Bybit Lending & Borrowing: Types of Lending Products That Suit You Best

The distinctions between the terms lending, loaning and borrowing are blurred by the broad interpretation and overlapping use of these terminologies. Furthermore, the perspective from which these transactions are used when a participant commits as either lender or borrower further complicates things, leading to the enigmatic question, “What are lending, loan, and borrowing?”

To mitigate confusion and clarify the respective roles and viewpoints of a lender and borrower, this article attempts to provide solid insights into this evergreen dilemma. 

Key Takeaways:

• Bybit users are encouraged to explore the different lending and loan services it offers to see which suits their risk appetite. 

• This article explores the differences between each lending product, highlighting purpose, mechanics and participation requirements.

• A comparison table will be provided to help you evaluate at a glance which of these lending products will fit your trading needs.

What Is Bybit Lending?

Bybit Lending enables users to lend their cryptocurrency assets to borrowers in exchange for competitive hourly interest payouts. Lenders can earn passive income by contributing funds to an asset pool. These pooled funds are then made available to traders who require additional capital to leverage their positions in the market, or to invest in Bybit Earn products.

To obtain a loan of cryptocurrency assets, borrowers are required to provide collateral according to the lender's specified conditions. Bybit serves as an intermediary, facilitating the matching of lenders with suitable borrowers and ensuring a secure and transparent process.

Bybit Lending offers advantages for both lenders and borrowers: Lenders can leverage on their unused assets to earn interest, while borrowers gain access to extra capital for activities such as margin trading or obtaining crypto loans. This additional capital can be used to potentially enhance their profits or provide a safeguard against market volatility.

What Is Bybit Crypto Loan? 

Bybit Crypto Loan provides users the gateway to meet their short-term liquidity needs by borrowing crypto assets without selling their crypto holdings. Participants can use their crypto assets as collateral, and pay interest in exchange for other coins like BTC, ETH or XRP, as well as stablecoins such as USDT and USDC.

The crypto loan amount is determined based on a percentage of the cryptocurrency you pledge as collateral, also known as loan-to-value or LTV. After borrowing an asset, you must repay it within the loan term, ranging from 7 to 180 days. 

Crypto loans are popular among borrowers when trading leveraged positions by expanding their margin availability to avoid liquidation. Borrowers leverage these loans to maximize their passive income by earning annualized yields.

UTA vs. Spot Margin Trading/Crypto Loans/Institutional Lending

The following table compares the differences between Bybit Lending and Loans and summarizes the product highlights at a glance.

The Bottom Line

Bybit Lending and Bybit Loans offer the safest, most flexible and transparent lending and borrowing environment for users to earn passive income and fulfill their liquidity demands in seconds. Depending on the purpose of these services, we highly recommend users research before use, as all investments come with risks. 

Disclaimer: The above content is strictly for educational purposes only. This is not financial advice. Should traders intend to use the products described, please seek professional advice before investing. This content will be used for translations. In any case of translation inaccuracy, the English version will prevail. 

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