by enabling seamless transactions and incentivizing active participation, and is used for paying transaction fees, rewarding node operators for their contributions and unlocking premium services within the network.

The tokenomics of N3 are designed to foster long-term growth and sustainability, with a total supply capped at 1 billion tokens. Distribution is structured as follows:

Looking to trade Network3 tokens? Bybit now offers the N3/USDT Spot trading pair. To get started, you’ll first need to create a Bybit account, then fund it with cryptocurrency and navigate to the 

N3 appears to be a promising investment opportunity, particularly for those interested in the growing intersection of decentralized computing and AI with blockchain technologies. The project has already secured significant funding from prominent investors, demonstrating confidence in its long-term potential. In addition, Network3’s innovative approach to decentralized data transmission and computation, combined with its robust security measures, positions it to address key challenges in the AI and web3 spaces. 

The platform's scalability, along with its incentivized node participation, makes it an attractive proposition for developers and users alike, ensuring the ecosystem's growth and sustainability.

However, as with any emerging project, N3 carries inherent risks, particularly in the 

. While the platform’s tokenomics and strong infrastructure provide a solid foundation, the success of the N3 token is closely tied to the adoption and real-world application of Network3’s technology. Thus, while N3 offers significant upside potential, prospective investors must carefully consider the risks involved.

Network3 is a decentralized platform built to tackle the increasing demands of AI and blockchain technology. By connecting devices worldwide, it offers a more secure, scalable and privacy-focused way to run AI applications. 

With a strong network of nodes and substantial investor backing, Network3 aims to revolutionize the way AI and blockchain work together. The N3 token fuels the ecosystem, rewarding participants and helping to grow the platform. While the project shows promise, it’s important to note the inherent risks of investing in the fast-changing web3 blockchain space.

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Network3 (N3): Fueling AI Innovation With Decentralized Power

Abstract, a consumer-centric blockchain leveraging ZKsync's zero-knowledge stack and Celestia's architecture, has officially launched its mainnet to drive mass adoption. 

Daily Top Performer — AI Rig Complex (ARC)

The S&P 500 declined by 1.46% yesterday due to rising AI competitions concerns from Chinese startup. Gold fell to $2742 as investors favoured fixed income and defensive equities instead of bullion following a recalibration of future returns for the heavyweight US tech output. Coindesk Indices, was down by 1.92%, with Bitcoin and Ether dropping by 0.72% and 2.06%, respectively in the past 24 hours. Trade these markets and more with up to 500x leverage on Bybit MT5 using this 

Today's top performer is ARC, which surged 30.6% following ARC’s recent 

AI Rig Complex (ARC), founded in 2024, is an advanced AI agent framework built with Rust, designed to enhance human-computer interactions by integrating large language models (LLMs) for intuitive, context-aware applications. With its modular and scalable architecture, ARC enables seamless development of next-generation AI workflows, such as retrieval-augmented generation (RAG) and multi-agent systems, while leveraging Rig Framework's high-performance API. Recently, ARC tokens have surged in market performance, and its cutting-edge platform positions it as a leader in AI and web3 innovation.

Check Out the Latest Prices, Charts, and Data of 

Abstract, a consumer-centric blockchain leveraging ZKsync's zero-knowledge stack and Celestia's architecture, has officially launched its 

 to drive mass adoption. The platform is designed to eliminate barriers and simplify onboarding for users transitioning to Web3. With The Portal, a "digital theme park of fun," Abstract provides a seamless entry into the Web3 ecosystem, enabling users to access multiple decentralized applications and projects with just their email address. By integrating ZKsync and Celestia, the network enhances security, speeds up transactions, and brings Web2-level ease of use to blockchain technology.

Yesterday, BTC Spot ETFs experienced total outflows of $164.3 million, comprising $108.5 million from GBTC and $55.8 million from non-GBTC funds.

As Abstract doesn’t yet have its own token, users who interact with its 

 may qualify for a potential airdrop if a token is launched. Stay updated on potential airdrops and developments by following their social channels and newsletter.

Beginner

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Abstract Launches Mainnet to Simplify Web3 Adoption with ZKsync and Celestia Integration

Explore our article to find out how you can complete bbSOL Golden Maxi Rewards tasks to win rewards worth over $700,000 in SONIC, SSI, J and ALCH airdrops!

Lunar New Year is just around the corner, and Bybit is turning up the excitement with its bbSOL Golden Maxi Rewards campaign! This festive event offers users a chance to stake SOL, earn bbSOL and complete fun tasks to unlock Red Packet rewards worth over $700,000 in SONIC, SSI, J and ALCH airdrops.

Not sure where to start? No worries — we’ll walk you through everything, from explaining what bbSOL is to showing you how to complete tasks and maximize your rewards.

 token provided by Bybit when you stake SOL on Bybit’s platform. Instead of locking up your SOL and waiting for staking rewards, you receive bbSOL in return, which you can use for DeFi, trading or lending while still earning staking rewards.

