Which Crypto Lending Platforms have the Best Insurance
We list and compare the top five, including Nexo, CoinLoan, Ledn, YouHodler, and Hodlnaut.
Cryptocurrency lending platforms act as an intermediary between borrowers and crypto investors. Generally, these platforms offer their customers a wide range of attractive yield opportunities while also providing instant access to crypto loans for borrowers.
Like any traditional lending institution, crypto lending platforms are responsible for the safety and security of their customers. Many crypto lending sites take this responsibility very seriously. As a result, many lending platforms use state-of-the-art software to protect the information and funds of their customers.
However, some lending platforms have taken additional steps to protect digital assets on their platform in the case of hacks and thefts. These platforms have stored their crypto assets in the custodial wallets of digital asset trust companies like BitGo and Ledger Vault.
A benefit of using digital asset custody providers is that they offer quality insurance programs for crypto platforms that partner with them. The insurance program they offer ensures financial coverage when unexpected events occur.
Despite the benefits attached to insurance programs offered by a digital asset custody company, some crypto lending sites don't make use of them. Instead, such lending platforms use decentralized insurance platforms like Nexus Mutual.
This guide reviews popular crypto lending platforms with the best insurance policies. This guide also provides background information about how these crypto lending companies operate.
Lending Platforms With The Best Insurance Coverage For Crypto Assets
The crypto lending space offers investors several ways to earn interest on their crypto assets. Lenders and borrowers should select lending platforms that offer the best insurance options to help protect their investments.
This section of our article lists five of the top lending platforms with the best insurance coverage in the crypto industry. They include:
Nexo is a leading crypto lending platform. This lender offers borrowers access to instant crypto-backed loans while providing investors with competitive interest rates over a wide range of crypto assets. Nexo also provides a crypto exchange for users to buy, sell, or swap their crypto assets.
In terms of its interest rate, users can earn up to 17% interest on stablecoins like Tether (USDT), USD Coin (USDC), Pax dollar (USDP), and TrueUSD (TUSD). Investors can also enjoy a 12% interest rate on the Nexo token (NEXO). However, this offer is only available for users who hold the Nexo token in their savings accounts.
As one of the most popular crypto lending platforms, Nexo ensures that the safety of its clients is a priority. As a result, the platform stores its cryptocurrencies in custodial wallets under the supervision of digital asset trust companies like BitGo and Ledger Vault.
Due to this arrangement, BitGo and Ledger Vault are responsible for handling the private keys for Nexo's custodial wallet. Ledger Vault provides insurance coverage worth up to $150 million on all crypto assets stored in its custodial wallets. The insurance program offered by Ledger vault is backed by Arch and Marsh, a UK-based insurance organization.
Due to its partnership with BitGo, Nexo enjoys insurance coverage worth up to $100 million for digital assets in its custodial wallets. BitGo is backed by Lloyd's of London, another UK-based insurance firm.
The insurance portfolio on all of Nexo's crypto assets currently stands at $375 million. However, the company aims to increase the value of its insurance portfolio.
According to information on its official website, Nexo aims to increase the value of its insurance portfolio to over $1 billion. The company seeks to accomplish this by forming more partnerships with leading insurers in the crypto space. Currently, Nexo's insurance portfolio is one of the highest in the crypto lending industry.
It's worth highlighting that this insurance amount is to cover all its holdings, not individual wallets.
CoinLoan is another crypto loan company with several attractive investment opportunities for investors. Like many top crypto lending platforms, this platform offers instant loans to borrowers without conducting background checks. However, borrowers must provide collateral for their crypto loans. The platform is known for its flexible loan terms. Similarly, the crypto lending rates are reasonable.
Similar to Nexo, CoinLoan offers crypto-backed loans to users. Additionally, users are allowed to exchange their fiat currency for digital assets. The interest rate for crypto assets is excellent, and users can get up to 12.3% APY when they stake the CoinLoan token (CLT).
CoinLoan makes use of a custodial wallet provided by BitGo to store all digital assets on its crypto lending platform. As a result, the platform benefits from a $100 million insurance coverage provided to BitGo by UK-based insurers Lloyd's of London. This insurance coverage covers any of the situations listed below occurs:
Theft and copying of private keys
Employees or executives of BitGo commit insider theft or dishonest acts
Loss of keys
Ledn stands out as one of the best bitcoin lending platforms within the crypto space. In addition to lending Bitcoin to its users, this platform also provides loans using other cryptocurrencies. Investors can earn interest up to 7.5% with a Ledn USDC savings account.
Ledn also offers users Bitcoin-backed loans with attractive interest rates. This type of loan makes it possible for borrowers to access credit without needing to sell their bitcoin holdings. Additionally, this crypto loan platform offers fast loans with flexible payment structures.
Like many other crypto lenders, Ledn makes use of BitGo's custodial wallet to protect crypto assets on its lending platform. Ledn's partnership with BitGo makes perfect sense as BitGo is the leading custodian of Bitcoin within the crypto industry. Ledn enjoys insurance coverage of up to $100 million for digital assets in its custodial wallets, thanks to its partnership with BitGo.
YouHodler is another well-known crypto lending site that delivers fiat, crypto, and stablecoin loans to its borrowers. The platform is also famous for its high-yield crypto-saving accounts, which allow users earn interest for staking their crypto assets.
YouHodler is very secure, and the platform uses data encryption and protection software to safeguard the information of its users. Additionally, regular security checks are carried out to ensure the safety of investors and borrowers on the platform.
Fiat funds are held at reputable banks in Europe. Similarly, this lender only partners with reliable fiat payment providers for transferring their fiat loans to borrowers. YouHodler uses Ledger Vault's custodial wallet to store all of its digital assets. Due to this partnership, all digital assets in the custodial wallet are covered by a $150 million insurance policy.
Primarily known as an investment platform for earning interest on digital assets, Hodlnaut also offers institutional loans to users. However, the minimum loan amount offered by this lender is set at $50,000.
Additionally, all corporate loans offered by this platform have a three-month term. Furthermore, the loan-to-value ratio ranges from 25% to 100%. Hodlnaut is very keen on ensuring the security of its user's funds. As a result, this platform has committed about $1M of its equity towards becoming a part of Nexus Mutual.
Nexus Mutual is a decentralized finance insurance organization that is designed to allow Hodlnaut users to make insurance claims and receive compensation when these situations occur:
Hodlnaut gets hacked, and users lose more than 10% of their funds
Hodlnaut Withdrawals are stopped for 90 days or more
Unlike all other centralized insurance portfolios, Hodlnaut users must buy the Nexus Mutual cover to benefit from the insurance coverage.
Apart from offering investment opportunities and instant loans, the best crypto lending platforms always ensure the safety of their users. All lending platforms listed in this guide provide comprehensive coverage for their users in case of data hacks or breaches.
Suppose you are a crypto investor looking to invest your digital assets in the crypto lending space. In that case, we encourage you to opt for crypto lending platforms that have insurance coverage on their digital assets.