The proliferation of crypto lending platforms is the latest crypto solution bridging the gap with the traditional financial industry. These platforms offer institutional and retail investors the opportunity to access banking services previously only available in the traditional financial sector.

A typical crypto lending platform enables long-term crypto holders to put their tokens to good use by lending them for agreed-upon interest rates. Doing this beats the passive buy and hold investment strategy and users get access to interest rates that are higher than what the traditional banking sector offers. The financial services provided by these platforms is on par with the services provided by traditional lending solutions. For this reason, crypto holders are increasingly adopting lending services as a way to make passive crypto income. This has led to an explosion of crypto lending solutions aimed at satisfying growing demand.

While this growth justifies crypto’s viability and presents crypto holders with another avenue to make profits, it also complicates the process of determining which platform will best suit individual needs for potential borrowers and lenders. In this article, we will explore three of the leading crypto platforms and highlight the key differences between them to help those interested make a more informed decision. These platforms are BlockFi, Nexo and Celsius Network.

According to BitInfoCharts, 97% of wallets have less than 1 BTC, so the majority of the platforms have focused on retail investors.


BlockFi is a New York-based crypto lending platform. The startup has pulled off impressive funding rounds. In 2017, it raised $1.5 million in seed funding from Kenetic Capital, Consensys Ventures and SoFi. In 2018, the company was the first in the sector to receive an institutional credit facility from Galaxy Digital.

This year, it embarked on another round of funding, raising $18 million from Valar Ventures with participation from Fidelity, Susquehanna and numerous other strategic investors. BlockFi’s success in accessing financial backing has helped it in its quest to offer bank-like services to the unbanked.

According to BlockFi’s website, it takes an average of two minutes for users to access loans issued in USD on its platform that are backed by crypto assets. To borrow funds, all interested borrowers need to do is follow the sign-up procedure, enter the desired amount to be borrowed, and fill in the Know Your Customer and Anti-Money Laundering documentation. The platform will then instantly provide a loan offer. From there, the borrower deposits collateral in the form of crypto assets with BlockFi’s custodian, Gemini. When this is done, the amount requested is issued in fiat to the borrower’s account or sent as a stablecoin to the borrower’s wallet. Note that with BlockFi, borrowers will need to post at least 150% in collateral to receive a loan.

BlockFi partners with Gemini to store users’ assets. Gemini is an NYDFS licensed custodian, is Deloitte-issued SOC2-compliant, and owns a cold storage facility. For assets in its hot wallet, Gemini has secured insurance from AON.

What are BlockFi’s limits and rates?

BlockFi’s loan rate is pegged at a reasonable 4.5%, with a 25% loan-to-value ratio. Loans run for 12 months, and come with an option to pay the loan off before the term ends or refinance the loan when it’s due. As soon as the loan is repaid, the asset deposited is transferred back to the borrower. The only time the platform can choose to permanently and legally keep the collateral is when a borrower defaults on a payment.

Users of a BlockFi Interest Account can access interest rates as high as 8.6% when they deposit their crypto assets for others to borrow. Interestingly, BlockFi announced in September that it had removed the minimum deposit required before users can start earning interest.

BlockFi in interest account

On every Bitcoin (BTC) deposited into BlockFI, users are eligible to receive 6% in interest, which compounds to a 6.2% annual percentage yield, while the rate for Ethereum is pegged at 4%. When compared to the other platforms reviewed, it was clear that these rates are the highest. For instance, if 1 BTC is deposited with BlockFi for 10 years, and the price of Bitcoin stays at $10,000 throughout the duration. After compounding the interest, using the standard formula for compound interest, at 6.2% APY, the account will earn 0.819397 BTC. This beats a model that relies on rates based on simple interest calculations.

Of the three platforms compared in this post, BlockFi is the only one that does not have clauses promising different rates for token holders. In other words, users do not have to own or pay with a native coin to access the platform’s low rates. They are not urged to buy tokens that have no use outside of BlockFi’s platform, nor come under regulatory scrutiny as to whether those tokens are a security or not. Also, it saves them from worrying about the volatility of an extra coin. Lastly, it saves them from the hassles that come with reporting taxes on their primary coin (BTC or ETH) and the native token, which must be done separately.


BlockFi has embarked on various partnership deals to improve the platform’s liquidity. For one, the startup chose a licensed custodian, Gemini, to hold all deposited crypto assets. It has also teamed up with a third-party loan servicer, which is charged with managing loan contracts and repayments.

According to a report released in April, BlockFi has over $53 million assets under management. It is worth mentioning that BlockFi is planning to add more currency pairs to its platform, starting with the incorporation of the USD/LTC pair before the year runs out. There are also plans to launch a mobile app in the first half of 2020, which will make it easier for users to monitor their accounts and make deposits and withdrawals.

Celsius Network

Celsius Network operates very much like BlockFi, as it allows lending and borrowing without the hassles plaguing traditional lending platforms. Here, users get to take out loans in euros, dollars or stablecoins. Unlike BlockFi, Celsius Network operates an ecosystem where depositors are entitled to 80% of its revenue.

