With crypto lending becoming a massive thing in the crypto space, many investors who like to steer clear from trading are looking for places to borrow and borrow out their crypto. With that, crypto lending platforms have become more popular as a solution for hodlers to hold their crypto still while making interest in it or borrowing out crypto.
Importance of TVL in Lending Protocols
According to a tweet by Ben GCrypto, when it comes to crypto lending protocols, TVL is the most important indicator to evaluate its adoption scale. To add, this can be done by calculating the total value locked in a particular corresponding smart contract.
When investing in a crypto lending protocol, the loans provider must have enough TVL that can be used as capital to lend out to borrowers. Like with banks, crypto lending protocols make money by lending out cryptocurrency.
Why Having a Large TVL Helps
The larger the TVL is, the more crypto a certain protocol is capable of lending out hence bigger profits. To add, a larger TVL also indicates a lot of trust in that particular protocol minimizing the chances of it falling to the ground.
Here are the Top 10 Crypto Lending Protocols by TVL
AAVE
- Cryptocurrency ticker: AAVE
- Total value locked: 13.12 billion USD
- Blockchain used: Ethereum
Anchor Protocol
- Cryptocurrency ticker: ANC
- Total value locked: 8.35 billion USD
- Blockchain used: Terra
Compound
- Cryptocurrency ticker: COMP
- Total value locked: 8.19 billion USD
- Blockchain used: Ethereum
Abracadabra
- Uses the MIM cryptocurrency
- Total value locked: 6.03 billion USD
- Blockchain used: Ethereum
Cream Finance
- Cryptocurrency ticker: CREAM
- Total value locked: 2.18 billion USD
- Blockchain used: Ethereum
Venus
- Cryptocurrency ticker: XVS
- Total value locked: 1.85 billion USD
- Blockchain used: Binance
JustLend
- Uses JST cryptocurrency
- Total value locked: 1.69 billion
- Blockchain used: TRON
Benqi
- Cryptocurrency ticker: QI
- Total value locked: 1.57 billion USD
- Blockchain used: Avalanche
TrueFi
- Cryptocurrency ticker: TRU
- Total value locked: 887 million USD
- Blockchain used: Ethereum
Geist Finance
- Cryptocurrency ticker: GEIST
- Total value locked: 701 million USD
- Blockchain used: Fantom
Read Also: Top Crypto Drops Dangerously Low to 15 on Fear and Greed Index | Market in a State of Extreme Fear at $42,868
Make Sure to Familiarize the Lending Protocol Network
When investing in a project or participating with a lending protocol, it is also important to know what blockchain they are built on. This is because having assets from one blockchain and having to bridge them to another blockchain could be quite taxing.
Although it would be possible to bridge assets, for example, from Ethereum to Terra, if users don’t do this efficiently, users will end up overspending on gas fees making the whole process a lot more expensive. Another thing important to note is that participants should also find the cheapest way to avail assets from each blockchain like Binance, Huobi, or others.
Related Article: Top Cryptocurrency Drops to $46.6K with as Fear and Greed Index Hits ‘Extreme Fear’
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Written by Urian B.
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