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Types of Crypto Loans Empty Types of Crypto Loans

Wed Nov 23, 2022 5:25 pm
Mainly there are two main types of crypto loans, both have the following significant differences.

Centralized Finance
Centralized Finance (CeFi) loans are the most common option. Examples of CeFi companies include BlockFi, Celsius and Nexo. These companies hold crypto assets such as Bitcoin (BTC) and Ethereum (ETH) on behalf of their depositors.

CeFi companies have control over your holdings during the loan term.

Decentralized Finance
If you choose a Decentralized Finance (DeFi) loan, you are borrowing money from a decentralized application on a blockchain. You remain in control of your holdings, but your lender can repossess your holdings if you default. DeFi loans typically have higher interest rates than CeFi loans.
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