Bitget Crypto Exchange Ventures into Crypto Loans Market Despite 2022 Sector Challenges
The crypto derivatives exchange Bitget has launched a new crypto lending program that will let users stake their own coins in exchange for loans in another.
The platform aims to cater to borrowers who are dissatisfied with traditional lenders, a press release from the firm said.
It explained that the new program, dubbed the Crypto Loans program, will enable borrowers to use their coins as collateral to secure loans of an equivalent amount denominated in another cryptocurrency.
Each loan is associated with a specific interest rate, and the maximum amount that can be borrowed is determined based on the market value of the staked collateral.
Staking, an activity that has recently been popularized by Ethereum’s transition to a proof-of-stake (PoS) blockchain, allows individuals to validate cryptocurrencies across different nodes.
By staking and delegating their crypto to validators, users can earn rewards, making the activity a potentially appealing passive income source.
Gracy Chen, Managing Director at Bitget, highlighted that the loan program offers borrowers an opportunity to expand their investment portfolios beyond the coins they currently hold.
“Users now have the opportunity to stake less-demanded coins, enabling them to obtain loans in more liquid assets for investment purposes,” she said, while adding:
“Our platform's flexible borrowing and repayment mechanism is designed to cater to the needs of all users, accommodating their requests and ensuring convenience."
While digital lending offers faster decision-making compared to traditional lending, it is not without risks, including the potential for hacking and fraud.
The sector has witnessed notable failures, such as Celsius, FTX, BlockFi, and Genesis, which all filed for
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