Depending on your outlook and where your digital assets are currently stored, crypto lending is either the best thing since bitcoin or money for old rope.
To its proponents, the rapidly-growing sector presents one of the most exciting and practical use cases for cryptocurrencies, as evidenced by its triple-digit annual growth.
To its detractors, crypto lending is merely rebuilding traditional finance on a blockchain.
The truth, as is so often the case, lies somewhere in between: crypto lending is both refreshingly new and comfortingly familiar.
On the one hand, the sector can be seen as a continuation of the sort of lending opportunities that were once taken for granted by savers the world over.
High single or even double-digit percentage returns could be enjoyed by savers who pledged their spare fiat to the custody of their bank.
Years of central bank erosion of interest rates, however, have reduced those returns to nothing and even to negative rates for many savers, who are now penalized for an activity that was once rewarded.
When viewed within this paradigm, crypto lending has emerged as a solution to a growing problem: if the banks won’t provide incentives to lend, their crypto counterparts will – and there have been no shortage of lenders and borrowers willing to accept their offer.
The giddying rate of innovation within the sector, though, suggests there’s more at play than merely a digital reimagining of traditional finance.