Lend stablecoins → earn 7.8% APY. Or borrow against your BTC → get cash without selling (and without 30% tax). Here's how crypto lending works and how to avoid the #1 risk: liquidation.
Deposit USDC on Aave → borrowers pay you interest → earn 7.8% APY. No crypto price risk (USDC stays $1). Withdrawable anytime. Far better than any bank savings account. The simplest, safest DeFi yield.
Need ₹4 lakh but don't want to sell BTC (and pay 30% tax)? Deposit ₹10 lakh BTC as collateral → borrow ₹4 lakh USDC. You get cash, keep your BTC, keep the upside. No taxable event. Powerful for liquidity.
If your collateral drops too far, the protocol AUTO-SELLS it to repay your loan — plus a 5–15% penalty. To stay safe: never borrow more than 30–40% of your collateral value. Keep your buffer huge. Never borrow the max.
Use Aave (20+ audits, never hacked) or Kamino (Solana). Start with simple lending — supply USDC, earn 7.8%, zero liquidation risk. If borrowing, max 35% LTV. India tax: lending interest taxed at slab rate; liquidation = taxable sale.
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