Top 10 Alternatives to Compound

Cryptocurrency investing has grown to become one of the more lucrative ways to generate passive income sources over the last couple of years. Many people, particularly those who are not closely involved with the cryptocurrency industry still perceive the space to have a relatively small pool of investing opportunities and think that buying and holding crypto-assets such as Bitcoin or Ethereum is the only way to make a profit in this nascent market. This couldn’t be further from the truth.

Obviously, buying and holding or day trading are certainly viable options and great strategies to employ, especially if you are able to dedicate the necessary resources and have the required time to closely observe the market movement in order to identify the opportune moments to make a sell order or to buy additional assets. However, for those who lack the time or are not prepared to fully embrace the volatility that comes with investing in the crypto marketplace, there are various other options to gain exposure to crypto or to make use of crypto products and services that allow you to generate passive income by using your otherwise idle funds.

Various decentralized and centralized crypto services have arisen that allow their users to take advantage of numerous methods of generating passive income. Borrowing funds by using crypto as collateral, staking digital tokens and in turn generating interest on staked assets, earning rewards by providing liquidity to liquidity pools are just some of the ways that avid investors can grow their crypto holdings and make use of the compounding effect to accelerate asset growth.

Platforms similar to Compound allow you to maximize your crypto earning potential

Compound is among the leading decentralized finance (DeFi) cryptocurrency lending and borrowing protocols. As the name implies, Compound makes use of smart contract functionality to facilitate cryptocurrency lending by compounding interest rates on supplied crypto assets with each subsequent Ethereum block.

The protocol makes use of cTokens, which users receive once they supply a supported cryptocurrency to the protocol. For instance, if you decide to use Ethereum you will receive the corresponding amount of cETH in return. When you are ready to collect your profits the cTokens are converted back into the originally supplied cryptocurrency.

Compound supports Ether, Uniswap, 0x and other popular ERC-20 tokens as well as USDC and several other stablecoins. Each crypto asset has different supply annual percentage yields (APY) and borrow APY rates, which are calculated using an algorithmic, autonomous interest rate mechanism. Compound is a good choice for those who are looking for a decentralized platform, particularly if you are holding native COMP tokens, which give owners the ability to propose and vote on changes to the protocol, and oversee the protocol’s reserves and treasury.

Create Compound Account

The 10 Best Compound alternatives for generating passive income with your crypto

While Compound is among one of the most popular DeFi lending protocols around, there are many products that it lacks when compared to certain competitors in the space. For instance, you can’t borrow fiat and use your crypto as collateral. Interest rates are a bit lower than one some of its centralized counterparts. Compound also has no native support for the most popular cryptocurrency Bitcoin, although it does offer a workaround by accepting WBTC.

If you are searching for additional options for earning passive income with your crypto holdings you’ve come to the right place. We’ve put together a list of the 10 best crypto platforms that support crypto earring options that are good Compound alternatives.

1. Binance

Binance is arguably the biggest cryptocurrency trading platform in the world. With 300+ supported cryptocurrencies and more than 1200 trading pairs, it leads most competitors by the sheer number of accepted tokens as well as by trading volume. In addition to its massively popular trading platform, Binance offers numerous methods for earning passive income with your crypto funds, which makes it a great alternative to Compound.

Via its Binance Earn program, users can take advantage of various staking options, from high yield low-risk ETH 2.0 staking to riskier DeFi staking and liquid swap options that have the potential for the highest ROI rates. Keep in mind that APY rates differ greatly between various methods, mostly on the basis of how risky is the staking service you pick.

Binance also provides the ability to borrow crypto assets for trading or straking purposes. The asset you wish to borrow and loan duration are the two parameters that impact the required crypto collateral amount. When borrowing assets, pay close attention to the so-called loan-to-value (LTV) ratio, which is represented as the percentage of the value of your loan to the value of your collateral. The exchange also has its own BNB token, which is primarily used to pay transactions and trading fees on the platform and to participate in exclusive Binance offerings, such as investing in IEOs on Binance Launchpad. BNB is the native currency of the Binance Smart Chain.

