How to Earn Interest on Litecoin?
Litecoin has been one of the ten largest cryptocurrencies by market cap for a long time now. Known for having a strong following among crypto enthusiasts, it is among the most popular cryptocurrencies in circulation today.
Litecoin hodlers have found hodling LTC beneficial as it delivered over 3000% ROI so far. But there's a way to earn more on your Litecoin holdings. By depositing your Litecoin holdings in an interest account, you can earn interest up to 8% APY on it. Follow the steps below to begin earning interest on Litecoin:
- Signup for an Interest Account
The first step to begin earning interest on LTC is signing up for an interest account. Go to the website of an interest account provider and visit their registration page. Enter your name and email address in the blank boxes provided on the registration page. Once you have entered the details, click on the submit button.
- Verify Your Account
After registration, you will receive an email with a verification link. Open the email and click on the link to verify your email address. Now, you must go through a KYC process to activate your account.
You will have to provide your personal details like address, government-issued ID card, and a selfie photograph of yourself holding the same card. Enter your details and upload the documents along with the photo on the KYC verification page. Now, click on submit. In most cases, you will receive an approval email within a few days.
Both sign up and KYC processes are required to earn interest from a centralized interest account provider. But if you are opting for a DeFi platform to earn interest on LTC, you won't have to sign up for an interest account or complete the KYC process.
To earn interest on Litecoin from a DeFi interest provider, you will need an online wallet like Metamask, Trust Wallet, etc. Connect your wallet with the DeFi platform and deposit LTC to your DeFi interest account. The interest accrual will begin once LTC is available in your account.
- Deposit Your Litecoin
Once you receive a KYC approval email from the interest account provider, your interest is ready for earning interest. All you need now is Litecoin in your interest account.
To deposit Litecoin, go to the page that provides all the supported deposit options on the platform. Once there, you will find the Litecoin or LTC option in the list. Click on it, and you will receive a unique Litecoin wallet address. Copy the wallet address and paste it in the Litecoin withdrawal page of the wallet where you are hodling your Litecoins.
After you have pasted the Litecoin wallet address, enter the amount of Litecoin you wish to withdraw and click on the withdraw button. You will receive Litecoin in your interest account soon.
- Start Earning Interest
Once you have completed the above three steps, you don't have to do anything else. Relax and watch your crypto holdings grow. You will earn interest up to 8% on your Litecoin deposit, depending on the interest account you choose.
Why Earn Interest on Litecoin?
Earning interest on Litecoin means multiplying your profits. It also means that you don't have to sell your cryptocurrencies to earn from them. All you have to do is deposit your Litecoin in an interest account, and the interest accrual will begin automatically. It is also far better than keeping Litecoin idle in your wallet.
Another benefit of earning interest on Litecoin is that the interest rate the crypto interest account providers offer is far more than what the traditional financial companies offer on fiat currencies.
- Easy Process
It is quite easy to earn interest on Litecoin. All you have to do is complete a few steps. It is a 3-step process: Signup, Complete KYC, and Deposit Litecoin. That's it! You don't have to do anything else.
The DeFi platforms have made it even easier to earn interest on LTC as there is no need to sign up for an interest account and nor do you have to go through a KYC process.
- Low Risk
Earning interest on Litecoin is among the low-risk options compared to the similarly high interest-paying financial instruments. The crypto lending platforms offer a part of their income to interest account holders. In return, they use funds of interest account holders to lend and charge a higher interest from borrowers. Most of them have a mandatory over-collateralization to manage the risks involved.
- Passive Income
Once you deposit LTC to your interest account, you will start earning interest, and that is the best form of passive income in the crypto space today. In a few steps, you can begin earning handsome returns on your Litecoin deposits. That's like a double bonanza as Litecoin hodlers will earn from the price appreciation of LTC and also receive interest payout on their Litecoin holdings.
Where can I earn Interest on Litecoin?
Litecoin is among the ten largest cryptocurrencies by market cap. Hence, there are quite a few options when it comes to earning interest on Litecoin. Among the available options, Nexo, Celsius Network, and YouHodler are the best ones.