How to Participate in bbSOL Golden Maxi Rewards

button at the top right corner of the page to connect your 

If you don’t already have a Bybit Web3 Seed Phrase Wallet, you can create one by downloading the Bybit Wallet Extension and clicking on 

Create Your Bybit Web3 Seed Phrase Wallet

to successfully connect your Bybit Web3 Seed Phrase Wallet

: Complete all tasks. Please note that you only need to complete the staking task once. Once you’re done, simply click on the corresponding 

: On the bbSOL Golden Maxi Rewards Bybit Web3 Airdrop Arcade campaign page, scroll down to the segment under 

task, and you’ll be redirected to the bbSOL landing page.

: Stake at least 0.5 SOL to obtain bbSOL. Then, click on 

: Refresh the page, and the staking task should be marked as completed.

: For the last task, read the campaign’s T&Cs in order to understand the Red Packet Rewards! 

task, and you’ll be redirected to the bbSOL landing page. If you’ve already completed the staking task previously for Sonic, simply refresh the page or click on the 

button, and this task should be marked as completed.

task, and you’ll be redirected to SoSoValue’s official website. 

: On the bbSOL Golden Maxi Rewards Bybit Web3 Airdrop Arcade campaign page, scroll down to the segment under Jambo. Click on the 

task, and you’ll be redirected to the bbSOL landing page. If you’ve already completed the staking task previously for either Sonic or SoSoValue, simply refresh the page or click on the 

 task, and you’ll be redirected to the page to complete the last task.

: On the bbSOL Golden Maxi Rewards Bybit Web3 Airdrop Arcade campaign page, scroll down to the segment under Alchemist AI. Click on the 

task, and you’ll be redirected to the bbSOL landing page. If you’ve already completed the staking task previously for either Sonic, SoSoValue or Jambo, simply refresh the page or click on the 

The bbSOL Golden Maxi Rewards campaign is a great way to make the most of your SOL while celebrating the Lunar New Year. By simply staking SOL, you’ll unlock the chance to earn airdrops from top projects like Sonic, Jambo, SoSoValue and Alchemist AI.

If you haven’t jumped in yet, now’s the time. Stake, complete tasks and claim your share of the $700,000 prize pool before the event ends. Don’t miss out — get started today!

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How to Complete bbSOL Golden Maxi Rewards Tasks for Bybit Web3 Airdrop Arcade

DeFi

Cryptocurrency lending allows investors to lend crypto to borrowers in return for interest payments. But what are the risks & should you invest in it? Learn more.

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Cryptocurrency lending is a feature of Decentralized Finance (

), in which investors lend cryptocurrencies to borrowers in return for interest payments. If you’re holding on to cryptocurrency with the expectation of future price appreciation, you might also receive steady passive income from your assets through lending. You could receive weekly or monthly interest when you deposit cryptocurrency in the wallet of a crypto lending platform.

On the borrowing side, crypto lending or crypto loan allows you to borrow fiat money (using your crypto as collateral) so that you won’t have to sell your cryptocurrency assets in an emergency. 

 refers to blockchain-powered financial applications, protocols, and platforms that can be used to manage money. These tools provide many of the same opportunities that traditional financial institutions do for fiat money.

Unlike the conventional financial system, 

 run without any centralized authority and are independent of banks, government-issued currencies, remittance platforms, and other traditional finance infrastructure.

DeFi offers an alternative to the existing traditional financial system and creates new solutions. It connects users in peer-to-peer (P2P) networks. This allows them to interact without knowing the other users because of underlying smart contracts, which safeguard each counterparty.

The smart contract that serves as the foundation for decentralized finance is transparent, open and self-executing, and doesn’t require supervision. Smart contracts can execute predetermined tasks, and users can access them using simple interfaces, as with regular applications. Because Etheruem was the first platform to introduce the concept of DeFi, most applications are built on the Ethereum blockchain.

Traditional lending and cryptocurrency lending both provide loans, but in different ways. 

A key feature of crypto lending is over-collateralization. Collateral is the security deposit pledged for a loan, and it can be liquidated in case of default. Over-collateralization means borrowers must provide up to twice the value of the loan amount they seek as a security deposit. Over-collateralization gives the lender comfort if the price of a highly volatile cryptocurrency crashes. 

 ensures lenders have a margin of safety. More importantly, borrowers don’t need a credit score to access crypto loans, unlike traditional bank lending. This means that cryptocurrency lending is more accessible to the under-banked, those with poor credit scores or without a credit history, and self-employed people who find it challenging to meet stricter traditional lending requirements.

While it takes several days of processing time for a traditional loan to clear, cryptocurrency loans are instant. 

