Crypto lending is a process where individuals or institutions lend their cryptocurrencies to borrowers in exchange for interest payments. This method allows cryptocurrency holders to earn passive income without selling their assets. The lender locks their crypto in a smart contract or a lending platform, and the borrower uses it as collateral to receive a loan in fiat currency or another cryptocurrency.
For example, if Alice wants to lend her Bitcoin, she might use a crypto lending platform to lock up her Bitcoin. Bob, who needs funds, can then borrow those Bitcoins, using them as collateral, and agree to pay back the loan plus interest in fiat currency or another cryptocurrency after a certain period.
In the context of cloud computing, platforms that facilitate crypto lending often rely on cloud services for scalability, security, and reliability. For instance, cloud providers like Tencent Cloud offer robust infrastructure that can support the high demands of crypto lending platforms, ensuring that transactions are processed quickly and securely.