While staking is the most popular yield generation method, interest in lending is also growing, with the total amount in lending protocols now topping $10 billion.
Lending can also be particularly profitable, especially when stablecoins are used as collateral. On some platforms, current lending rates on USDT and USDC can be over 10%.
In the chart above, Aave (AAVE) is the leading lending platform, with just under $6 billion committed. Other popular platforms include Compound (COMP), Morpho (MORPHO), and Spark Protocol (a product of MKR).
With crypto prices on the rise, lending is likely to gain more attention as some traders look to leverage their positions. This added demand could increase lending yields, even as staking yields are trending lower.
Smart investors can invest in the leading lending protocols by buying and holding their tokens for the long term. |