Cryptocurrencies have existed for a long time now, with companies inventing brand new ways to earn funds passively. An innovative new option has been getting traders good returns called yield farming, similar to staking.
Depending on the coin and the amount invested, returns will vary accordingly. Yield farming allows users to deposit cryptocurrency into a lending protocol to earn interest from trading fees. Users can also, later on, borrow other cryptocurrencies by placing collateral.
Featured on our list are some of the best crypto-companies to earn interest and yield returns.
Nexo is a cryptocurrency lender platform aiming to revolutionize financial systems and bring them to a new level. On the Nexo platform, you get Nexo tokens for depositing funds, which can be later on converted into crypto or fiat currencies.
The Nexo platform currently supports USD, EUR, GBP, Bitcoin, and Ethereum for depositing and earning interest.
As for loaning, Nexo requires users to store digital assets in their Nexo Account, used as collateral. Upon account verification, loan rates are being calculated. You can then instantly use your funds for trading or place them on your Nexo Credit card.
For Lending purposes, Nexo tokens get processed and borrowers get a 50% discount on their interest rate.
- High Yield bank account boasts a 12 % annual return
- Staking unlocks interest rates with more profit
- Users get a Nexo crypto debit card for spending their fees as they see fit.
- Security implemented with BItco so users are insured against theft or loss of keys
BlockFi is different from other coins in the list due to the fact that is centralized and intended for institutional and private clients. The protocol operates by lending users deposits from institutional and corporate borrowers who pay an interest to BlockFi which in turn pays its users. However user deposits are prioritized over other company equity to reduce their risk, they are not FDIC or SIPC insured. Depositing cryptocurrency on the protocol as collateral is also viable, capped at 50%. Users can withdraw their staked collateral as Fiat currency which is available to them without any taxes or fees. It should also be noted that BlockFI is a centralized company meaning they have control over your funds.
- Good support and security
- No fees on trading crypto although, some users have complained that the exchange rate is suboptimal.
- Lengthy withdrawal process (up to seven days)
- BlockFi interest accounts users get rewards with an 8.6 % annual interest on all their crypto deposits.
Celsius Network is another promising lending company, sharing similarities with Compound being a blockchain-based lending platform. By depositing to liquidity pools on Celsius you can earn interest. Borrowing is also possible in both fiat and cryptocurrencies.
Members can borrow against their crypto holdings in case they need fiat without jeopardizing their crypto-assets.
Celsius acquires higher interest rates than their competitors with zero fees for withdrawals sanctioned without any waiting period. But not everything is so great with Celsius as it is not FDIC insured therefore, you might lose your account if Celsius goes down.
- Native token Celsius gives several advantages including participation in governance and in the future gain interest on rate gained
- By depositing digital assets on the Celsius Network you can gain up to 9% interest with 5% always being guaranteed.
- Borrowed coins are insured in case of default and users protected by the Celsius lending protection pool
AAVE is a decentralized finance application that enables users to lend and borrow cryptocurrency similarly as banks lease money to their lenders. The AAVE company started in 2017 when a team of developers created something called ETH land, which then matched burrowers of ETH to different lenders.
In 2020 AAVE was formed with a new implementation of smart contracts to solve problems with matching buyers with lenders.
Using a brand new peer to smart-contract method, lenders could deposit crypto funds into smart contracts and earn interest. Similarly, borrowers could deposit their collateral to another smart contract and borrow from any smart contract they wanted. Using algorithms could decide loan rates based on the liquidity that was in each smart contract. You can compare investments and check liquidity for AAVE here.
- Resistant to Bitcoin price fluctuations
- Highest price return to record ($665.86) on Tuesday,18th of May 2021
- Safety Module – mitigates risks with shortfall events. In case of shortfall event 30 % of staked tokens that were staked cover the deficit
- Flash Loans- ability to access high staking loans without collateral which must take place in the same blockchain from where the amount was borrowed.
Compound is a decentralized financed of a defined protocol (DEFI) that lends pools for its users to earn interest on cryptocurrencies. The altcoin and company founded by Robert Leshner in 2017, has been praised for its innovative use of protocols. Compound operates by allowing lenders to provide loans and burrowers and locking in their crypto funds temporarily once inside a Compound protocol. The native token for Compound is Comp, which earns interest when transferring and trading money. Unlike AAVE, Comp tokens generate each time a user deposits their crypto assets into one of the compound’s protocols. The number of crypto assets deposited will determine your share of Comp Tokens, which can be later used as collateral when making a deposit.
