What are the risks and rewards of lending crypto on decentralized finance (DeFi) platforms?

1 answers

• Dec 16, 2021 · 3 years ago
  At BYDFi, we believe that lending crypto on DeFi platforms can offer both risks and rewards. On one hand, lending can provide an opportunity to earn interest on your crypto assets, potentially generating passive income. This can be especially appealing for individuals who have idle crypto holdings. However, it's important to be aware of the risks involved. The cryptocurrency market is highly volatile, and the value of your collateral can fluctuate significantly. This means that borrowers may not be able to repay their loans if the value of their collateral drops. Additionally, there is the risk of smart contract vulnerabilities or hacks on DeFi platforms. It's crucial to thoroughly research and assess the risks before participating in lending on DeFi platforms.
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