HomeEarning money through passive income by utilizing FTX’s lending program

Earning money through passive income by utilizing FTX’s lending program

Adolph Obasogie

There are ways through which users of the FTX cryptocurrency derivatives exchange can earn money passively. 

This essentially means that they would let the cryptocurrency they already have in their wallet balance, do the work for them, which in turn means that they would make money passively, on an hourly basis, even in their sleep.

We will be going over everything you should know about the FTX Lending Program, from how it works, to how you can utilize it and create an additional, passive money stream for yourself.

How Lending Works on FTX

Users of the FTX exchange can lend out assets, and when doing so, they can specify the quantity they would like to lend and the minimum interest rate they would require. 

Traders will typically borrow funds with the goal of increasing their buying power, which in-turn allows them to buy a larger quantity of cryptocurrencies.

As long as they have sufficient margin, they can borrow simply by spending beyond their account’s balance. 

When a user borrows funds from a lender’s posted crypto, an action that happens when the interest rate is below 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 FTX guarantees interest payments for however long the funds are borrowed, even in cases when the borrower ends up getting liquidated.

There are a few things that you need to keep in mind prior to lending out your funds, including:

  • The funds you are lending will be locked.

  • You cannot withdraw, sell, or use them as collateral staked. 

  • These funds can be used as a maintenance margin to prevent liquidations.

  • However, if you do want to withdraw your funds, you first need to click on "Stop Lending," and your funds will be made available at the next funding time, which occurs once every hour.

  • If you as a user were offering to lend your coins, but they were not actually borrowed due to the fact that there was not sufficient demand at your minimum interest rate, then, in that case, you are free to use the coins and stop trying to lend at any point in time.

Lending Your Cryptocurrencies on the FTX Exchange: A Step-by-Step Guide

Any user of the FTX cryptocurrency derivatives exchange is given the option to earn interest on their cryptocurrencies through lending them to other users who are in need of them.

Step 1: Create an Account – If you do not have an account, you can sign up with FTX.com here. If you already have an account, you can move on to the following steps.

Create an account on FTX

Step 2: Visit the Margin Lending Section – In order for you to lend a cryptocurrency asset, you will first need to go to your wallet, after which you need to click on "Margin Lending."

Margin lending on FTX

Step 3: Select the currency – Here, you can use  USD and cryptocurrencies, such as UDT, BTC, ETH, 1INCH, AAVE, and so on. 

For this example, we will be using USD as it has the highest 24-hour average borrowed, which means that it is the most popular currency being borrowed.

Currencies for margin lending on FTX

Step 4: Specify the Quantity – Once you click on the currency you are interested in lending out, you will be greeted by an additional menu. 

This is known as the “Create Funding Offer” part of the page, where you specify what kind of offer you want to provide in terms of lending out your funds for margin trading. Here, you need to fill out the following information:

  • Coin.

  • Size.

  • Minimum Hourly Rate.

  • Minimum Yearly Rate.

The rate you supply specifies a minimum, and if the prevailing lending rate is higher, you will still be paid that higher rate on any funds lent. 

However, keep in mind that you can cancel your offer at any point in time, but if your funds have been borrowed, they will remain locked for up to an hour after you have canceled your offer. 

This is due to the fact that all borrow rates only last for 1 hour, and each hour they are redetermined. 

Funding offer on FTX

Step 5: Earn Money – If your asset ends up getting borrowed, you will be able to receive a marginal interest rate on an hourly basis. 

Once your funds have been borrowed, you can navigate to the Lending 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 on the top of the page, you can view the Borrow/Lending page.

Earn money through passive income on FTX

On this page, you will be able to see the total national value lent in the last 24 hours, alongside the currencies being lent out and borrowed the most, the previous funding rate, as well as the estimated next funding rate.

Total margin lending on FTX

Closing Thoughts 

Hopefully through this guide, you are now one step ahead of the curve when it comes to using the FTX exchange as a means of loaning out cryptocurrencies and earning passive income as a result of doing so.

This program provides an excellent way for anyone to start earning money passively by using funds they already have in their cryptocurrency wallets.

Through FTX Lending, you will be earning money in your sleep, and this is a method of earning passive income that’s popular among some of the most advanced cryptocurrency traders and investors. 

We use cookies to personalise content & ads, provide social media features and offer you a better experience. By continuing to browse the site or clicking "OK, Thanks" you are consenting to the use of cookies on this website.