Training engineer, I quickly became interested in the field of finance. Convinced that decentralized finance has a bright future ahead of it, I participate in its democratization by developing Crypternon.

Crypto loan platform: comparison 2025

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The cryptocurrency market has experienced rapid development with the emergence of many decentralized loan platforms. Among the key players, AAVE , Compound , and Venus stand out like reliable loan and borrowing platforms in cryptocurrencies. This article aims to detail the mechanisms, advantages, and differences from these platforms, while answering key questions around crypto loans, interest rates management, and users for investors.

Table of contents

What is a loan of cryptocurrencies?

The loan of cryptocurrencies allows users to deposit a collateral in the form of crypto to obtain a loan in stablecoin or in other cryptocurrencies. On the other hand, lenders deposit their funds on these platforms to gain interest depending on supply and demand. This mechanism provides liquidity while retaining its assets in the form of cryptos.

How do crypto loan platforms work?

On platforms like AAVE or Compound , the process is simple. The user deposits a certain sum of cryptocurrencies as collateral (often higher than the value of the loan requested) from his wallet , which allows him to borrow an amount in stablecoin s or other cryptocurrencies.

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Concrete example of collateral

Take a specific example: you deposit 2 ETH , the value of which is at the moment T is $ 3,600. In return, the platform allows you to borrow up to 80 % of this value in the form of a stablecoin S, or approximately 2880 USDT . The exact amount you can borrow will depend on the platform and market fluctuations policy. If the value of your collateral decreases below a certain threshold, your position can be automatically liquidated to repay your loan.

Interest rate on crypto loan platforms: fixed vs variable

The interest rate mechanism on loan platforms may seem complex, but it is mainly based on supply and demand for liquidity . On platforms like AAVE , you can choose between fixed rates and variable rates .

Variable rate

Variable rates are adjusted in real time depending on supply and demand. The more requests to borrow a specific asset, the more interest rates for borrowers increase and, conversely, the more the interest rates offered to lenders will be high. This dynamic guarantees that the market remains balanced. For example, if many users useUSDT, loan rates will increase.

Fixed rate

Fixed rates on AAVE offer stability, but beware, they are not frozen for the total duration of the loan. Indeed, they can be readjusted if the market is experiencing a strong variation, but this remains relatively rare. Unlike variable rates that fluctuate regularly, fixed rates are established to provide predictability to the borrower. The latter knows that, for a certain duration, he will pay a stable rate.

Who are the main users of Crypto loan platforms?

Current borrowers on crypto loan platforms are varied the main are the traders :

  • Some traders use loans to obtain immediate liquidity without selling their assets.

Crypto loan platform

  • short -term trading opportunity He can therefore borrow stablecoin s to make a transaction while keeping his cryptos.

Comparison of Cryptos loan platforms: AAVE, Compound and Venus

AAVE , Compound and Venus platforms share many similarities, but each also presents notable differences that impact the user experience.

AAVE : the undisputed leader

Since October 2023, AAVE has positioned itself as the most reliable loan platform with constant growth in its TVL (Total Value Locked) . This rise in power is due to its ability to take charge of a wide range of assets, as well as its innovations such as Flash Loans (loans without collateral reimbursable in the same transaction). With regard to rates, AAVE offers its users the possibility of choosing between fixed or variable rates , flexibility that is not offered on all platforms.

In terms of asset coverage, AAVE supports more than 20 cryptocurrencies , ranging from major cryptos like ETH, BTC , USDC to A ltc OOS .

Compound: the simplicity of a variable rate model

Compound variable rate system , adjusted in real time. Unlike AAVE , Compound does not offer a fixed rate. The interest here is to benefit from advantageous rate when demand is low, but this also exposes users to unexpected increases.

Like AAVE, Compound is compatible with a wide range of active ingredients from different blockchains, although the platform is perceived as a little less innovative in terms of additional features.

Venus: specialist in Binance Smart Chain

Venus works exclusively on the Binance Smart Chain (BSC) , which implies that only the active ingredients available on this blockchain are accessible. This includes cryptos like BNB , ETH, USDT and even Polygon , but excludes cryptos strictly linked to other blockchains like Solana . This restriction impacts the user experience, especially for those who wish to lend or borrow assets from other major blockchains.

The fact that Venus is on the BSC, however, has an advantage: the transaction costs are much lower than on blockchains like Ethereum . This point can become important for users who carry out many transactions, as costs can significantly affect net earnings of lenders and borrowers.

Impact of transaction costs on Crypto loans

Transaction costs vary according to the blockchain used by the platform. For example, on the Binance Smart Chain or Solana , the costs are relatively low, which make them popular choices for those who wish to lend or borrow at a lower cost.

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These costs are directly borne by the user, whether lender or borrower. On platforms like AAVE or Compound, based on Ethereum , gas costs can sometimes become prohibitive, especially during the network congestion periods.

The interest of borrowing in stablecoins

One of the main advantages of borrowing stablecoin is the stability they offer compared to volatile cryptos such as BTC or ETH. Stablecoin is backed by a Fiat currency (like the USD for the USDT or the USDC stablecoin which makes it possible to avoid significant fluctuations of value. This represents an ideal solution for investors who wish to borrow liquidity while minimizing their exposure to market volatility.

Conclusion

The Crypto loan has opened new opportunities for investors seeking to maximize their assets without selling their cryptocurrencies. AAVE , with its impressive growth and its wide selection of assets, is undoubtedly the leader in this area. Compound remains a reliable option with an intuitive platform, while Venus is distinguished by its low costs and its specialization in the active ingredients available on the Binance Smart Chain .

Whether you are looking to access liquidity without selling your cryptos, or generating interest on your assets, it is essential to understand the mechanisms and specificities of each platform before starting.

Faq

1. Why borrow cryptocurrencies rather than sell them?

Borrowing cryptos provides access to liquidity without selling your assets, which can avoid tax events (such as the sale of taxable cryptos) and allow to keep cryptos whose value could increase.

2. What is the advantage of stablecoins for crypto loans?

The stablecoins, such as theUSDT or theUSDC, are less volatile than other cryptos, which makes it possible to borrow and lend without fear of significant fluctuations of value.

3. What is the most popular crypto loan platform?

AAVE is currently the most used and reliable loan platform, with constant growth in its TVL since October 2023.

4. Are interest rates on AAVE fixed or variable?

AAVE offers both fixed and variable interest rates, according to user preferences and market conditions.

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Noah

Training engineer, I quickly became interested in the field of finance. Convinced that decentralized finance has a bright future ahead of it, I participate in its democratization by developing Crypternon.