The startup’s marketplace has institutions as the entities accessing loans, while individuals are usually the lenders. This model contradicts conventional financial systems that have institutions supplying funds. As revealed in a publication, Celsius Network allegedly onboarded over 100 active institutional accounts in the first half of the year. Celsius has enlisted two custody solutions for its digital assets. The first is BitGo, which is fast becoming the go-to custodian for crypto firms, and the second is Fireblock.

From the information gathered from its website, there are no withdrawal fees, early termination fees, or default fees charged on the platform. The startup purported that the decision to enable a zero-transaction fee platform was to ensure that users get the appropriate returns on their investments.

Likewise, it recently launched its app to makes activities like depositing, borrowing, withdrawals, and account monitoring significantly easier. Also, the app comes with a feature named Cell Pay, which allows crypto onboarding at lightning speed. To get started, a user simply needs to select the coin he or she wants to send, enter an amount, create a link for the transaction, and send it to the desired contact. The recipient only needs to click the link and follow a simple procedure to claim the coin. This beats the lengthy method of waiting for the recipient to get a wallet and send his or her address.

Celsius Network’s rates

Celsius Network offers 8.95% as its loan rates. However, borrowers that intend to service their loans with the platform’s native token, CEL, can access rates that are as low as 4.95%. Owing to its goal to help users maximize their profits, Celsius Network is offering 8.15% as the interest rate on deposits disbursed in fiat currency, 4.3% on BTC deposits, and 3.75% on ETH deposits. However, native token holders have the opportunity to receive a 10% interest rate on their funds.


According to Cryptoslate, Celsius Network has processed over $4 billion worth of crypto loans. Another report revealed that it has over $375 million worth of assets under management. Furthermore, Celsius has incorporated’s trading platform into its ecosystem. This allows users to purchase a variety of crypto assets. Seeing as the platform has no lockup periods, users can withdraw their crypto whenever they like.

By and large, the launch of its app has optimized withdrawal speed. Combining this with the growing number of crypto pairs supported by the platform shows how serious Celsius Network is about providing wide coverage for the crypto community. At the time of this review, the network offers over 20 crypto pairs for its users.


Nexo is also a crypto lending service, which has adopted a business model similar to the one Celsius Network runs. Individuals deposit collateral and are instantly eligible to access a revolving credit line. According to a report, Nexo has given out loans worth more than $700 million to 200,000 clients since it launched. To ensure that the platform remains compliant, Nexo has implemented KYC procedures and partnered with Chainalysis to confirm that assets deposited are not sourced from illegal activities.

Nexo uses BitGo as its custodian. BitGo’s cold storage comes with an insurance policy that covers losses of up to $100 million through an arrangement with Lloyd’s of London. More importantly, it charges zero fees. Users are allowed to withdraw their funds or make deposits at any time. In other words, the platform has no lockup period. Like the other two platforms reviewed, this platform adheres to strict KYC and AML requirements. To do this, Nexo utilizes Onfido, a popular ID authentication technology.

Like Celsius, Nexo pays dividends to token holders on the profit generated by lending. Token holders receive 30% of the platform’s profits. Since its launch in May 2018, Nexo has distributed $3,321,645.84 worth of dividends — the highest amount of dividends ever paid out by a blockchain-based company. The annualized dividend yield is an impressive 12.73%, which surpasses all of the highest dividend-paying stocks in the S&P 500.

The platform offers 24/7 account fraud monitoring features for each coin deposited. Similarly, there is a rate calculator embedded on the website, which allows potential borrowers to calculate the daily, monthly and yearly earnings on a given deposit as well as the maximum amount they can borrow against their specified crypto collateral.

Nexo’s Rate

Nexo offers 11.9% as its loan rate while Nexo token holders have access to loans at a lower rate of 5.9%. For its interest rates, lenders make 8.00% on the funds made available to borrowers on the platform. Depositors get to earn daily, as the interest rate compounds. This provides a secure high-yield passive income without any fees or commissions


As mentioned earlier, Nexo claimed to have processed loans to the tune of $700 million. If this assertion is anything close to the truth, then the platform should offer high liquidity. That said, its partnership with Mastercard for its debit card launch makes it easier for users to spend money equivalent to the worth of their digital assets.


While there is a growing number of platforms offering crypto loans, the aforementioned platforms have shown remarkable results that justify their place at the upper echelon of the emerging market. That said, this article is merely the opinion of the writer and shouldn’t be taken as investment advice. As with all investment channels available to the crypto community, readers must carry out their own research before selecting the crypto lending platform that best suits their needs and goals.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Constantin Kogan is a venture partner at BitBull Capital and has been a cryptocurrency investor since 2012. He has over 10 years of experience in corporate leadership, technology and finance. He contributes to the digital asset space as well as the sharing and value economies.


Please enter your comment!
Please enter your name here