The crypto lending landscape currently comprises institutional lenders, exchange platforms, and Defi lending protocols, with loans broadly falling into the category of undercollateralized, collateralized (or overcollateralized), and flash. Borrowing against one’s crypto holdings has never been easier, and the difficulty of acquiring a bank loan – not to mention the generally unappealing terms – only serves to underline the value that smart contract-secured lending protocols represent.

Evidence of the strength of crypto lending is all around us. Late last year, DeFi project Aave raised $25 million from major venture capital firms blockchain.com and Blockchain Capital, and its native AAVE token has since become one of DeFi’s runaway successes, pushing the protocol’s Total Value Locked (TVL) past $5 billion. Collateralized lending platform Maker, meanwhile, has issued almost $2 billion worth of USD-pegged DAI stablecoin loans since launching during Bitcoin’s late 2017 bull run.

The ability for users to earn yield through lending crypto assets, or acquire loans in their preferred crypto without having to supply credit history and labor through an invasive application process, is undoubtedly helping to drive the adoption of virtual currencies. Crypto lending protocols directly match borrowers with lenders, with flexible repayment durations, favorable interest rates, and different assets accepted as collateral. Moreover, borrowers often get to choose whether they prefer fiat, crypto, or stablecoins.

And it’s not just individuals who are taking advantage of lending platforms: SMEs and enterprises can acquire loans (often to finance crypto projects) while firms with appreciable crypto holdings can generate revenue by locking up their wealth for a set period of time. Even unicorns can lean on loans: Bitfinex, the fifth-largest digital asset exchange by trade volume, acquired $750 million worth of loans from stablecoin platform Tether, creators of the popular dollar-pegged USDT. Individual borrowers, meanwhile, can use their loan to buy a property, pay for a holiday, or diversify their investment portfolio.