Centralised Crypto Lending Platform Comparison: BlockFi vs Celsius vs Hodlnaut vs Nexo
In the brave new world of cryptocurrencies, there are some companies that offer cryptocurrency lending services where you loan your cryptocurrency out to certain borrowers to earn interest on your cryptocurrency.
If you are already familiar with how peer-to-peer (P2P) lending works – you should be able to understand how you can earn interest on your cryptocurrency.
You can actually loan out your coins on third party cryptocurrency P2P lending platforms like BlockFi, Celsius, Nexo and Singaporean company Hodlnaut.
In return for lending out your coins, you will be rewarded with a rate of interest that in many cases is significantly higher than what you can get through a traditional savings account.
Here are some of the best centralised cryptocurrency lending platforms to consider!
Disclaimer: The information provided by Seedly serves as an educational piece and is not intended to be personalised investment advice. Readers should always do their own due diligence and consider their financial goals before investing in any investment product. The writer may have a vested interest in the investments products mentioned.
TL;DR: Crypto Lending Platform Comparison
|Withdrawal Fee||1 free Crypto + |
1 free Stablecoin withdrawal per month
(worth of Crypto)
|1 free Crypto withdrawal per month (base tier)|
|Number of Available Coins||10||41||5||17|
|Lock-in Period||No-lock in|
|Minimum Investment Amount||-||-||Varies|
Max APY in kind
|Up to 5.5%||Up to 14%||Up to 6.2%||Up to 6%|
Max APY in kind
|Up to 9.3%||Up to 8.88%||Up to 10.5%||Up to 10%|
|New User Promo||Up to US$250 in BTC||US$50 - $2,500 in BTC + US$40 in BTC sign up bonus||US$20||-|
Also, here is an interest rate comparison of the major cryptocurrencies and stablecoins you can stake on these platforms.
|Cryptocurrency||BlockFi (APY)||Celsius Network (APY)||Hodlnaut (APY)||Nexo (APY)|
Do note that the percentages for these tables refer to annual percentage yield (APY) and the interest is given out in kind. This means that the interest is paid out in the same token that you have deposited.
Do note that information is accurate as of 5 June 2021. Interest rates are subject to change at the discretion of the cryptocurrency lending platforms without prior notice.
Cryptocurrency Regulation Singapore
As mentioned in my comparison of the best cryptocurrency exchanges, here are some things you need to take note of if you want to put your money into these crypto lending platforms.
Do note that although some of these crypto lending platforms allow you to buy cryptocurrency, the fees charged are quite high. Instead, you should consider buying the cryptocurrency from the above-mentioned exchanges and transfer them to the platforms.
In other words, there is no legislative protection or recourse for you if you buy, sell or loan out cryptocurrencies and something goes wrong.
MAS has made it crystal clear that:
- They (MAS) will not be able to help you in any way if you lose money from dealing with digital tokens that are not products regulated by MAS. This includes situations where the digital token service is provided by an entity regulated by MAS, but where the digital token is not regulated by MAS.
- If you choose to deal with an unregulated person or entity or invest in unregulated products, you will not be protected under MAS regulations. If you suspect that an investment scheme involving digital tokens could be fraudulent or is being misused for any illicit activity, you should report it to the police immediately.
- As for cryptocurrencies, persons that buy or sell cryptocurrencies, or facilitate the exchange of cryptocurrencies may be regulated under the Payment Services Act 2019. However, they are not required to protect your cryptocurrency and are not required to ensure that each cryptocurrency transaction is processed properly. MAS regulates cryptocurrency service providers under the Payment Services Act 2019 mainly for money-laundering and terrorism financing risk only.
This is made clear with this advisory that MAS requires DPT service providers to show to customers:
- Your DPT service provider is licensed by MAS to provide DPT services. Please note that this does not mean you will be able to recover all the money or DPTs you paid to your DPT service provider if your DPT service provider’s business fails.
- You should not transact in the DPT if you are not familiar with this DPT. Transacting in DPTs may not be suitable for you if you are not familiar with the technology that DPT services are provided.
