Crypto Lending: How to Earn Interest on Your Crypto and What You Need to Know

When you put your crypto lending, a system where you loan your cryptocurrency to others in exchange for interest payments. Also known as DeFi lending, it lets you turn idle Bitcoin, Ethereum, or stablecoins into passive income—without selling them. It’s not magic. It’s just money working for you, but on blockchain terms.

Think of it like a bank, but instead of the bank lending your dollars to a mortgage borrower, your crypto gets lent to traders, protocols, or even other users who need liquidity. They lock up extra crypto as crypto collateral, digital assets pledged to secure a loan and prevent default—usually more than the loan amount—to cover risk. If they can’t pay back, the system automatically sells their collateral. This keeps lenders safe, at least in theory.

Most people use stablecoin lending, lending USDC, DAI, or USDT to earn steady, predictable returns because their value doesn’t swing like Bitcoin. You can earn 5% to 10% APY on stablecoins—way higher than any savings account. But here’s the catch: you’re trusting a platform, not a government-backed bank. If the platform gets hacked, goes offline, or mismanages funds, you could lose everything. That’s why some users stick to well-known platforms with audits and insurance, while others spread their lending across multiple services.

It’s not just for holding. Some people lend to fund trading strategies, others use it to avoid taxes on selling, and a growing number treat it like a side job—checking yields weekly, switching platforms for better rates, and learning how to avoid scams that promise 100% returns. You’ll find posts here that break down real platforms, warn about dead projects pretending to lend, and show you how to spot the difference between a working system and a ghost app.

And it’s not just about earning. Crypto lending also affects markets. When too many people lend out their coins, less supply stays in circulation, which can push prices up. But if everyone rushes to withdraw at once—like during a crash—lending platforms can freeze withdrawals. That’s what happened in 2022 with major players, and it’s why smart users keep only what they can afford to lose in lending pools.

What you’ll find below aren’t generic guides. These are real reviews, breakdowns, and warnings from people who’ve tried it. You’ll see how one user earned $400 a month in USDC interest, how another lost $12,000 because they picked a fake lending site, and why some platforms that looked solid in 2024 are already dead in 2025. There’s no fluff. Just what works, what doesn’t, and what to watch out for before you click ‘Deposit’.