Crypto Loans: Borrow, Earn, and Manage Risk in DeFi

When dealing with crypto loans, short‑term or long‑term borrowing using digital assets as collateral. Also known as crypto lending, this practice lets you unlock liquidity without selling your holdings.

At the heart of crypto loans is DeFi lending, a permissionless system where smart contracts match borrowers and lenders. The protocol sets an interest rate based on supply‑demand dynamics, and borrowers lock up collateral, usually a stablecoin or a volatile asset, to secure the loan. This relationship—crypto loans → requires → collateral—creates a safety net for lenders while giving borrowers access to cash without triggering a taxable event.

Key Concepts Behind Crypto Loans

Understanding a few core entities helps you navigate the space effectively. Liquidity pools, collections of assets that provide the capital for loans and earn fees act as the engine behind most platforms. When you stake assets into a pool, you earn a share of the interest paid by borrowers, turning your idle crypto into a revenue stream. Another important piece is staking rewards, extra tokens given for providing security or liquidity to a protocol. Some platforms let you combine staking with borrowing, letting you earn rewards on the same collateral you’ve locked.

Risk management ties everything together. Liquidation thresholds, price points where the protocol sells your collateral to cover the loan protect lenders but can wipe out a borrower’s position if the market moves fast. Knowing the interest rate model, how rates adjust based on utilization and volatility lets you estimate costs before you pull a loan. In short, crypto loans encompass collateralized borrowing, rely on liquidity pools, generate staking rewards, and depend on dynamic interest rates and liquidation mechanisms.

Below you’ll find a curated set of articles that break down each of these pieces— from the math behind AMM‑based liquidity pools to step‑by‑step guides on securing your private keys, to deep dives on tax residency strategies that can affect your loan costs. Whether you’re a beginner looking to unlock cash without selling Bitcoin, or an advanced user comparing platform fees, the collection offers practical, data‑driven insights you can apply right now.