The Litecoin Foundation is collaborating with Cred to introduce the Litecoin Collateral Interest (LTC), according to a press release from February 10. Credit customers can deposit their coins with the supplier to earn up to 10% per year.
Through a strategic partnership, LTC holders will be able to lend the cryptocurrency at favorable prices similar to various decentralized financing solutions (DeFi) on Ethereum. To take advantage of the interest rate, a six-month obligation with monthly interest payments in the form of cash or crypto is required.
Other Cred partners such as Bitcoin.com, Uphold and BitBuy will facilitate the lending process. Alan Austin, Director of the Litecoin Foundation, explained that the partnership adds an important utility to Litecoin:
Strong use cases should be one of the most important considerations when considering a cryptocurrency. In addition to Litecoin’s reliability, payment usage and excellent liquidity, the ability to earn interest at attractive prices with the Cred platform strengthens this utility. ”
Part of the funds from the joint initiative will be used to support the development of Litecoin. This came amid recent funding requests when Litecoin founder Charlie Lee made a voluntary donation of 1% to support the fund’s operations.
What is a loan?
Cred is a global cryptocurrency-based lending and lending platform. It aims to create a global network to access credit and maintain a global credit history using the LBA interest rate code to provide an interest premium. It was founded by Dan Shute, the former CEO of PayPal, whom Cointelegraph recently interviewed.