Nexo is among the most well-known crypto interest account providers. With Nexo, you can earn interest up to 8% APY on Litecoin. But to earn 8% APY, you will have to meet their criteria.
First, you have to agree to receive an interest payout in NEXO tokens, the native token of Nexo. Next, 10% or more of your investment portfolio must consist of Nexo tokens.
You must also agree to lock in your Litecoin funds for one or three months. This type of account is known as a fixed account on Nexo. If you don't agree to lock your funds, you will earn only 7% APY on Litecoin. But you must meet the two other criteria.
On Celsius Network, you can earn interest up to 5.12% APY on Litecoin. But you must agree to receive an interest payout in CEL tokens to earn the highest interest rates Celsius Network offers on Litecoin.
If you are from the United States and its territories, you cannot earn interest payout in CEL tokens. It automatically disqualifies US residents from earning the highest interest rates that Celsius Network offers.
The US-based users of Celsius Network can only earn 4.08% interest on Litecoin. Users outside the US will also earn the same interest rates if they want to receive interest payout in Litecoin only.
With YouHodler, you can earn a 5.5% APR on your Litecoin deposits. YouHodler mandates no minimum deposit for earning interest on Litecoin, but it recommends depositing at least $10 worth of LTC, to begin with.
If you are a YouHodler interest account holder, you can use their multi-hodl feature to multiply your profits up to 10X. There is no lock-in period on YouHodler, and you can access your funds 24×7.
Is it Risky Earning Interest on Litecoin?
Yes, it can be risky to earn interest on Litecoin. The interest account providers pay you interest on LTC from their income, which they earn by lending cryptocurrencies and fiat currencies to borrowers. As the majority of their income comes from their lending business, there is a risk as these platforms also use user funds to lend and earn more interest. Most of these platforms mandate over-collateralization to obtain loans from them.
But a few outliers don't require over-collateralization, and if you opt for an interest account with such platforms, your funds will be at a higher risk. If their borrowers start defaulting on loans and the prices of collateral assets start going down, the platform will fail to recover the amount they loaned to the borrower. If that happens, the platform will fail to pay interest to their users and may not even be able to refund some part of their user funds.
If the number of loan defaults starts rising, the platform will go bankrupt. In case of bankruptcy, the interest account provider won't have funds to pay back the user funds. They will even fail to pay the interest amount they were liable to pay to their interest account holders.
Most of the interest account providers have insured their user funds today. But is it enough? It can be, depending on the insurance amount and the total user funds lost. If the insurance cover is enough to equal to or more than the entire user funds lost by the platform, every interest account holder will receive their full funds back. But if the insurance amount isn't enough to cover the total amount of user funds lost, the interest account holders will receive only a part of their funds.
If you want to earn interest on LTC safely, you must choose your platform wisely. You can check our honest reviews on interest account providers to know more about them.
What to Look for When Choosing a Platform?
It is crucial to choose a platform only after doing in-depth research. A platform must meet some specific criteria to make sure that your funds will be safe with them. The two most important criteria are interest rates and the credibility of the platform. Both of these factors are equally important.
You mustn't fall for the highest interest rates right away, as many new platforms without any credibility offer the highest interest rates. But these platforms are a comparatively riskier option. Also, check how long the platform has been active in the industry. The platforms that have been in the industry for a couple of years and offer better than average interest rates are usually a good choice.
Another thing that you must check is insurance. A platform must have insurance cover for its user funds. It is crucial as if the platform loses the user funds because of any black swan events like hacking or some other factors, the insurance company will pay the insurance amount to the platform. With insurance funds, the platform can repay the entire user funds lost to its interest account holders.
Now research the eligibility criteria that a platform has for earning the highest interest rates they offer. Some require their users to earn interest in specific tokens to become eligible for the highest interest rates.
A few platforms will require users to lock their funds for a specific duration to earn the highest interest rates. Also, check if the interest account provider has any minimum deposit requirements. Some platforms mandate depositing a minimum amount to earn interest.