What does lending mining mean (lending is mining)?

What does lending mining mean? What does lending mining mean? It refers to the activity of lending money without a bank by using collateralized cryptocurrencies to earn interest. If someone wants to use digital assets for financial investments such as stocks and bonds, they need to provide funds to others. And this method can have benefits from the beginning.

Lending mining connects digital wallets with Bitcoin and creates an account for any services they offer to manage their finances and earn corresponding returns. For example, if you want to use your BTC to purchase ETH, use your Coinbase credit card or buy BTC using a debit card, etc. You can store these coins in a wallet under your control, but you can’t guarantee that the prices of these tokens will rise higher, and you can withdraw them at any time.

Lending is Mining

Editor’s note: This article is from 8btc.com (ID: bitcoin8btc), authored by Kyle, and is published with the Planet Daily’s authorization.

As the DeFi market continues to heat up, Ethereum’s lending mining projects have also reached a new breakthrough-the lending is mining model. After concepts such as borrowing and liquidity mining began to rise on Ethereum, digital assets represented by Bitcoin and Ether are rapidly becoming the targets of investors.

Currently, the value locked in DeFi protocols has exceeded $2 billion, with over 50% of the funds flowing into DeFi applications, and a large part of these funds are used for mining business.

In the DeFi field, users deposit their cryptocurrencies into wallets for trading or lending to earn interest. However, the yield is often low because the interest rates offered by some centralized platforms are calculated based on the borrower’s net amount and calculated based on the data provided by the borrower. For example, if a user requests a loan from an exchange and it requires a fee of up to 10% (usually 20%) as a return, the exchange will charge a commission of 5% from it.

In addition, when you purchase a certain token, your ETH will be locked in a smart contract and generate an ERC-20 token, which will be used to pay the loan fee. This may be good news for those who want to use the token.

But if users want to earn more income through lending, they can put these assets into their investment portfolios to generate higher returns.

Therefore, we believe that the lending is mining model is a new financial model designed to lower the participation threshold for users, improve the utilization of funds, and make investments more efficient. At the same time, the DeFi ecosystem also has the following features: 1. Permissionless and open, anyone can access DeFi services; 2. No collateral, fully trustless, and 100% transparent, anyone can do anything on it; 3. No rule-breaking behaviors.