If you are using an eth wallet you can create Comp while trading other crypto assets which remain redeemable and can earn you interest for the given cryptocurrency. Whenever a block gets mined, interest rates are to be determined by demand and supply change. You can borrow cryptocurrency with Comp as well, the only setback is that your collateral must be above the threshold of the amount you would like to lend. When you settle your loans your crypto assets will be available for trading.
Click here to check on the total supply and investment rates for Compound and other cryptocurrencies.
- Comp is best suited for DAI Holders, Privacy Focused Lenders and Institutions
- User Privacy- Compound users are not subjugate to verify their idenitity via KYC checks and do not need to provide any private information when logging in.
- No Lock Ups – Users of Compound can withdraw deposited crypto assets at any time with no penalties.
- Wallet support– The Compound protocol is integrateable with major crypto wallets including Ledger, Coinbase Wallet and Metamask.
MakerDao is different from previously mentioned altcoins and provides a few twists and turns for investing and earning interest. Maker or MKR is a governance, utility, and recapitalization token made by MakerDAO. Its primary purpose, closely tied to its stablecoin enacts the DAI token and provides governance in the DAI Credit system. Anyone holding MKR is a stakeholder and therefore is involved in decision-making within the Maker ecosystem. This cryptocurrency distinguishes itself from other collateralized stable coins in various ways. Maker Dao and DAI tokens are interchangeable and function as a failsafe protocol to balance lending and borrowing. Buyers generate DAI tokens through a collateralized debt position or CDP acting as a loan. When a buyer purchases Eth, a CDP is formed to be held as collateral against a position or CDP which acts as a loan.
- Failsafe – emergency shutdown – guarantees that all users on the platform receive their fair share of net value in case of serious threats
- Great for Retail Borrowers, Blockchain Focused companies & Businesses
- Offers Privacy and anonymity to all of its users
- Governance – MKR token holders can lock their tokens into a smart contract and vote on protocol upgrades and changes to the CDP platform.
By applying simple solutions for composability that empower DeFi platforms to interact in never before seen ways the Anchor Protocol is created.
Anchor Protocol is an open-source protocol available for anyone to use and save up on crypto. It is built on Terra’s blockchain giving stable and attractive yield earnings on user deposits.
Furthermore, to find more about Terra, click here.
To start using Anchor, deposit UST into the Anchor platform, and you will instantly get a 20% yield on your savings and increased interest.
- One of the first protocols which (claims) to offer a stable 20% yield on lending.
- No freeze protocol while funds get deposited- you can withdraw your funds at any time
- Ability to Integrate savings into your e-commerce company
- Simple open-source savings service code allowing for easy implementation in any financial application
Kava shares many other qualities with other companies on the list, being a decentralising lending platform but prioritising flexibility as its main feature.
What Kava brings to the table are distinctive traits implemented with strategic and cross-chain capacities encompassing the two main two products: Collateralised loans and stable coins. At any given circumstances, any user on the network can collateralise all of their digital assets for USDX’s Kava Stablecoin. By locking their deposits inside Kava’s smart contracts, users can gain leverage.
- Earn passive income with USDX bonds
- Fast transaction times.
- Governance – Kava utlity tokens offer decision-making for all holders for the critical decisions within the network.
- Unique Open network and support of many other altcoins encouraging future growth
JustStable brings both stablecoins and native tokens into operation with the help of DeFi ecosystems on the TRON network. Just stable has two eponymous tokens: the JST token and USDJ- a stablecoin pegged to the U.S dollar.
The Just or JST tokens have multiple functions within the network similar to other native tokens on the list. With JST, users registered on the TRON network can pay interest rates, participate in voting parameters and help maintain the platform.
To acquire Just tokens, you must deposit assets in the form of supported collateral tokens which are then exchanged into PTRX tokens and locked as collateral, forming a debt position.
The size of the amount deposited can therefore determine how much users can mint and withdraw USDJ to be used to pay back the initial collateral.
- User’s deposits are protected by smart contracts, with chain-actions being traceable, thus third party-audit is strictly prohibited.
- Holders of JST tokens can govern the Just community, providing governance on incentives, pooling efforts in order to build the next generation of DeFi ecosystems.
- Available for everyone without authorization from third parties making all transactions executed automatically by smart contracts.
