Cryptocurrency exchange Bitfinex has launched a peer-to-peer (P2P) funding portal facilitating borrowing and lending on the exchange.
The new feature, aptly named Bitfinex Borrow, allows users that hold tokens on the Bitfinex platform to lend out their crypto and obtain a rate of return.
Borrowers can also use their bitcoin or Ethereum holdings as collateral to obtain a loan in either tether (USDt) or US Dollars.
The move by Bitfinex to allow its users to effectively stake holdings and receive dividends comes after the success of yield farming protocols like Yearn Finance, which has attracted hundreds of millions of Dollars in staked cryptocurrency over the past few weeks.
💰$197,000💰Another HUGE Bitfinex Staking Milestone!
In the past 30 days, we paid $197K in staking rewards🔥
You can join and earn rewards too! Hold your digital tokens on Bitfinex to earn your staking reward ⬇️https://t.co/D3lMEjbUtU pic.twitter.com/LO7Ol6eIUe
— Bitfinex (@bitfinex) September 1, 2020
“There is a growing appetite among crypto holders to earn interest on idle crypto assets while there is also clearly a pent up demand for innovative funding products in the space,” said Paolo Ardoino, CTO at Bitfinex. “Bitfinex Borrow will facilitate responsible peer-to-peer funding among sophisticated users of digital assets.”
Borrowers can choose between a variable interest rate based upon the Flash Return Rate (FRR) or a fixed-rate loan.
The annual and daily interest rates, as well as total lending and repayment amounts, are automatically calculated based on the currencies selected, loan amount, borrowing period and preferred interest rate option.
Users can make a partial or full repayment on both the principal and interest rate of the loan by moving funds back into their Margin wallet, thereby reducing their daily interest rate. Users will have to manage their own risk of fluctuating bitcoin or Ethereum prices.
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