A Beginner’s Guide to Lending Crypto

The Crypto Credit Association helps to strengthen the global crypto lending industry.  By supporting the maturity and usability of crypto credit services and mechanisms, we help to drive adoption, which benefits customers – whether savers, businesses, or otherwise.

Unfortunately, crypto lending is still a very small part of the financial services ecosystem.  Users who are unfamiliar with crypto lending may believe that services are difficult and intimidating to access.  And while there is a lot of documentation on the Internet, much of it is written for people already familiar with crypto finance, or is out of date due to the fast moving nature of the industry and technology.  Investopedia is a good place to start for some basic concepts if you have questions.

This article is a very simple explanation of one way to lend crypto assets.  It assumes some very basic familiarity with crypto concepts; if you get stuck, Google is your friend.


1Lending and borrowing can be risky.  Never lend or invest what you cannot afford to lose, never borrow more than you can afford to repay. 

Even though crypto technology can make transactions safer, faster, cheaper, and easier than conventional finance, there is always a risk that you will lose money. 
Also, there is no such thing as a totally secure technology, whether it’s a bank system or a crypto protocol. Decentralized finance (DeFi) eliminates many traditional risks by removing human intermediaries and counter-parties from transactions. These people and institutions are replaced by software. Historically, software has been found to contain the occasional bug. This is the primary risk in DeFi. 

2This is not the only way to lend/borrow.  This is an example.
There are many platforms, including centralized exchanges and DeFi protocols, different tokens, different technologies, and more.  We do not endorse any of the examples we use, and we do not provide any support for them.  This is just to get you started.

3 – Make sure what you’re doing is legal where you live.
While it’s unlikely that crypto credit is illegal in a developed economy, laws do vary – it is your responsibility to make sure you’re following the law.


For this example, we’ll be lending cryptocurrency, using


  1. Buy some Ethereum on the exchange of your choice.
  2. Install the MetaMask wallet into your browser.  Follow the instructions to create a wallet.
  3. Transfer your Ethereum to the MetaMask wallet – you’ll see it show up in your wallet:

  4. Visit https://app.aave.com
  5. Connect your MetaMask wallet to Aave (you can connect other wallets to Aave instead, including online wallets).  You’ll see your funds available for lending

  6. Decide how much you want to lend (“supply”) to the network.  You’ll see the APY (annual percentage yield) – the annual interest you’ll earn, including compound interest.
    Note “gas fees” (the petrol column icon near the bottom).  These are fees for using the Ethereum network, paid to crypto miners.  They vary depending on how busy the network is.
  7. Confirm the transaction in your MetaMask wallet popup

  8. (Optional) add a token to your wallet to track your balance – this allows you to keep an eye on how much you’re earning in interest, and how much you have lent to the network.

That’s it!  To retrieve your lent-out funds, just visit Aave again and “withdraw” (you’ll be charged gas fees again).

We’ll cover borrowing in a future post.  In short, though, you can borrow using your existing crypto assets as collateral, which will provide more security and thus lower interest rates.  

When borrowing using Aave, everything you see on the protocol’s website and in these screenshots is well and understandably documented at https://docs.aave.com.   Please take some time to understand concepts like Health Factor, Collateral, and other aspects of credit risk.

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