A typical crypto loan bears clear similarities to a personal loan, serving a variety of purposes such as home renovation or launching a new business. Online and automated processes facilitate the acquisition of crypto loans, which come in two varieties: centralized and decentralized. Crypto loans have gained significant popularity among individuals due to their preference and high profitability. Both centralized and decentralized crypto loans are beneficial to the financial lending industry.

The decentralized crypto loan is immensely popular since it is distributed and noncustodial in nature. Crypto assets and currencies like Bitcoin or Ethereum function as securities if the borrower can’t repay them.