Bitfinex borrow adds XRP, Litecoin, EOS, Polkadot as collateral
Bitfinex has added four new assets on Bitfinex Borrow, its peer-to-peer (P2P) digital token lending/borrowing platform. The latest digital assets added, including XRP, Litecoin LTC, EOS and Polkadot DOT, can act as collateral to obtain crypto and fiat loans.
? On Bitfinex Borrow you can now get a loan using the following collateral:
— Bitfinex (@bitfinex) December 14, 2020
Borrowers will be able to obtain loans of up to 80% of the value of their XRP, LTC or EOS holdings or up to 70% of the value of their DOT holdings in either Tether tokens (USDt) or US Dollars (USD) according to a release shared with AMBCrypto.
CTO at Bitfinex, Paolo Ardoino claimed that adding support for XRP, Litecoin, EOS and Polkadot on Bitfinex Borrow would provide their users with “more freedom and flexibility” when taking out loans from the peer-to-peer lending markets.
However, the annual percentage rates for the four cryptocurrencies vary. At the time of the announcement, XRP-collateralized loans are the most expensive with 13.07% in Annual Percentage Rate (APR). Litecoin-collateralized loans have an APR of 7.9% while DOT and EOS are much lower at 0.0192% and 0.0004% respectively. Meanwhile, Bitcoin has 19.69% APR for USD-settled loans and 12.42% for USDT.
Furthermore, Bitfinex said that its borrowers will first need to deposit enough collateral in XRP, LTC, EOS, or DOT into their Margin wallet, before they begin to use these four assets as collateral to obtain a loan. In addition, users can use the borrowed funds either on the Bitfinex platform or for any purchase outside of the Bitfinex platform.
Borrowers can also choose between Flash Return Rate (FRR) as well as fixed lending programs. Bitfinex further said that users can choose the length of time over which a loan is repaid, with fixed-rate loans offering a maximum 120-day term. After this period, the fixed-rate loan will be converted into a variable rate.