- You should be aware that the value of DPTs may fluctuate greatly. You should buy DPTs only if you are prepared to accept the risk of losing all of the money you put into such tokens.
But things are changing.
On 4 Jan 2021, MAS announced amendments made to the Payment Services Act. Under the new enhancements, any entities that facilitate the transmission, exchange or storage of cryptocurrencies (DPTs) will now have to be licensed and will have to comply with wider rules and regulations set by MAS.
Minister for Transport Ong Ye Kung stated that these enhancements will give MAS the authority to implement user protection ‘when necessary,’ adding that ‘this could include, for example, requiring a DPT service provider to segregate customer assets from its own assets.’
And, according to a 4 Jun 2021 report from CoinDesk, MAS has received about 300 requests for payments and crypto exchange licences as well.
Also, one more risk you have to consider.
There is a saying in the world of cryptocurrencies: ‘Not your keys, not your coin.’
In other words, when you are loaning your cryptocurrencies to these exchanges, you are handing over the private keys for your cryptocurrencies and entrusting them to a third party.
Ultimately, the one who is holding the private keys to the cryptocurrencies decides how it’s spent.
This is why we would recommend you to store the private keys to your large cryptocurrency holdings onto your own cold wallet as it grants you complete control over your cryptocurrencies and provides better security as well.
With that out of the way, let’s dive into the crypto lending platforms I’ll be comparing.
1. BlockFi Review
First up we have BlockFi: an American cryptocurrency lending platform founded in 2017.
The company is privately held and has its headquarters in the state of New Jersey.
As of March 31, 2021, BlockFi claims that it has US$14.7 billion assets under management.
BlockFi Supported Cryptocurrencies
Currently, BlockFi customers can deposit their cryptocurrencies and earn interest on the 10 cryptocurrencies listed below:
|BTC (Tier 1)||0 - 0.5||5%|
|BTC (Tier 2)||> 0.5 to 20 BTC||2%|
|BTC (Tier 3)||> 20 BTC and above||0.50%|
|ETH (Tier 1)||0 to 15 ETH||4.50%|
|ETH (Tier 2)||> 15 to 1000 ETH||2%|
|ETH (Tier 3)||> 1,000 ETH and above||0.50%|
The interest is paid out at the start of the month while the interest earned by account holders compounds, increasing the yield you get with BlockFi.
FYI: According to Investopedia, APY refers to the real rate of return earned on an investment product as it takes into account the effect of compound interest.
Also, BlockFi uses a tiered interest structure where you earn less interest the more cryptocurrency you hold with BlockFi.
*APYs reflect effective yield based on monthly compounding. Actual yield will vary based on account activity and compliance with BlockFi’s terms and conditions. Rates are largely dictated by market conditions, which are a key factor in a company’s ability to provide its clients yield on their crypto assets.
One of the perks of Block-Fi is that you can withdraw your funds anytime.
BlockFi Withdrawal Fee
The company also offers one free crypto withdrawal and one free stablecoin withdrawal per calendar month.
But, do note that each free withdrawal can only be applied to one currency each month.
Also, any additional withdrawals are subject to a fee:
|BTC||100 BTC per 7-day period||0.00075 BTC|
|ETH||5,000 ETH per 7-day period||0.02 ETH|
|LINK||65,000 LINK per 7-day period||0.95 LINK|
|LTC||10,000 LTC per 7-day period||0.0025 LTC|
|Stablecoins||1,000,000 per 7-day period||$10.00 USD|
|PAXG||500 PAXG per 7 day period||0.015 PAXG|
BlockFi Security and Regulation
BlockFi is one of the few cryptocurrency earning platforms that are registered and regulated in the U.S. Read more about their licenses and disclosures here.
Also, BlockFi’s assets are held with their primary licensed custodian Gemini Trust Company which is regulated by the New York Department of Financial Services.
Gemini also keeps most of its assets in cold wallets that are insured by Aon.
Gemini has also been awarded the SOC2 Type 1 compliance audit from Deloitte for its custody solution. You can also read more about Gemini’s security here,
But do note that the BlockFi Interest Account (BIA) is not a bank savings account nor a brokerage account, and ios not insured with the U.S. Federal Deposit Insurance Corporation (FDIC) or Securities Investor Protection Corporation (SIPC) protections.
