3 Safe Alternatives To BlockFi
Several top-tier crypto lending platforms have found themselves in a pickle lately. BlockFi is affected by the recent bankruptcy filing of Three Arrows Capital (3AC), creating issues for its users. Now is a good time for affected users to look into more viable alternatives and ensure their funds are safe.
BlockFi Is In A Pickle
Many events in the cryptocurrency space can trigger a domino effect of sorts. The issues affecting Three Arrows Capital, which forced the company to file for bankruptcy, have compounding effects on crypto lenders like BlockFi. The lender finds itself stuck between a rock and a hard place and needs fresh capital to remain afloat.
Although it was rumored FTX would acquire BlockFi for $25 million – despite BlockFi being valued at $5 billion in 2021 – those have not been confirmed to be true. However, there is a need for new capital, and it remains unclear if BlockFi can find a willing investor or investors. The situation casts a dark shadow over decentralized finance, making the following alternatives all the more appealing.
Cake DeFi
From a convenience point of view, Cake DeFi has BlockFi beaten hands down. That convenient user experience leads users to explore lending and staking – which BlockFi also offers – but goes beyond liquidity mining, decentralized assets, and upcoming support for stocks. Cake DeFi offers a much higher APY potential, with interest payouts occurring every 12 hours. With BlockFi, users receive interest payouts monthly, making Cake DeFi a far more transparent solution.
Moreover, Cake DeFi has a custody system involving cold storage and multi-signature authorization to protect user assets. The end-user will remain in full control of their funds, as money is segregated from company funds as it should be. Furthermore, users have a flexible lock-in period, enabling them to withdraw funds at any time, although there are bonus returns for long-term commitments.
Nexo
One of the primary reasons why BlockFi users may want to look at Nexo is its broader support for fiat currencies and cryptocurrencies. BlockFi enables USD support, whereas Nexo has USD, GBP, AUD, EUR, and dozens of other fiat ramps. Moreover, Nexo’s crypto support spans several dozen assets, whereas BlockFi remains limited. Additionally, BlockFi offers lower interests in savings accounts and has little support for assets to collateralize loans.
Nexo, on the other hand, is suitable for both small and big loans and offers more competitive interest rates and rewards. Additionally, users can acquire a credit line through stablecoins or fiat currencies with low minimum thresholds, lowering the entry barriers. Additionally, it has more flexible repayment terms for loans, which will benefit its millions of users globally.
Gemini Earn
Although most people may not be aware, the Gemini exchange offers a way to earn interest on cryptocurrencies. Through its Gemini Earn solutions, users can put their crypto to work and earn up to 8.05% APY. Moreover, funds can be moved between Gemini Earn and the regular Gemini trading account at any time, with no minimums or fees. As Gemini is a regulated exchange and service provider, it provides an appealing option for users looking to earn interest on their favorite crypto holdings.
Moreover, Gemini Earn is – due to the NYSDFS – subject to capital reserve requirements and banking compliance standards, which are on par with TradFi. Most of the crypto funds locked in Gemini Earn are held in offline and air-gapped cold storage solutions. The funds in the hot wallet are insured against certain types of losses. There is a strong focus on security and accountability, which always benefits lending enthusiasts.
Explore Alternatives Today
There are many ways to engage in crypto lending today and the events affecting BlockFi highlight the need for better fund protection and companies not taking unnecessary risks by overleveraging their positions. The firms above all adhere to very strict standards and segregate customer funds from company assets to avoid any overlap and mingling.
Users have a responsibility to research lending providers properly and not just opt for the solution that offers the highest – and potentially unsustainable – returns. There is much more at stake than squeezing out that extra percent of earnings, as the risks should never increase exponentially to get to that level.
Image by S K from Pixabay
OhNoCryptocurrency via https://www.ohnocrypto.com/ @Bitcoinist, @Khareem Sudlow