Ever imagined that one day the world would be crazy for a currency which only has digital existence. Well, but it’s true today, not only this, the market has been evolving each passing day.
Now some cryptocurrency exchanges in India also permit their customers to lend the same.
Vault and ZebPay are two such exchanges providing this unique facility.
The two exchanges permit their users to lend Bitcoin (BTC), Ethereum (ETH), Tether (USDT), Dai (DAI), etc. The main objective would be to enable the customers to earn some passive income in the form of interest apart from the gains on fluctuations of crypto prices. The basic idea of the operation is that upon maturity, the interest earned would be credited to the clients’ digital wallet and the principal amount.
Firstly talking about ZebPay, allows its consumers to lend for a period of 7 to 90 days while the rate of interest would vary as per the respective term one chooses to opt for. For example, the range of interest could vary up to 3% annual return on Bitcoin and up to 7% on Ethereum and Dai. Whereas Vault gives the time range to be 30-90 days, giving an annual return of 6.7% on Bitcoin and Ethereum and up to 12.68 percent on DAI and Tether.
But as there are two sides to every coin, this also comes with specific cons. The main risk involved in this is the probability of one’s digital wallet being hacked, resulting in losing all investment. Though Naimish Sanghvi, founder of Coin Crunch India, claims the same chances are comparatively low due to technology enhancement. In addition to this, authorities from ZebPay claim to have the funds insured to minimize the risk in case of any mishap.
Moreover, there is no regulator body to monitor the newly introduced lending feature provided by the exchanges. Hence there exists a natural risk factor of this service being discontinued by the exchanges at any point in time.
In conclusion, experts advise you to lend only the amount that you can afford to lose.