Also, BlockFi claims that it only issues over collateralised loans mostly to hedge funds, institutional traders and exchanges, among other corporate partners.
Currently, BlockFi is running a promo where new users get up to US$250 worth of Bitcoin the more they deposit.
- Tier: 1 | Deposit: US$100 – US$249 | Payout: US$15 in BTC.
- Tier: 2 | Deposit: US$250 – US$999 | Payout: US$20 in BTC.
- Tier: 3 | Deposit: US$1,000 – US$4,999 | Payout: US$40 in BTC.
- Tier: 4 | Deposit: US$5,000 – US$9,999 | Payout: US$75 in BTC.
- Tier: 5 | Deposit: US$10,000 – US$19,999 | Payout: US$150 in BTC.
- Tier: 6 | Deposit: US$20,000+ | Payout: US$250 in BTC.
2. Celsius Network Review
Next up we have Celsius Network: a Blockchain-based lending platform that was founded in London, England back in 2017.
The company is headquartered in London and has over 200 employees in countries like the U.S., UK, Isreal, Cyprus and Serbia.
The company has over 485,000 total members in 100 countries worldwide and manages over US$10.4 billion in cryptocurrency assets which was verified in an audit by blockchain analysis company Chainalysis back in March 2021.
Celsius Supported Cryptocurrencies
Currently, Celsius Netowork customers can deposit their cryptocurrencies and earn interest on the 41 cryptocurrencies listed below:
|Coin Name||In-kind Reward Rate (APY)in CEL|
The interest is also paid out weekly.
Also, a perk of using Celsius is that there is no lock-in period.
Celsius Withdrawal Fee
As for withdrawal fees, you will be glad to know that Celsius does not charge any withdrawal fees or deposit fees.
Celsius Network Security and Regulation
The company has partnered with its custodians Fireblocks and PrimeTrust to provide insurance on digital assets held by Celsius.
However, some of the assets stored on the Celsius Network are sent out into hot wallets to borrowers to earn a yield on the cryptocurrency for its users.
Speaking of borrowers, Celsius claims that it requires its borrowers to deposit up to 150% collateral with Celsius to secure the cryptocurrency assets that are loaned out.
The company also claims to do extensive due diligence audits of the borrower’s financials and repayment ability.
Unfortunately, Celsius does not directly offer insurance on your loans as stated in their terms and conditions:
These Terms and the holding of Digital Asset relationship does not create a fiduciary relationship between us and you; your Celsius Wallet is not a checking or savings account, and it is not covered by insurance against losses. We may lend, sell, pledge, hypothecate, assign, invest, use, commingle or otherwise dispose of assets and Eligible Digital Assets to counterparties or hold the Eligible Digital Assets with counterparties, and we will use our best commercial and operational efforts to prevent losses.
Celsius Promo Code
Currently, you can get up to US$2,500 worth of BTC if you deposit and hold up to $250,000 worth of supported cryptocurrency assets for six months with Celsius.
Here are the instructions:
Transfer US$400 – US$250,000 or more of any supported asset(s) to your Celsius wallet and receive $50 – $2,500 in BTC. But, do note that there is a lock-in period of six months for this promo.
In addition, Celsius has a referral programme where new users get another US$40 worth of BTC if they transfer US$400 in their Celsius account and hold it there for 30 days. Simply search for a referral code to enjoy this promo.
Here are some of the terms and conditions:
- Funds must be transferred within 20 days of activating your promo code.
- You must maintain a wallet balance equal to or greater than your balance after completing your transfer of $400 or more.
- Withdrawing from your wallet within 30 days of completing your transfer may disqualify you from receiving your reward.
- Rewards are distributed after 30 days of maintaining a qualifying wallet balance.
3. Hodlnaut Review
Alternatively, you can consider Singaporean cryptocurrency lending platform Hodlnaut.
The company was founded back in 2019 by co-founders Zhu Juntao and Simon Lee.
The company also has over 5,000 members and manages about US$300 million in cryptocurrency assets.