C.r.e.a.m finance is an acronym for crypto-rules-everything- around-me. Cream finance is a decentralized peer-to-peer platform protocol that offers swapping, lending, and borrowing crypto assets.
If you are looking for a transparent, permissionless, and non-custodial company to invest in, then Cream finance is the right company for you. Cream finance works with smart contracts, given its focal point is on longtail assets with yielding rewards focusing on increasing capital efficiency for all digital assets in crypto markets.
Digital assets are open to exchange as long the users provide capital as collateral to borrow the supported currency.
- Cream tokens can be used to borrow, lend, swap, and govern the network by choosing which cryptocurrency to add to their markets.
- Supported currencies include all popular cryptocurrencies with defi tokens (YFI, SUSHI, Cream) and interest-bearing tokens.
- Once the staking period has concluded, rewards are issued.
Venus Protocol works with algorithmic-based money market systems, creating fully decentralized-finance-based lending with a credit system built on the Binance smart chain.
By pledging over-collateralized cryptocurrencies, users can utilize their crypto-assets in various ways. This provides several benefits as the lender will get a portion of interest annually, paid per block as the borrower pays interest on the borrowed asset.
The interest rates are set automatically around the Venus protocol with fluctuating rates on a specific market. The Venus protocol is different because it can employ both borrowings and minting using collateral supplied to the market. Not only that, but you can mint synthetic stablecoins secured by an overcollateralized position.
- Using the Binance smart chain allows for low-cost transactions costs.
- Excellent liquidity and access to deep networks.
- Borrow stablecoins and cryptocurrencies without any credit check
- Venus Token provides governance for the community
Alchemix is a cryptocurrency where loans pay for themselves. While this concept may be unthinkable in current financial systems with the potential of Defi it has become viable. Once you deposited DAI into the Alchemix vault, you can mint a certain amount from it and let the interest grow on that amount which automatically pays for your loans.
Minting is the computer process of validating information, where a newly created block processes information, records on the blockchain.
The synthetic protocol token (alUSD) is going to be backed by future yields. AlUsd is a stable coin and can be exchanged for any other stable- coin equating 1:1 with Us Dollar. Be wary as the AlCX created is currently reliant on Curve and Yearn and may result in a very long time for your loans to be paid off, although Alchemix offers the option to pay them automatically should you chose so.
- Farmers recieve ALCX tokens, which will have governance voting rights in the ecosystem.
- Deposits gain interest over time automatically paying off your loans
- Alchemix has not as of yet been fully audited and is not fully decentralised.
- Vaults provide yielding which then repays alUSD
Blockbank has existed since 2017 and is an upcoming project where CEFI integrates with DeFI all in one mobile app. The mobile application powered by artificial intelligence acts as a financial advisor that helps all users make decisions regarding their finance.
Although Blockbank hasn’t yet been officially released, the beta version of the mobile app is available on the android store. With the mobile application, you can use DeFi investing, swapping, check prices, interest rates, and integrate your wallet.
- The Artificial intelligence advisor helps make calculated risks and offers advice on maximizing gains based on user experiences.
- The utility token for BlockBank is the Bank token. They can unlock premium features on the app or implement cryptocurrencies toward staking.
- Users can earn up to 30% on APY from staking multiple assets in the app
- Blockbank always maintains token reserves to cover user rewards
Idle Finance is an upcoming decentralized protocol that will automatically relocate your digital assets towards the current best tokens.
The protocol works by packaging all of your crypto assets, stable coins, and altcoins alike and then refurbishing accordingly to rebalance funds depending on your strategy to yield and earn interest.
This bulk represents the investor’s proportional ownership of the pool and how much interest gained over time. This strategy, however, implies that Idle is not custodial and therefore owned by the company, which is not ideal for some users.
With the Idle protocol, each allocation of assets possesses its own set of tokens, cluttered onto a pool of yield-generating assets across several DeFI protocols.
- Depending on the investor’s choice, tokens can be distributed in two ways: Best yield and Risk-adjusted.
- The utility token is called Idle and can be kept opting towards a specific stablecoin or strategy.
When choosing the right Crypto company for your investment, you should always pay attention to the liquidity as well as the return rates, as well as the best option to get the most of your interest rates!
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Be advised to check up on other cryptocurrencies on the list for investment to try and find the Best crypto to earn interest and yield!