Cut Out The Middleman: Decentralized Crypto Lending

How You Can Earn Interest From Lending Out Your Crypto

Photo by The New York Public Library on Unsplash

The bank industry is being revolutionized. Major disruptions to their business model are taking place with the DeFi (Decentralized Finance) Ecosystem.

In DeFi, there is no need for a centralized party that validates and authorises transactions which result in making the banks obsolete. The profits that a bank normally makes will be divided over the participants of the DeFi Lending Protocol.

This is the third part of the three-part series “Earn Passive Income With Crypto”:

• Providing Liquidity
• Staking Crypto
• Lending out your Crypto

Part Three: Lending

What is Decentralized Finance Lending?

Crypto lending explained (source)

The process works as follows:

• Investors deposits funds they wish to lend out.
• These funds are collected into a liquidity pool