Crypto Loans and Interest - Custodial companies (part 1)

This article should serve as a recap of existing operators in this field and their offers. Custodial loan companies generally offer higher security standards than DeFI operators and also lower loan rates.

Collateralized borrowing: many type of assets can be utilized in order to take out a loan. These assets include for example real estate, cars, business assets, and crypto assets.

Unless specified otherwise, all information has been captured from the main company website.

BLOCKFI - LOANS

If you are looking to use your crypto assets to secure a loan, the collateral amount is based on a 50% Loan to Value (LTV). Loans originate for a 12-month term.

BlockFi’s collateralized loans involve clients staking their crypto assets as collateral in order to borrow USD. As of today's date, they currently support collateral posted in Bitcoin, Ether, or Litecoin.

Margin calls happen when the value of the posted collateral decreases outside of a safe range. BlockFi’s first crypto margin call occurs at a 70% LTV. At that time, the client has 72 hours to post additional collateral to bring the LTV back within a healthy range. Clients can also pay down their loan balance to fix the issue. If your LTV reaches 80% LTV, BlockFi will liquidate a portion of the collateral to lower the LTV back into the safe zone

BLOCKFI - INTEREST ACCOUNTS

You have the option of opening an interest account and have your crypto assets earn you a return while holding them.

The BlockFi Interest Account (BIA) is an interest-bearing account, which provides market-leading yields to crypto investors who store their crypto at BlockFi. Clients can deposit crypto and they will be paid monthly compounding interest. Interest begins accruing the day after you deposit.

The interest rate offered is very attractive, especially when compared to national rates paid on fiat currency in savings accounts or CDs. From the BlockFi website as of 1/24/2021:

CELSIUS - LOANS

Celsius collateralized loans involve clients staking their crypto assets as collateral in order to borrow USD. Starting at 0.7% (APR), the interest rate offered depends on the Loan to Value ratio (LTV). Loans start from a six-month term.

The more collateral is posted, the lower the interest rate. For example, if you took out a $25,000 loan and put down $100,000 worth of digital assets, your annual interest rate would be 1%. If you took a $50,000 loan with $100,000 worth of collateral, your annual interest rate would be 7.95%.

As of today's date, they currently support collateral posted from 34 coins:

• Ethereum

• Bitcoin

• Dash

• Bitcoin Cash

• Bitcoin SV

• Litecoin

• Zcash

• Stellar

• OMG Network

• TrueUSD

• Gemini Dollar

• Paxos Standard

• PAX Gold

• USD Coin

• DAI

• Celsius

• 0x

• Tether

• TrueGBP

• TrueAUD

• TrueHKD

• TrueCAD

• EOS

• Tether Gold

• Basic Attention Token

• Binance USD

• Kyber Network

• Chainlink

• Matic Network

• Synthetix Network Token

• Uma

• Uniswap

• Decentraland

• Compound
  

Margin calls happen when the value of the posted collateral decreases outside of a safe range.

Celsius first crypto margin call occurs at a 70% LTV. At that time, the client has 12 hours to post additional collateral to bring the LTV back within a healthy range. If after the margin call the value continues to drop, making the Loan-to-Value Ratio (LTV) 80% or higher, they will sell enough of your crypto to bring the value LTV to 70% until you respond or the five hours expires.

CELSIUS - INTEREST ACCOUNTS

You have the option of opening an interest account and have your crypto assets earn you a return while holding them.

Celsius offers an interest-bearing account, which provides market-leading yields to crypto investors who store their crypto with them. Clients earn in Cel tokens at higher rates or in fiat at a lower rate. Examples from their website as of 1/24/2021: