So far I have never sold my crypto assets for fiat cash in any exchange. Neither I’ve done vice-versa. I’m in the process of accumulating different crypto currencies. But what use are these crypto currencies if we can’t buy any product or service we desire, from these?

Why should we seek a loan on our crypto asset?

Well, we all know that crypto eco-system has not yet matured enough to enable our purchasing power to even let us compare it to fiat. So we ultimately need to convert these asset into fiat currency to meet our spending needs.

But it often happens, when we need to buy something, the ongoing crypto market rates do not match with our expectations and valuation at that time. If we withdraw / sale in a bear phase and convert our cryptos to fiat currency, we may be making a significant loss on our asset. So what are the options in front of us? This is where crypto-backed loans come to our rescue.

A couple of months back, I was looking for a service to get some liquidity by pledging my crypto assets. I came across several new projects on this concept; most of them were in the process of starting up. Those who were offering these services were either restricted to some countries or their minimum requirement was beyond my wallet size. Actually, I was looking for a micro-loan service and I couldn’t find any at that time.

Recently, I came across a post searching for a similar service. It occurred to me that many of us need such a service but don’t know where to look for. So I thought to look into this market once again.

Many projects are competing to give you a loan

I had forgotten the names of several upcoming projects in this domain. Looking in my phone, I found an app called Celsius. It is a project that intends to offer instant loans against crypto asset to anyone. It was the first such project I had discovered. So I immediately downloaded its wallet. But later I found several upcoming projects in this domain, so I thought it would be better to wait for all these competitive services to launch their products before I go shopping for a loan.

Aside Celsius, there are several projects in this field that are either live or under development like MoneyToken, Cryptopay, BlockFi, ETHlend, Unchained Capital, Crypto Lending Project, Salt Lending etc.

Of these, services like Unchained Capital has a minimum loan amount of $100K for people residing outside USA. For USA loans, the minimum is only $10K. Similarly, Salt Lending also seems to be serving bigger borrowers. Salt has an upfront cost for its Membership without any guarantee of an availability of a loan. That sounds ridiculous to me. The lending too is not instantaneous and needs approval, documentation and processing time etc. BlockFi too has a similar complicated process though they don’t have any upfront Membership requirements. These companies offer a limited choice of crypto assets and fiat currencies …mostly, only BTC and USD.

I love the peer to peer lending solutions like ETHLend, Crypto Lending Project and Celsius. These have a low cost of borrowing and minimal formalities. Celsius plans to offer loans as low as 9% p.a. interest and all loans are instant. Unlike most companies asking for a minimum loan of $10K or $100K, Cesius has a cap on maximum loan amount per user at $10K, which may be relaxed with the influx of higher funds.

So yes, for people like me, projects like Celsius and ETHlend better serves my needs.

De-centralized Platform ETHLend

I find decentralized middleman-free lending platforms like ETHlend quite interesting. Although I find lending rates a bit steep there and a somewhat limited choice of offers / requests; it will become better with its popularity.

Since this project is completely blockchain based, it offers a crypto-to-crypto lending only. The lending is only between Ethereum’s ERC-20 tokens. But this make a widest choice of tokens available for lending and borrowing. You are free to put your own rates and terms on offer and if someone accepts it, it’s a deal. Easy enough!

This also makes it possible to go Short on the market if you think any cryptocurrency is overvalued.

NEXO Platform

Yeah, this post won’t make any sense if I don’t mention about Nexo project here. I’ve been eyeing this project for quite some time now. Nexo portrays itself as “The World’s First Instant Crypto-Backed Loans”. This startup is a spun off from Europe’s leading Fintech Group founded in 2007 namely, Credissimo. Credissimo is a market leader in 2 countries out of 5 European countries it serves in the Online Consumer Lending segment.

The Nexo startup is backed by TechCrunch founder Michael Arrington. Nexo Wallet has joined hands with the leading blockchain custodian service provider BitGo to secure its customers’ crypto assets. With the launch of its lending platform last month, Nexo received requests in excess of $1 billion and the team is dedicating all efforts to serve this demand now.

Nexo currently accepts Bitcoin, Ether and Nexo coins as collateral but has plans to include several more coins soon. It is going to accept BNB tokens as collateral security from July 1st. Acceptability of WAX tokens as collateral was already announced in April.

If you hold NEXO tokens, you will get a discounted interest rates on your loans in addition to 30% profit sharing for staking them.

NEXO will be offering a free credit card soon, that will be attached to your wallet. You can use it whenever you want it, it will be like a pre-approved loan. How much easier it could get!

Deposits of NEXO Tokens in the Nexo Wallet becomes available before June 4, 2018. So if you want to use their platform, go here. It’s live!

What about the curb on Indian crypto-exchanges?

Ohh yeah, I almost forgot about the title I put on this post! Well, nothing much but many Indians are looking for alternative ways to get cash or fund their crypto wallets with fiat. So if you have a short term cash requirement, you can go for any of the crypto-backed lending services. The funds can be transferred to your bank account via SWIFT. But yeah, now a days it needs some declaration or reasoning for the transfer and also has a bank service charges.

I wanted to tell you that BlockFi is looking to expand its business in other countries. In an interview with Bitcoin Magazine its CEO Zac Prince told that he would like to offer access to cheap credit to markets like India where rates of interest are historically been on higher sides.

Aside this, once the first wave of projects get some traction, I feel, almost every big financial institution will eye the crypto market by the next year. So let’s not worry about liquidating our crypto-assets. Just keep accumulating it 😊