The DeFi (decentralized finance) ecosystem continues to grow rapidly. With various decentralized lending protocols and platforms, crypto users are able to earn interest and take crypto loans without relying on trusted intermediaries.
That being said, decentralized, non-custodial cryptocurrency lending platforms or DeFi applications in general are not risk-free.
DeFi apps have also been hacked a number of times, and in such incidents, it might be impossible for DeFi users to get their cryptocurrencies back due to the nature of decentralized applications.
Therefore, it would be wise to use trusted, popular DeFi apps, whose smart contracts are more likely to be audited thoroughly, and secure cryptocurrency wallets to minimize the risks while enjoying the DeFi.
3 best DeFi apps for lending and borrowing of cryptocurrencies
Compound is an algorithmic, autonomous interest rate protocol that allows users to earn interest and borrow Ethereum tokens with its own interface.
Compound is also used by many other applications that provides an interface to the protocol such as Coinbase Wallet, Dharma and TokenSets.
Compound is one of the top decentralized applications in terms of volume and it is the most popular DeFi app with over $200M of assets supplied to the protocol as of now.
Compound Interface can be used with Coinbase Wallet, Ledger hardware wallets and MetaMask. Before using the interface, you can check out the FAQ.
Aave is a new DeFi protocol launched on January 8, currently ranking among the top DeFi apps in terms of volume.
Aave is an open source DeFi protocol for lending and borrowing of cryptocurrencies. It also uses a decentralized network of price oracles by working with Chainlink to calculate lending rates.
The protocol also includes a new feature called flash tokens which allows users to borrow cryptocurrencies instantly without collateral.
Aave can be used with MetaMask, WalletLink and Fortmatic. For more information, you can refer to the this guide.
DeFiZap is a great dapp for beginners who are not familiar with cryptocurrency lending and other DeFi services.
DeFiZap allows users to use more than one DeFi platform with just one single transaction. It provides an easier and faster way to get involved in DeFi.
Depending on your investing style and strategy, you can pick a ”ZAP” and get instant exposure across multiple DeFi protocols without needing to deal with each DeFi app.
You can take advantage of these DeFi platforms and other ones to earn interest or get loans in crypto. At this stage, you shouldn’t be using DeFi apps, especially new ones, with an amount of cryptocurrency that you can’t afford to lose.
Getting a secure cryptocurrency wallet like Ledger Nano X that you can use to access decentralized applications is another essential way of keeping crypto assets safe. Check out the article below for the 6 best cryptocurrency wallets to access Ethereum, EOS and TRON dapps: