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A crypto loan is a type of loan that is backed by cryptocurrency assets. In a crypto loan, a borrower uses their cryptocurrency holdings as collateral to secure the loan, which is then issued in stablecoin (USDT).
This is a centralized loan feature. The former decentralized loan feature is being phased out, while the repayment section will be retained for a brief period of time for the previous loan subscribers.
The crypto loan service of LYOTRADE works in these steps:
- 1.Select the crypto collateral to give as a collateral (also called as mortgage/pledge) to the platform. You can select the BTC or ETH, and select the repayment period between 7, 14, 30 and 90 days.
- 2.In exchange, LYOTRADE deposits the borrowed funds in USDT into your spot wallet within a few minutes, available for immediate withdrawal
- 3.At the end of the loan repayment being fulfilled, interest will be calculated as on that period and you will receive your collateral back.
The platform keeps control of the collateral for the whole period of time. Although, if the rate of the collateral currency reaches the liquidation level, the collateral will be automatically liquidated, and the loan will be closed. It is impossible to return the collateral after liquidation – that’s why we will notify you multiple times when the current rate approaches the liquidation price.