Binance summary:

  • Arguably the biggest cryptocurrency trading platform is also home to a large catalog of passive income earning options
  • The selection of products and services includes a plethora of different options, from almost guaranteed income with low yields, to high yield high-risk options
  • Crypto-backed loans are available, however, there is no option for fiat loans
  • BNB token provides additional benefits when using the platform, such as the ability to participate in the exchange’s IEOs

Create Binance Account

2. BlockFi

BlockFi claims that it is the easiest place to buy, sell and earn cryptocurrency, and for a good reason. With a BlockFi Interest Account (BIA) users can earn up to 7.5% APY on their deposited crypto funds. The interest accrues daily with payments coming each on a monthly basis. Additionally, users can choose with cryptocurrency to receive their interest payments in, be it Bitcoin, Ethereum or one of the supported stablecoins.

BlockFi accepts BTC, ETH, LTC and PAXG as collateral options when borrowing fiat on the platform. APR rates start as low as 4.5% with the minimum loan amount being $10,000 USD. For reference, if you would borrow the minimum available amount for a period of 12-months on BlockFi at current rates, the required collateral amount would be 0.42 BTC.

In addition to earning and borrowing products and services, the platform also supports cryptocurrency trading. With BlockFi Trading users can easily convert their funds between supported cryptocurrencies and set up recurring trades to make executing of dollar-cost averaging (DCA) strategy as easy as possible. New funds deposited into your interest account will automatically start earning interest the day after the initial trade.

BlockFi summary:

  • Easy to use interface and great transparency in regards to LTV, APY rates and other important aspects
  • Earning passive income with crypto is made easy by using the BlockFi Interest Account service
  • Users can borrow fiat by supplying one of the supported digital currencies as collateral
  • Relatively small selection of supported digital currencies

Create BlockFi Account

3. KuCoin Crypto Lending

Kucoin is one of the most renowned cryptocurrency exchanges in the community. On top of offering one of the better exchange platforms, KuCoin also houses a very competitive Kucoin Crytpo Lending service. KuCoin allows users to loan their crypto holdings and to supply liquidity to users who participate in margin trading. Margin traders borrow funds, usually from a broker in order to amplify their trading positions, which increases volatility and gives them the ability to reach a much higher ROI on investments than would otherwise be possible.

Given the exchange’s popularity among altcoin traders, it is no surprise that KuCoin lending supports a large number of different coins randing from BTC and ETH, to relatively smaller market cap coins such as OMG and 0x. When lending crypto assets, users are able to choose different parameters, including daily interest rate and loan duration (from 7 up to 28 days). For reference, the annualized rate for USDT is approximately 25%.

Likewise, when borrowing funds for the purposes of margin trading similar duration and interest rates terms apply. Additionally, KuCoin token is particularly useful for those who are looking for ways to generate passive income with crypto. Holding just six KCS tokens is enough to participate in a daily bonus that is paid out daily and comes from 50% of KuCoin’s daily trading fee revenue. According to KuCoin annual report, the APR of KCS bonus exceeds 30%.

KuCoin Crypto Lending summary:

  • One of the more respected names in the industry with a very popular exchange offering and several passive income earning options
  • Supports a wide variety of cryptocurrencies that can be used to loan or borrow funds
  • Allows users to borrow their crypto holdings to margin traders in return for interest
  • KCS token holders participate in daily reward distribution program

Create KuCoin Account

4. Celsius

Celsius is a centralized cryptocurrency lending platform that has managed to establish itself as one of the more popular services in the market since being founded in 2017. The UK-based company provides a competitive offering of products and services that gives users plenty of opportunities to use their crypto to create additional income streams or to use their crypto holdings collateral to borrow fiat.

In order to make the fullest use of Celsius and reach the highest level of payouts, native CEL tokens are designed to unlock the platform’s full potential. For reference, APY for TUSD is 8.88% by default, however the rate increases by 25% to 11.21% if you choose to receive your interest in CEL. At the time of this writing, the CEL token benefits are not available to US residents.

Celsius allows its users to borrow funds in the form of stablecoins, such as GUSD and TUSD, as well as to get USD loans by putting up crypto assets as collateral. The borrowing rates start at just 1% APR for CEL holders. Additionally, the company also offers a peer-to-peer (P2P) payment service CelPay that allows users to make and receive crypto payments right from the Celsius app. Celsius app offering is available on Web, Android and iOS.

