Cardano lending protocols are just one part of the Cardano DeFi landscape. Cardano lending protocols allow you to leverage your ada and other, select Cardano tokens - by using them as collateral - to receive loans. There are various ada lending rates available from the lending protocols listed here and the Cardano lending protocol you hear about most, or the one your friends tell you about, may not always be the best fit for your specific needs.
These Cardano lending protocols allow you to create Cardano collateral loans where, typically, you lock your ada up as collateral in a smart contract to receive, typically, stablecoins as a loan. You can also create Cardano flash loans (typically payable in one epoch), and there are even protocols that allow you to use your NFTs as collateral—commonly called Cardano NFT loans. You can find these protocols here.
The ada lending rate you receive is often algorithmically calculated, and can vary over the length of your loan depending on the utilization rate of the pool your loan came from.
So far we’ve only mentioned using Cardano lending to take out Cardano loans, using your ada as collateral. However, you can also become the bank and put your ada to work in these Cardano DeFi protocols by depositing it into the liquidity pools where Cardano collateral loans are taken from. Each protocol offers a different rate for the lender so make sure to check the rates (and utilization) on offer before committing your ada to a Cardano lending protocol.
Frequently Asked Questions
- Can I lend Cardano?
If you want to make money from your long term Cardano holdings then you can put it to work in a Cardano lending protocol to, potentially, make a return on these long term holdings. If you’re looking to use your Cardano as collateral to take out a loan then that can also be done in one of the same Cardano lending protocols—all listed here on this page!
- Can I use ADA as collateral?
Yes! There are multiple Cardano lending protocols that allow you to use your ada as collateral to receive loans; typically in stablecoins. Each lending protocol has its own rates, terms, and conditions so, depending on the length of the loan you’re looking for, amongst other things, one of many different protocols may suit you better.