Cryptocurrency lending platforms act as an intermediary between borrowers and crypto investors. Most of the time, these platforms offer their customers a wide range of ways to make money while also giving borrowers instant access to crypto loans.
Like any traditional lending institution, crypto lending platforms are responsible for the safety and security of their customers. Many crypto lending sites take this responsibility very seriously. As a result, many lending platforms use state-of-the-art software to protect the information and funds of their customers.
Some lending platforms, however, have taken extra steps to protect digital assets on their platform in case they are hacked or stolen. These platforms have kept their crypto assets in the wallets of digital asset trust companies like BitGo and Ledger Vault.
A benefit of using digital asset custody providers is that they offer quality insurance programs for crypto platforms that partner with them. The insurance program they offer ensures financial coverage when unexpected events occur.
Despite the benefits attached to insurance programs offered by a digital asset custody company, some crypto lending sites don't make use of them. Instead, such lending platforms use decentralized insurance platforms like Nexus Mutual.
This guide reviews popular crypto lending platforms with the best insurance policies. This guide also provides background information about how these crypto lending companies operate.
Lending Platforms With The Best Insurance Coverage For Crypto Assets
The crypto lending space offers investors several ways to earn interest on their crypto assets. To protect their investments, lenders and borrowers should choose lending platforms with the best insurance options.
This section of our article lists five of the top lending platforms with the best insurance coverage in the crypto industry. They include:
- Nexo
- Ledn
- YouHodler
Nexo
Nexo is a leading crypto lending platform. This lender gives borrowers instant access to crypto-backed loans and offers investors competitive interest rates on a wide range of crypto assets. Nexo also provides a crypto exchange for users to buy, sell, or swap their crypto assets.
In terms of its interest rate, users can earn up to 12% interest on stablecoins like Tether (USDT), USD Coin (USDC), Pax Dollar (USDP), and TrueUSD (TUSD). Investors can also enjoy a 12% interest rate on the Nexo token (NEXO). However, this offer is only available for users who hold the Nexo token in their savings accounts.
Nexo, which is one of the most popular places to borrow crypto, puts the safety of its clients first. As a result, the platform keeps its cryptocurrencies in custodial wallets under the control of firms like BitGo and Ledger Vault that manage digital asset trusts.
Because of this agreement, BitGo and Ledger Vault are in charge of taking care of Nexo's custodial wallet's private keys. All of the crypto assets kept in the custodial wallets of Ledger Vault are insured for up to $150 million. Arch & Marsh, a UK-based insurance company, supports the insurance program that Ledger Vault is offering.
Nexo has a partnership with BitGo, which means that digital assets in its custodial wallets are insured for up to $100 million. Another UK-based insurance company, Lloyd's of London, is backing BitGo.
The insurance portfolio on all of Nexo's crypto assets currently stands at $775 million. However, the company aims to increase the value of its insurance portfolio.
Nexo's website says that it wants to increase the value of its insurance portfolio to more than $1 billion. The company plans to do this by forming more partnerships with leading crypto insurance companies. Currently, Nexo's insurance portfolio is one of the largest in the crypto lending industry.
It's important to note that this insurance amount is for all of its assets, not just for each wallet.
Ledn
Ledn stands out as one of the best bitcoin lending platforms in the crypto space. This platform lets its users borrow Bitcoin, but it also lets them borrow using other cryptocurrencies. Investors can earn interest up to 10% with a Ledn USDC savings account.
Ledn also offers users bitcoin-backed loans with attractive interest rates. This type of loan lets people get credit without having to sell their bitcoins. Additionally, this crypto loan platform offers fast loans with flexible payment structures.
Like many other crypto lenders, Ledn makes use of BitGo's custodial wallet to protect crypto assets on its lending platform. Ledn's partnership with BitGo makes perfect sense, as BitGo is the leading custodian of Bitcoin within the crypto industry. Because it works with BitGo, Ledn can get up to $100 million in insurance for the digital assets in its custodial wallets.
YouHodler
YouHodler is another well-known site that lets people get loans in fiat, cryptocurrency, and stablecoin. The platform is also famous for its high-yield crypto-saving accounts, which allow users to earn interest by staking their crypto assets.
YouHodler is very safe because it uses encryption and protection software to keep its users' information safe. Also, security checks are done regularly to make sure that investors and borrowers on the platform are safe.
Fiat funds are held at reputable banks in Europe. In the same way, this lender only works with trustworthy fiat payment providers to send fiat loans to borrowers. YouHodler uses Ledger Vault's custodial wallet to store all of its digital assets. Because of this partnership, a $150 million insurance policy covers all digital assets in the custodial wallet.
Conclusion
In addition to giving people the chance to invest and get loans right away, the best crypto lending platforms always make sure their users are safe. All of the lending platforms in this guide offer full protection for their users in case their data is hacked or stolen.
Imagine that you are a crypto investor who wants to put your digital assets into crypto lending. In that case, we encourage you to opt for crypto lending platforms that have insurance coverage on their digital assets.