Celsius summary:

  • Great centralized crypto earring and borrowing platform with support for a wide range of digital currencies
  • Celsius app is natively available on Web, Android and iOS, with an integrated P2P option
  • US-based users can’t take advantage of benefits provided by CEL tokens
  • KYC is required

Create Celsius Account

5. Kraken Staking

Kraken is another platform on our list that is mostly known for its exchange offering. However, the US-based company has built an impressive collection of products and services that allow users to make a profit without having to engage in any sort of cryptocurrency trading, which makes it a great alternative to Compound.

Using Kraken Staking options is a great way to maximize the utility of assets that would otherwise be sitting idle in an exchange account or in a wallet. On the Kraken staking platform, users can choose to stake their holdings in Polkadot, Kusama, and other popular proof-of-stake (PoS) blockchains. Kraken also supports fiat staking, albeit at much lower yearly rewards.

The staking rewards are paid out twice a week and range from 12% at the higher end to 0.25% on the other end of the spectrum, depending on the asset. Transactions on PoS coins are verified via so-called validator nodes, which gives PoS validators a source of income without needing powerful mining hardware.

Kraken Staking summary:

  • One of the most respected brands in crypto with a competitive staking service
  • Staking is made easy, but potential earring rates vary greatly between different assts
  • Support USD and EUR fiat staking options
  • Staking rewards are paid out twice a week

Create Kraken Account

6. Nexo

Nexo is another centralized cryptocurrency lending platform that has enjoyed much success over the last couple of years. The current market capitalization of NEXO token is above $1 billion, which is a testament to the platform’s popularity within the community. Nexo offers the ability to earn interest on crypto holdings, to take out a loan as well as an exchange service, with support for over 100 crypto and fiat pairs.

The platform promises up to 12% APR on your deposited crypto assets, with interests paid out on a daily basis. To make the most out of using Nexo, holding native Nexo tokens is advised. When deciding to receive rewards in the platform’s own digital token, APY rates jump up considerably, by +2% on each crypto asset (for reference, if default APY for BTC is 6%, choosing to earn in NEXO boosts earning to 8%).

For those who are looking to take out a fiat loan using your digital assets as collateral, Nexo might very well be your best bet. The platform supports more than 40 fiat currencies, including USD, EUR, GBP and HKD. Users can pick between 20 different cryptocurrencies to use as collateral options. Additionally, Nexo app that is available for both iOS and Android, has recently received support for Nexo Card, which allows you to earn 2% cashback on all purchases.

Nexo summary:

  • Wide range of supported fiat currencies and crypto collateral options
  • NEXO token holders get considerable benefits, such as +2% on top of the default APY rates
  • Native support for iOS and Android mobile platforms
  • Recently released Nexo card integrates with Nexo Wallet and grants 2% cashback for all purchases made with the card

Create Nexo Account

7. CoinLoan

CoinLoan helps those interested in earning passive income with crypto to borrow, swap and grow their digital assets. In addition to providing a cryptocurrency exchange offering, CoinLoan also offers competitive crypto earning and borrowing services. The platform’s native CLT token gives holders the ability to earn higher interest rates on interest accounts and to benefit from lower fees when borrowing assets.

CoinLoan Interest account is made for users who are interested in a service similar to a traditional bank saving account but want their assets to accumulate more quickly thanks to a higher annual percentage yield. The highest yearly returns of 12.3% can only be achieved when depositing stablecoins, but using popular digital coins nets a very respectable 7.2% APY.

When borrowing with CoinLoan, users can borrow fiat without selling their crypto assets. The company provides a number of options and great flexibility when setting up a borrowing plan. Users can pick different LTV ratios (ranging from 20% to 70%) and the length of the loan period (from 1 month up to 36 months). Interest rates and collateral amount change according to the selected parameters.

CoinLoan summary:

  • Native CLT token gives additional benefits to token holders, such as higher interest rates on savings and lower fees when borrowing
  • Users have great flexibility when setting up a borrowing plan
  • Support for popular fiat deposit options, including SEPA, SWIFT, Visa and Mastercard
  • KYC is required

Create CoinLoan Account

8. YouHodler

Another centralized platform for borrowing and lending crypto assets on our list is YouHodler. The company accepts 33 different crypto collateral options and provides access to fiat loans in EUR, USD, CHF and GBP currencies. Withdrawals can be credited to credit card and personal bank account. YouHodler boasts especially high LTV ratios of up to 90%.