What if you need money urgently but have most of it invested in assets? Selling those assets might incur capital gains taxes, and you would also miss any investment performance by dipping into investment capital. This is where crypto lending shines.

Decentralized lending platforms provide the opportunities to loan crypto without intermediaries. DeFi lending protocols enable lenders to earn interest on supplied digital assets while borrowers pay interest when taking the loan.

Let’s say you have 10 ETH, and an emergency that requires cash comes out of the blue. But you don’t want to sell any of your ETH because you’re convinced that prices are on the verge of soaring. You may also be afraid that if you liquidate any Ether now, you won’t be able to repurchase as much in ETH later. 

Here comes cryptocurrency lending to the rescue. Crypto lending platforms allow you to use your Ether as collateral and take out loans in USDT or any other 

. However, due to cryptocurrency’s volatility, you’ll have to over-collateralize the loan. That means you have to lock up significantly more ETH than the value you receive as a loan.

The lending platform will release your cryptocurrency once you’ve repaid the loan with the agreed-upon interest. And if the price of ETH has indeed appreciated, as you predicted, you will still have profited from it. 

You’ll only risk losing your cryptocurrency if you fail to repay your loan or if the value of your collateral (contrary to your optimistic outlook) falls below the value at which you borrowed.

Parties Involved in a Typical Crypto Lending Transaction

Cryptocurrency lending involves a borrower who needs liquidity but prefers to keep assets invested, a lender who wants passive income, and a lending platform. 

A borrower approaches a lending platform, such as Compound or Aave, for a fiat loan from a lender, using cryptocurrency assets like 

Once the lender and borrower have agreed to terms and conditions, including a specific interest rate, the borrower receives the cryptocurrency loan. Just as in a traditional bank loan, the lending platform releases the collateral to the borrower once the lender has been paid in full.

Cryptocurrency lending on DeFi crypto lending platforms lets borrowers and lenders interact directly without intermediaries. However, cryptocurrency lending is also available on 

 (CeFi) platforms such as Nexo and BlockFi.

In contrast to a DeFi platform, a CeFi crypto lending platform has a centralized organization with a legal entity backing it and managing the loan platform.

Cryptocurrency staking and lending offer opportunities to make money from your idle assets but in different ways.

 is the process of “locking up” a cryptocurrency asset to serve as a validator in a decentralized network. Validators maintain the security, integrity, and continuity of the network. The network encourages stakers (or validators) by rewarding them with new coins.

On the other hand, cryptocurrency lending pays interest as a reward for allowing the provider (or other users on the platform) to use your crypto assets.

While staking, on average, pays a lower return, it offers more security. Crypto lending typically pays higher returns, but the market is volatile, and rates change quickly.

Unlike traditional bank lending and CeFi crypto lending, Defi lending doesn’t rely on a central authority to oversee and enforce the loan’s terms and conditions. Instead, it relies on 

. Users can stake their crypto assets on the platform for lending. A borrower can directly borrow from the DeFi platform through P2P (peer-to-peer) lending, without credit checks. 

Getting a DeFi crypto loan is hassle-free. All you have to do is log on to your decentralized crypto lending platform, apply for the loan, and send your crypto collateral to a specified wallet. You don’t have to provide your personal information. You don’t need to worry about your credit score or any other documentation requirement. The most critical factor is the value of the crypto you’re offering as collateral and how large a loan it can get you.

That brings us to the loan-to-value (LTV) ratio. 

The loan-to-value ratio is precisely that: the ratio between the loan value and the collateral value. Let’s say you’re taking a $400 loan, and the LTV is 40%. In this case, you would need to put up $1,000 worth of crypto as collateral for a $400 loan, since $400 is 40% of $1,000. As compared to traditional finance, the LTVs for crypto lending or crypto loans, in general, is low due to the volatile nature of cryptocurrencies. For example, BlockFi’s LTV value goes to a maximum of 50% only. This may be a pass for investors, users who prefer to get bigger loans can benefit from the low LTV. As it helps minimize the risks of triggering a margin call. 

DeFi lending comes with a lending rate, which is the cost of borrowing. DeFi lending interest rates vary depending on the lending platforms, amounts, and the terms and conditions of the loan. DeFi lending platforms offer either fixed or floating interest rates.

A fixed interest rate means that you’ll pay a fixed (constant) interest rate throughout the loan tenor. In contrast, a floating interest rate varies according to the market — which means the rate can rise or fall at any time. When borrowing, fixed rates are typically higher than floating rates. Although floating rates can be lower, they may also shoot up at any time. This means that you have no way to know when, or how high, they’ll increase. 

Motivated by the dramatic increase in Bitcoin’s (and other cryptocurrencies’) prices, many investors aim to hold their positions and profit from an expected long-term market price increase. However, this buy-and-hold strategy, known as HODLing, throws up a challenge. What do you do when most of your assets are tied up in cryptocurrency — but you need physical cash?

