From “Cointelegraph”

June 6, 2025 11:10:00 AM:

Peer-to-peer (P2P) crypto lending allows individuals to earn interest by lending digital assets directly to borrowers on CeFi or DeFi platforms. Smart contracts in DeFi automate lending processes, but choosing the right platform requires evaluating factors like security, interest rates, and loan terms. Risks include market volatility, platform failure, and regulatory uncertainty. Earning passive income through P2P crypto lending has become popular among crypto holders.

Crypto P2P lending involves lending cryptocurrencies directly to borrowers, bypassing traditional financial intermediaries. This can happen on centralized platforms or DeFi platforms using smart contracts. Lenders earn interest while borrowers access funds without selling their assets. Liquidity pools in DeFi make lending scalable, with interest rates adjusting based on supply and demand dynamics.

Crypto P2P lending features crypto-based loans, smart contract enforcement, collateralization, and no traditional credit checks. Borrowers provide collateral, loans are managed by smart contracts, and funds are transferred directly to borrowers’ wallets. Platforms like DeFi platforms and CeFi platforms offer different lending experiences, with DeFi platforms being more decentralized and automated.

DeFi lending platforms are non-custodial, trustless systems managed by smart contracts, while CeFi platforms are operated by private companies and replicate traditional fintech experiences. DeFi platforms offer permissionless access and transparency but require technical literacy, while CeFi platforms offer easier onboarding and customer support but require trust in a central entity.

When choosing a crypto lending platform, consider security measures, interest rates, loan terms, and user experience. Security should be a top priority, and interest rates vary across platforms and assets. Loan terms can be open-term or fixed-term, and user experience can vary between platforms like DeFi and CeFi.

To maximize passive income through crypto lending, diversify across platforms and assets, mix short-term and long-term commitments, monitor performance and market conditions, review platform safety regularly, and stay informed on regulations. Having an exit plan is essential to navigate changing lending conditions and ensure a successful crypto lending strategy.

Read more at Cointelegraph: How to Earn Passive Income with Peer-to-Peer Lending