YouHodler is a good option for those who are searching for a platform that has low minimum loan amounts, unlimited loan terms and support for major fiat currencies. In addition to competitive loan terms, the company also offers crypto saving account rewards for 39 digital currencies. As is usually the case, the highest interest rates can be achieved when depositing stablecoins, with up to 12.3% APY for USDT. Bitcoin rates are a bit lower than most of its competitors, however, YouHodler makes up for this discrepancy by providing higher interest rates for other assets.

If you are itching to trade crypto with profits accrued from your crypto savings, YouHodler offers a crypto trading service and so-called Multi HODL margin trading with up to 30x leverage. Additionally, TURBOCHARGE feature can clone collateral up to 6.5x which does increase volatility but give the ability to capitalize on sudden market price growth of a certain digital asset.

YouHodler summary:

  • Supports 33 crypto collateral options and 39 different coins to earn interest on
  • Loans can be received in USD, EUR, GBP, CHF and BTC
  • Very high maximum LTV ratio with up to 90%
  • Relatively low Bitcoin APY rates for savings when compared to competitors

Create YouHodler Account

9. Uniswap

Uniswap is an Ethereum based decentralized finance protocol that was first to introduce the Automatic Market Maker (AMM) concept. The automated mechanism allows traders to swap between different cryptocurrencies in a certain liquidity pool in exchange for a fee. While the process might sound complicated, the whole system is done in the background and lets users use Uniswap as a normal cryptocurrency exchange. Uniswap is a great alternative to Compound for those who are looking for a decentralized platform to earn passive income on. 

When users supply liquidity to a liquidity pool they receive the corresponding amount of liquidity tokens in return. These tokens can be used as any other digital currency on the Ethreum blockchain. Once you decide to redeem your liquidity tokens for the particular asset you’ve initially supplied to the liquidity pool, you receive back original tokens in addition to the transaction fee rewards. On occasion, Uniswap runs liquidity mining programs that allow users to earn UNI tokens for their service of providing liquidity.

With a market cap of over $18 billion at the time of this writing, Uniswap token’s standing among the other major cryptocurrencies speaks volumes about the decentralized exchange’s popularity. Uniswap supports a huge catalog of digital currencies, as it accepts pretty much every ERC-20 token that exists.

Uniswap summary:

  • One of the more popular decentralized exchanges in the market
  • Providing liquidity to liquidity pools can be a very lucrative way of earning passive income
  • UNI liquidity mining programs can be especially profitable, particularly due to the success of UNI token
  • No KYC required

Create Uniswap Account

10. PancakeSwap

PancakeSwap is essentially a fork of Uniswap that runs on the Binance Smart Chain instead of Ethereum. As such, the features are the same between the two exchanges. In short, PancakeSwap provides the ability to earn a profit from transaction fees when supplying liquidity to liquidity pools or to swap between different digital currencies.  Both Uniswap and PancakeSwap are great alternatives to Compound for users who prefer to use decentralized cryptocurrency platforms.

In an effort to differentiate itself from Uniswap, PancakeSwap has introduced certain features that make it unique. For instance, CAKE tokens can be staked in the so-called Syrup Pools, which allows users to earn rewards in the form of additional CAKE tokens or other digital currencies. 

If you are interested in other forms of making crypto holdings work for you besides earning fees on providing liquidity or participating in Syrup Pools, you can also check out Initial Farm Offerings (IFOs) and yield farming options that PancakeSwap provides.

PancakeSwap summary:

  • A fork of Uniswap and a very popular DEX in its own right
  • Earning rewards by providing liquidity and staking CAKE are great options for earning passive income
  • Syrup Pools and Yield Farming options offer considerable earning potential
  • No KYC required

Create PancakeSwap Account

Why having alternatives to Compound is important?

Despite the fact that Compound is a great service, especially if you are looking for a decentralized platform that offers cryptocurrency lending and borrowing, there are several competing options that offer additional features for earning cryptocurrency without trading, higher interest rates or a bigger selection of supported cryptocurrencies. Learning about different products and services that are available in the market is the best approach to take and gives you the greatest chance of finding a platform that most closely matches your particular needs.

Hopefully, this article helped you choose the best platform for you to start earning cryptocurrency without trading.

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