Hodlnaut Supported Cryptocurrencies
Currently, Hodlnaut customers can deposit their cryptocurrencies and earn interest on the 5 cryptocurrencies listed below:
The interest is also paid out weekly, every Monday at 5 PM Singapore time.
You’ll be glad to know that there is no lock-in period as you can withdraw your cryptocurrency assets at any time.
Hodolnaut Withdrawal Fees
Unfortunately, Hodlnaut does charge withdrawal fees that are regularly adjusted according to blockchain conditions. Current fees are shown below:
But on balance, Hodlnaut does not charge any deposit fees.
Hodlnaut Security and Regulation
In terms of security, Hodlnaut has partnered with Fireblocks to secure your assets.
When funds are first deposited with Hodlnaut, they are received through the Fireblocks wallet infrastructure. On the backend, Hodlnaut will then access the funds and either transfer them to self-custody cold wallets or on-lend the funds to borrowers.
But, do note that there is no insurance protection for your Hodlnaut deposits which is common amongst other cryptocurrency wallets.
But, Hodlnaut users can get insurance cover for up to US$44 Million of their funds through Nexus Mutual’s Hodlnaut Custody Cover smart contract at a 2.6% premium.
Also, Hodlnaut claims that ‘its loans are over-collateralised by at least 130%’ and ‘they only lend to corporate entities with good credit.’ To hedge their risk, the company also diversifies and ‘lend out to more than one counterparty to reduce counterparty risk.’
Hodlnaut is also currently in the process of applying for an official license with MAS and has also received an exemption from MAS to provide their services in Singapore.
Not to mention that they have offices in Singapore and Hong Kong:
24 Raffles Place
838 Lai Chi Kok Road
Cheung Sha Wan
Kowloon, Hong Kong
Hodlnaut also has a referral programme.
You will need to get a referral link from your friend with a Hodlnaut account to receive a US$20 signup bonus when you deposit US$1,000 in your Hodlnaut account.
4. Nexo Review
Last but not least we have Nexo: a Blockchain-based lending platform that was founded in London, England back in 2017.
The company claims it has a little over 1.5 million users across 200 jurisdictions and has a little over US$4 billion assets under management.
Nexo Supported Cryptocurrencies
At the time of writing Nexo customers can deposit their cryptocurrencies and earn interest on the 17 cryptocurrencies listed below:
Unlike the other platforms, Nexo pays out interest on their coins daily.
There is also no lock-in period if you deposit your cryptocurrencies with Nexo.
However, there is a minimum deposit amount if you want to start lending your cryptocurrencies on Nexo.
Nexo Withdrawal Fees
Nexo does not charge withdrawal fees depending on your loyalty tier which is calculated based on the percentage of NEXO utility tokens you have in your portfolio:
- Base Tier (Up to 1% of your portfolio is in NEXO token): 1 free Crypto withdrawal per month.
- Silver Tier (1% – 5% of your portfolio is in NEXO token): 2 free Crypto withdrawals per month.
- Gold Tier (5% – 10% of your portfolio is in NEXO token): 3 free Crypto withdrawals per month.
- Platinum Tier: (>10% of your portfolio is in NEXO token): 5 free Crypto withdrawals per month.
Once the free withdrawal limit is reached, blockchain network fees that are determined dynamically according to market conditions will automatically be charged to clients.
The counter will reset on the first day of each month, after which you can make another set of free withdrawals.
Nexo Security and Regulation
Like the other cryptocurrency lending platforms, Nexo claims that it loans out your cryptocurrency assets on an over collaterised basis to approved institutional investors.
This means that your loans are secured with cryptocurrency assets backing them.
In terms of security, the platform is protected with 256-bit encryption used in the military.
Users’ assets are also segmented and secured using multi-signature cold wallets provided by Goldman Sachs-backed, qualified and audited custodian BitGo.
Also, BitGo has achieved a Cryptocurrency Security Standard Level 3 and is also SOC 2 compliant.
Is Nexo Regulated?
Nexo is well regulated and licensed in the countries it is domiciled in. You can read more about that here.