Luckily, cryptocurrency lending solves this problem because you can hold your crypto assets and still spend fiat currencies. Cryptocurrency investors can borrow money against their holdings or lend their crypto in return for interest. Investors can also let their assets work for them to generate passive income.

As a lender, your cryptocurrency assets don’t just lie around in a wallet; they work and earn passive income for you. Here is why you should lend your crypto.

Cryptocurrency lending can provide returns without you having to sell any of your assets. Some exchanges currently offer annual percentage yields (APYs) as high as 25% to borrow your cryptocurrency. 

Sounds fantastic, right? Compare this with the best-yielding savings accounts in the U.S., which pay a paltry 0.55% average.

While you may lend any cryptocurrency you want, lending stablecoins allows you to grow your assets without the various risk associated with crypto. Stablecoins are cryptocurrencies that are designed to match the value of a real-world currency. For example, USDT is pegged to the US dollar.

The stability afforded by stablecoins also means you know how much you’ll earn from lending your crypto.

While crypto lending offers significant upside and lets your assets work for you, it’s not entirely without risks. 

Cryptocurrencies typically experience wide price swings. As a borrower, your collateral is subject to volatility risk because the platform can liquidate some of your collateral due to drops in market value. If you don’t respond to a margin call by adding more collateral, the platform will liquidate your crypto instantly to restore the LTV ratio of the loan to the agreed-upon level.

DeFi crypto lending platforms use smart contracts to manage your cryptocurrency lending transactions. Unlike CeFi platforms, no humans are involved in the operations. This means you don’t have anyone to rely on if the smart contract fails and you lose your cryptocurrency. Smart contracts and the functions they control can also be hacked or suffer security bugs.

Cryptocurrencies are a new asset class, and the regulations guiding them are still unclear. Lawmakers can decide to introduce new laws regarding legality or taxation, which may or may not be to your advantage.

You can speak to tax consultants in your jurisdiction for guidance to minimize this risk.

Again, DeFi providers don’t have any legal entity behind their platforms, and they operate without a license. This provides a unique problem from a legal perspective, as you don’t have anyone to sue when things go wrong. It also means investors don’t know how regulations might affect them in the future.

CeFi crypto lending platforms use the cryptocurrencies they receive from savers and borrowers to make money. They lend the crypto to counterparties — hedge funds, cryptocurrency exchanges, and other institutional investors. This creates counterparty risk because the counterparties to these transactions could fail to return the asset, making your provider insolvent. 

Investors on these platforms don’t know the risks their providers take with these transactions. In addition, unlike with traditional bank savings products, regulators such as the Federal Deposit Insurance Corporation (FDIC) in the U.S. don’t protect your cryptocurrency investments.

DeFi platforms only lend directly to borrowers on their platforms. They do not lend to third parties. This eliminates counterparty risk because collateralization is built into the smart contract. 

Lending cryptocurrency gives you the benefit of holding on to long-term investment performance while earning additional money passively. Loans are over-collateralized, and even if a borrower defaults, you’ll still have access to their cryptocurrency as compensation.

Cryptocurrency lending platforms offer high-interest rates, paid out weekly in some cases. Fiat and stablecoins earn the highest rates — up to 12.7% APY. Other major cryptocurrencies, like BTC and ETH, typically command rates as high as 6%. This is far higher than traditional banking interest rates.

Among the decentralized lending platforms, 

remain top with one of the highest TVL within the platform.

Image Source: DeFi Pulse — July 9, 2021.

Opportunities: Wide range of loan options and flash loans.

 allows borrowers to put up collateral to support the protocol. At the same time, their contribution is represented in aTokens. On the flip side, flash loans offer fixed interest loan rates.

Opportunities: Higher LTV rates and lower liquidation threshold

 allows lenders to earn interest by supporting the protocol. The amount of digital assets a user supplies is represented by cTokens. The tokens can typically be used to keep track of the fund’s loan as collateral and the interest earned. Interestingly, Compound only liquidates 50% of the under-collateralized loan, and the penalties come at a fixed rate.

 allow lending crypto to yourself. The Maker Vault is open for anyone to mint DAI by locking up your digital assets as collateral and paying back the loan based on the predetermined contract. Maker offers one of the highest 75% LTV rates for crypto loans.

Decentralized finance or DeFi is one of the most disruptive uses of nascent blockchain technology. By using self-executing smart contracts, DeFi replaces traditional institutions with platforms where users can borrow and lend money directly to each other, earning fees and interest in the process. While DeFi offers new opportunities to make money, it also improves the existing financial system by providing more trust, transparency, and efficiency. Still, always do your own research before lending crypto.

Explained: What Are Crypto Lending and Loans in DeFi?

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards