There are ways by which users of the FTX cryptocurrency derivatives exchange can earn money passively.
This basically means that they would let the cryptocurrency they already have in their wallet do the work for them, which means that they would earn money passively, on an hourly basis, even while they sleep.
We will go over everything you need to know about the FTX loan program, from how it works to how you can use it and create an additional passive money stream for yourself.
How does the loan on FTX work
Users of the FTX exchange can lend assets and, in doing so, they can specify the amount they want to lend and the minimum interest rate they would need.
Traders usually borrow funds with the aim of increasing their purchasing power, which allows them to buy a larger amount of cryptocurrencies.
As long as they have sufficient margin, they can borrow simply by spending beyond their account balance.
When a user borrows funds from a lender’s published crypto, an action that occurs when the interest rate is lower than the marginal rate, the lender will receive the marginal interest rate on an hourly basis.
Note that lenders do not bear any counterparty risk and that FTX guarantees the payment of interest for the entire duration of borrowing funds, even in cases where the borrower ends up being liquidated.
There are a few things you should keep in mind before lending your funds, including :
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The funds you lend will be blocked.
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You cannot withdraw them, sell them or use them as staked collateral.
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These funds can be used as a maintenance margin to avoid liquidations.
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However, if you want to withdraw your funds, you must first click on “Stop Lending” and your funds will be made available at the next financing time, which occurs once an hour.
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If, as a user, you offered to lend your coins, but they were not actually borrowed due to the fact that there was not enough demand at your minimum interest rate, then, in this case, you are free to use the coins and stop trying to lend at any time.
Lending your cryptocurrencies on the FTX exchange: a step-by-step guide
Any user of the FTX cryptocurrency derivatives exchange has the opportunity to earn interest on their cryptocurrencies by lending them to other users who need them.
Step 1: Create an Account – If you don’t have an account, you can log in register on FTX.com here. If you already have an account, you can proceed to the next steps.
Step 2: Visit the Margin Lending section – In order to be able to lend a cryptocurrency asset, you will first need to access your wallet, after which you will need to click on “Margin Lending”.
Step 3: Select the currency – Here you can use USD and cryptocurrencies, such as UDT, BTC, ETH, 1INCH, AAVE, etc.
For this example, we will use USD because it has the highest 24-hour average borrowed, which means that it is the most popular currency borrowed.
Step 4: Specify the quantity – Once you have clicked on the currency you want to lend, you will be greeted by an additional menu.
This is called the “Create a financing offer” part of the page, where you specify the type of offer you want to offer in terms of lending your funds for margin trading. Here you need to fill in the following information :
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Coin.
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Carved.
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Minimum hourly rate.
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Minimum annual rate.
The rate you provide specifies a minimum, and if the prevailing loan rate is higher, you will still be paid this higher rate on all loaned funds.
However, keep in mind that you can cancel your offer at any time, but if your funds have been borrowed, they will remain blocked for up to an hour after canceling your offer.
This is due to the fact that all loan rates last only one hour, and they are redetermined every hour.
Step 5: Earn money – If your asset ends up being borrowed, you will be able to receive a marginal interest rate on an hourly basis.
Once your funds have been borrowed, you can go to the Loan History section of the page, where you will be able to see your hourly earnings.
Note : By clicking on the icon next to the FTX logo at the top of the page, you can view the Borrow/Lend page.
On this page, you will be able to see the total national value lent in the last 24 hours, as well as the most loaned and borrowed currencies, the previous financing rate, as well as the next estimated financing rate.
Final thoughts
I hope that thanks to this guide, you are now one step ahead of the curve when it comes to using the FTX exchange as a way to lend cryptocurrencies and earn passive income as a result.
This program offers a great way for anyone to start making money passively using the funds they already have in their cryptocurrency wallets.
Thanks to FTX Lending, you will earn money while you sleep, and it is a method of earning passive income that is popular among some of the most advanced cryptocurrency traders and investors.
