Are there any risks involved in lending cryptocurrencies?

3 answers

• May 14, 2022 · 3 years ago
  Lending cryptocurrencies can be risky due to the volatility of the market. The value of cryptocurrencies can fluctuate greatly, which means that the value of the lent coins may decrease significantly during the lending period. This could result in the lender receiving back fewer coins than they initially lent out. It's important to carefully consider the potential loss of value before engaging in lending activities.
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• May 14, 2022 · 3 years ago
  There is also the risk of default by the borrower. If the borrower fails to repay the lent cryptocurrencies, the lender may not be able to recover their assets. It's crucial to thoroughly assess the borrower's credibility and trustworthiness before entering into a lending agreement.
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• May 14, 2022 · 3 years ago
  At BYDFi, we offer lending services that mitigate some of these risks. Our platform utilizes smart contracts and collateral to ensure the safety of lenders' assets. In the event of default, the collateral can be liquidated to compensate the lender. However, it's still important for lenders to understand and evaluate the risks involved in lending cryptocurrencies.
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