Dubai-based crypto exchange Bybit has recently joined the likes of Binance and KuCoin in offering crypto lending services, allowing users to earn passive interest income on their idle cryptocurrency assets. Through their announcement on May 2, Bybit has introduced a platform where users can deposit unused crypto into asset pools, which are then lent out to borrowers, enabling lenders to earn hourly interest payments of up to 16.46%.
However, the lending service is currently only available via Bybit’s app version 4.16.0 and above; though, they’ve promised to deliver the feature on their website soon. To protect lenders’ investments, borrowers on the platform are required to post collateral assets equating to or exceeding the loan amount.
Bybit CEO and co-founder Ben Zhou emphasizes the platform’s goal of providing users with opportunities to generate returns, while also giving advanced traders access to capital from lenders, thereby enabling more advanced trading options on the exchange.
There are a few caveats to Bybit’s lending service, as users are able to deposit and redeem their crypto assets at any time, given a few conditions are met. Firstly, there are minimum deposit amounts for each cryptocurrency used on the platform, such as 0.03 Bitcoin (BTC) and 0.05 Ethereum (ETH). Secondly, funds can only be redeemed provided that the service’s loan-to-pool ratio has not reached 100% and the user hasn’t surpassed their daily redemption limit.
In the event that the capacity isn’t available or the daily redemption limit has been reached, the lender must either wait for the capacity to become available or until the next day, respectively. Bybit’s introduction of lending services adds to the growing trend among crypto exchanges. For instance, Binance launched its lending services in 2019 and now offers numerous options for users to earn interest on deposited crypto assets.
Similarly, KuCoin provides lending services for a range of tokens. While OKX does not offer direct lending services, it does facilitate users borrowing funds on deposited tokens through their loan facility.
In summary, Bybit’s introduction of crypto lending services presents the opportunity for users to earn passive interest income on their idle cryptocurrencies. It also provides advanced traders with the needed capital to explore more advanced trading options. While there are certain limitations and conditions to be met, this expansion of services indicates a growing interest in crypto lending options in the market.
Source: crypto.news
