- The global economic crash is causing people to flock to DeFi to earn interest and borrow money
Celsius, which is one of the biggest Decentralized Finance (DeFi) platforms, has exceeded 50,000 Bitcoins in deposits, which is worth USD 440 million.
Essentially, DeFi use has been increasing amid the Coronavirus Pandemic induced economic downturn. This is for a couple of reasons. First off, on DeFi platforms interest rates can be as high as 10% or even more for crypto deposits, and this is far more interest than banks pay. Indeed, bank interest rates are near 0%, and in some countries are slightly below 0%. Therefore, DeFi is actually one of the only ways in the world to earn a significant amount of interest from a deposit.
Further, people in need of money due to this economic downturn can use DeFi to obtain a loan via using cryptocurrency as collateral, and this sort of loan gives the option for people to access money now but also to buy their cryptocurrency back at a later date. This is the ideal solution for people who expect crypto to rally long term but need money now.
Thus, although most of the economy is in a free fall, DeFi is actually on the rise in a big way.
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